On Wednesday, October 6, 2004 at 13:52:37 (-0700) Devine, James writes: >toll roads are usually justified by the idea of user fees -- if you're >using a resource like a toll road, you should pay for it, for its wear >& tear -- or by the idea of congestion: if you drive on the road, you >impose congestion costs on others and should pay. One reason to bring >them is that it's may be hard politically to raise gasoline taxes >which are often seen as user fees on road use. Also, some businesses >want to gain by running toll roads for profit (privatization), as in >Orange County, CA. However, my prediction is that such private toll >roads eventually become government-owned or highly regulated, >effectively becoming quasi-statal. High fixed costs and large external >effects encourage this result. To the extent that toll roads are a >substitute for public mass transit, they're definitely regressive.
Thanks for the reply. Fixed costs as opposed to sunk costs? You mean things like resurfacing the roads? What do you mean by "external effects"? What about the two questions I raised: how can you justify a regressive tax that costs a janitor 10% of his hourly wage to drive to and from work each day while costing Michael Dell .00000000000001% of his hourly wage? Do those who push toll roads even acknowledge this let alone try to justify this? How can you justify not charging Michael Dell for the 1,000 employees, including janitors, who drive to and from his business to work for his profit? This is a different question from that of regressive taxes. I don't know what to call it --- a version of the free rider problem? What about my argument that without the roads Mr. Dell would likely have an income of about zero, so having him pay a large portion of the costs when he benefits so immensely from it is not unfair? Was that a reasonable argument or a vulnerable one? Bill
