From: snyder@henry.ece.cmu.edu (John Snyder)
Subject: Re: Cost of public vs. private transportation
Organization: Physics Department, Carnegie Mellon University
Date: Sat, 25 Jul 1992 07:39:08 GMT

In article <1992Jul24.082656.6584@ke4zv.uucp> gary@ke4zv.UUCP (Gary Coffman) writes:
>In article <1992Jul23.000116.4102@s1.gov> lip@s1.gov (Loren I. Petrich) writes:
>>In article <JMC.92Jul22091522@SAIL.Stanford.EDU> jmc@cs.Stanford.EDU writes:
>>>The Interstate system is financed by the gasoline tax, more than 100
>>>percent, I believe.  In fact the lawyers want to tap the gasoline
>>>tax to finance their public transit boondoggles.
>>
>>	If one does some VERY clever accounting, then just MAYBE. But
>>total costs are:
>>
>>	1979 US government agencies on highways:
>>
>>	$71.2 billion total
>>
>>which breaks down to
>>
>>	$44.3 billion in "user fees"
>>
>>and
>>
>>	$26.9 billion in subsidies.
>>
>>The "user fees" include vehicle registration fees, fuel taxes, and
>>tolls.
>>
>>The subsidies are all sums whose sources are something other than user
>>fees -- income taxes, sales taxes, property taxes, bond-issue
>>proceeds, etc.
>>
>>	Thus, highways are 38% subsidized.
>
>Something's not right here. According to Van Nostrand's Scientific
>Encyclopedia, per capita gasoline consumption was 400 gallons per
>year in 1970. I don't think that has declined much. So 400*$.15*250e6=
>$15 billion a year in Federal fuel tax on autos. Trucks use about 100 
>gallons of diesel a day and there is an additional $.10 per gallon Federal 
>tax on diesel above the ordinary gasoline tax for a total Federal tax of
>$.25 a gallon. There are about 5 million trucks in the US. So 100*250*$.25*
>5e6=$31.25 billion dollars. That gives a grand total of *Federal* fuel tax
>collections of $46.25 billion a year. Now States also have fuel taxes. Georgia
>has one of the lowest in the nation at $.10 a gallon and no surcharge for
>diesel. Using that low figure nationally, we get an additional $22.5 billion
>dollars to the States. That gives us a total fuel tax of $68.75 billion 
>dollars. In addition, in Georgia, a registration fee is charged on vehicles 
>based on their value, an ad valorum tax. In my county, that's 11 mills, 
>costing me an additional $165 a year. Multiply that by the number of vehicles
>nationally, about 200 million, and you have another $33 billion dollars.
>Trucks are valued much higher of course, the typical tractor runs $100,000
>these days. So that yields another $5.5 billion dollars. We're up to
>$107.2 billion dollars now. Now States also collect a nasty item called
>sales tax. In this county it's 5%. Add that to the price of gasoline and
>diesel for a national total of another $11.25 billion collected on fuel
>for a grandest total of $118.45 billion dollars. But wait, there's more.
>That sales tax is collected on vehicle sales too. At a national average
>price of $14,000 for a new car that's $700 each or $140 billion dollars.
>Now the survey shows that the average owner keeps his car for 8 years so
>we'll divide the $140 billion by 8 to get a yearly collection of $17.5
>billion dollars. Now trucks cost $100,000 or a sales tax of $5,000 each
>and their operating lifetime is on average 12 years so we have about
>$2.1 billion a year from the truckers. That gives a new total of $138.05
>billion a year in government revenue from road vehicles. That more than
>covers a $71.2 billion expenditure for highways which is why they raid 
>the funds for mass transit subsidies. We haven't even mentioned tolls
>or special wheel taxes imposed on interstate trucks and local commuters.
>  
>
>Gary


There are several problems with this last calculation:

1)  Most states do NOT charge a registration fee based on vehicle value.
Neither are most registration fees as high as the one that you quote.
I pay something like $24.00 per year in Pennsylvania, and that is a flat
fee which does not depend on the year, make, or value of the vehicle.  
Furthermore, I highly doubt that Pennsylvania is the cheapest in the
country.  To take your registration fee and multiply by all the vehicles 
in the country grossly overstates the amount of money involved.

2)  In our state at least, sales tax is a state general revenue tax, nothing
more.  To suppose that state sales tax on vehicles should be counted as part 
of the highway budget is as silly as saying that sales tax on food is part 
of aid to agriculture, that sales tax on sports equipment is part of the 
parks and recreation budget, or that sales tax on movie, concert and theatre 
tickets should all go to aid to the arts.  Sales taxes are just a way to 
raise money for the general state budget, they are NOT a user fee.

John
snyder@henry.ece.cmu.edu

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