Sunday, August 19, 2007

Response to Senator Craig

Last week Idaho Senator Larry Craig posted an editorial on his web site regarding road infrastructure funding. The article is titled - Don't Take a Hike. In the article Senator Craig admits that we must do something about our aging transportation infrastructure, opposes a gas tax increase, and suggests that we at least partially fund infrastructure through efficiency improvements. Here is my response to his editorial:
Senator Craig,

I read your August 16th editorial titled "Don't Take a Hike". I wanted to share my opinions on the subject. First, I agree with you that something needs to be done. We have neglected investment in many critical areas in this country and I feel that our aging bridges and roads are but one example. Additionally, I agree with you that we should continuously be looking for improvements in efficiency as one way to get more return on our investment. I do, however, have a number of issues with the remainder of your editorial.
The editorial states that something must be done, but a gas tax increase is not the answer. If not, then what is? Efficiency improvements will not sufficiently fund the improvements. I would be interested in your ideas on how to fund the gap.
Here is why I believe that a gas tax increase is the answer to infrastructure improvements:
First, I believe it is time for us to increase investment in infrastructure. The more neglect the infrastructure receives, the larger the looming repair bills will be. We are essentially borrowing from the future as we will have to pay eventually (as we now are in Minneapolis).
Next, I see four possible options to pay for infrastructure - 1) efficiency; 2) debt; 3) gas tax; or 4) some other tax (new or existing). We have both agreed that efficiency is not sufficient. Increasing the national debt would further burden our children and grandchildren while decreasing the stability of our economy as we continue to borrow overseas. It is fundamentally irresponsible to do this to our kids, just so we can avoid the short term economic impacts. A focus on other taxes is providing a subsidy for transportation at the expense of other aspects of our economy. The most fair, direct, and understandable approach is to require transportation to pay for transportation infrastructure. The easiest and most direct way to do this is through a gasoline tax.
The problem with most of this debate is that people only ever present the negative aspects of a gasoline tax. There are many positive aspects as well. An increase in the gasoline tax would encourage people to drive less. Driving less decreases our contribution to global warming, decreases our dependence on foreign oil, and thus likely decreases the growth of global terrorism. It would provide greater advantage to local businesses and producers. This in turn creates jobs, slowing or stopping the migration of quality job overseas.
These benefits more than outweigh the disadvantages and provides a real solution to the problem. I encourage you to reconsider your position. Thank you.

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saraeanderson said...

I actually think that in Idaho, a gas tax makes very little sense, if we're trying to get the most benefit from our taxes. Most of the area in this state has zero access to public transportation. We have a huge rural population that wouldn't be able to get to school or work if they couldn't drive. And the people living in rural areas are a lot more likely to be low-income. Make it an income-dependent tax, and voila. Everyone pays according to what they can afford.

wolf21m said...

Sara, Thanks for the comment. I agree with you in general with more progressive tax approaches based on income. In this case, I think the benefits of a gas tax far outweigh the disadvantages. A gas tax would decrease demand. This is important for all of the reasons that I cited. Income based tax will not do this. The gas tax also gives advantage to local producers instead of subsidizing the transportation of imported goods. This cannot be underestimated either. As with all changes, there will be winners and losers.

Anonymous said...

Sara makes some excellent points. There is a point beyond which a person living in a rural area cannot decrease his/her 'demand' for fuel. A gasoline tax - at that point - becomes an unfair burden on those people so situated.

This country faced similar circumstances when building the communication infrastructure many years ago. Those people living in a rural area could not afford the high costs associated with running phone lines to their property. At that time, we subsidised the communication giants by applying a 'universal' tax that wasn't based on 'demand' (or quantity of use) but rather on whether or not an individual used ANY part of the infrastructure, or not.
Such a tax makes imminently more sense in a predominantly rural state like Idaho.