Wednesday, June 26, 2024

A Mileage-Based Road Fee by Any Other Name? 

A pilot “road charge” program is underway in California. It is an implantation of the mileage-based road fee that I have supported for many years. I’ve also written about the fee many times, in posts such as Tax Meets Technology on the Road, Mileage-Based Road Fees, Again, Mileage-Based Road Fees, Yet Again, Change, Tax, Mileage-Based Road Fees, and Secrecy, Pennsylvania State Gasoline Tax Increase: The Last Hurrah?, Making Progress with Mileage-Based Road Fees, Mileage-Based Road Fees Gain More Traction, Looking More Closely at Mileage-Based Road Fees, The Mileage-Based Road Fee Lives On, Is the Mileage-Based Road Fee So Terrible?, Defending the Mileage-Based Road Fee, Liquid Fuels Tax Increases on the Table, Searching For What Already Has Been Found, Tax Style, Highways Are Not Free, Mileage-Based Road Fees: Privatization and Privacy, Is the Mileage-Based Road Fee a Threat to Privacy?, So Who Should Pay for Roads?, Between Theory and Reality is the (Tax) Test, Mileage-Based Road Fee Inching Ahead, Rebutting Arguments Against Mileage-Based Road Fees, On the Mileage-Based Road Fee Highway: Young at (Tax) Heart?, To Test The Mileage-Based Road Fee, There Needs to Be a Test, What Sort of Tax or Fee Will Hawaii Use to Fix Its Highways?, And Now It’s California Facing the Road Funding Tax Issues, If Users Don’t Pay, Who Should?, Taking Responsibility for Funding Highways, Should Tax Increases Reflect Populist Sentiment?, When It Comes to the Mileage-Based Road Fee, Try It, You’ll Like It, Mileage-Based Road Fees: A Positive Trend?, Understanding the Mileage-Based Road Fee, Tax Opposition: A Costly Road to Follow, Progress on the Mileage-Based Road Fee Front?, Mileage-Based Road Fee Enters Illinois Gubernatorial Campaign, Is a User-Fee-Based System Incompatible With Progressive Income Taxation?. Will Private Ownership of Public Necessities Work?, Revenue Problems With A User Fee Solution Crying for Attention, Plans for Mileage-Based Road Fees Continue to Grow, Getting Technical With the Mileage-Based Road Fee, Once Again, Rebutting Arguments Against Mileage-Based Road Fees, Getting to the Mileage-Based Road Fee in Tiny Steps, Proposal for a Tyre Tax to Replace Fuel Taxes Needs to be Deflated, A Much Bigger Forward-Moving Step for the Mileage-Based Road Fee, Another Example of a Problem That the Mileage-Based Road Fee Can Solve, Some Observations on Recent Articles Addressing the Mileage-Based Road Fee, Mileage-Based Road Fee Meets Interstate Travel, If Not a Gasoline Tax, and Not a Mileage-Based Road Fee, Then What?>, Try It, You Might Like It (The Mileage-Based Road Fee, That Is) , The Mileage-Based Road Fee Is Superior to This Proposed “Commercial Activity Surcharge”, The Mileage-Based Road Fee Is Also Superior to This Proposed “Package Tax” or “Package Fee”, Why Delay A Mileage-Based Road Fee Until Existing Fuel Tax Amounts Are Posted at Fuel Pumps?, Using General Funds to Finance Transportation Infrastructure Not a Viable Solution, In Praise of the Mileage-Base Road Fee, What Appears to Be Criticism of the Mileage-Based Road Fee Isn’t, Though It Is a Criticism of How Congress Functions, Ignorance and Propaganda, A New Twist to the Mileage-Based Road Fee, The Mileage-Based Road Fee: Simpler, Fairer, and More Efficient Than the Alternatives, Some Updates on the Mileage-Based Road Fee, How to Pay for Street Reconstruction, Stop the "Stop EV Freeloading Act" Because The Mileage-Based Road Fee Is a Much Better Way to Go, Why Is Road Repair and Maintenance Funding So Difficult for Public Officials to Figure Out?, Should (Will) Implementing the Mileage-Based Road Fee Cause Privatization of Highway Infrastructure?, and The Freedom Caucus Doesn’t Understand that the Mileage-Based Road Fee is “PRO-Freedom,” Not the Opposite.

What caught my attention wasn’t the pilot program, but something written about it by Andrew Leahy in Week in Insights: California ‘Road Charge’ Is Sensible, if Flawed. He wrote, “The ‘road charge’ should really be a ‘transportation charge.’ And it should transparently break down how the funds raised will be allotted to road maintenance, public transit, climate change initiatives, and state remediation programs.” I tried to find information about the intended use of the California road charge revenue other than for road repair and maintenance, but I was unsuccessful. If indeed some of the revenue is earmarked for public transit, climate change initiatives, and state remediation programs, then it violates the principle that user fees should be directed to the goods or services for which the fees are being paid. I understand, for example, that one might argue that a person using a highway ought to pay for the “privilege” of avoiding the use of public transit, but considering the awful state of public transit in this nation, that sort of reasoning would lead to the concept of public transit riders paying road users for refraining from overburdening inadequate public transit facilities.

Of course, changing the word “road” to “transportation” doesn’t change the underlying question of the uses to which the revenues are put. The word “transportation” would make sense if the fee were to be applied not only to the use of roads, but also the use of airports, air space, rivers, ports, and railroad tracks. Of course, the use of the word “road” neglects the fact that drivers also use bridges, tunnels, and rest areas. But “road” suffices to convey the message. The word “transportation” would suggest uses for other transport functions and if the revenue is directed to non-transportation purposes would be as inadequate as the word “road.” Directing revenue to other purposes would give the fee too much of a resemblance to a tax. And changing the word “fee” to “tax” would make it even more challenging to persuade people and legislatures to adopt the mileage-based road fee.

Monday, June 10, 2024

More Attempts to Squash the IRS and the 98 Percent 

The Republican Party continues in its efforts to reduce taxes paid by wealthy individuals and large corporations. One tactic is marketing tax cuts for the wealthy as tax cuts for people of low and moderate income. Another tactic is to restrict the ability of the IRS to audit wealthy individuals and large corporations.

According to many sources, including this report, the most recent maneuver in this attempt to put more money in the pockets of the wealthy is legislation that would cut the IRS budget by 18 percent. Most of the cut would affect IRS enforcement spending. At the moment, the legislation has no chance of being enacted, but that will change in 2025 if Republicans manage to take control of Congress and the White House.

This is far from the first time I have written about the efforts of wealthy individuals to escape taxation. In Cutting Off the Tax Revenue Nose to Spite a Political Face, I explained how similar legislation was introduced last year was defended on the false claim that the IRS focuses its enforcement efforts on taxpayers with less than $400,000 of annual income. This claim is intended to rally support among those who, if they understood what is happening, would vote overwhelmingly to remove from office these friends of the wealthy. In a previous commentary, Fear Mongering, Tax Style, I explained why that claim, and the claim that the IRS would hire nearly 100,000 new auditors, were lies, and why they find “fertile ground in the hearts and minds of those who react quickly to emotions and fail for one reason or another to think critically and dissect the absurdity of the claims.”

I’ve previously pointed out how Republicans plan to offset some of the revenue loss created by their intended shrinkage of the IRS and gifting of more tax breaks to the wealthy. They plan to go after Social Security and Medicare. In January the same crew that is trying to cut the IRS enforcement budget pushed through another doomed effort, that is, doomed until and unless Republicans take control in 2025, to cut Social Security, Medicare, and Medicaid, in the enticingly but deceptively named Fiscal Commission Act.

It continues to amaze me how so many people will vote for candidates who plan to support legislation that works to the detriment of most of their supporters. Will they ever learn?

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