On Thursday, October 7, 2004 at 09:27:43 (-0400) Charles Brown writes:
>________________________________
>
>Hellooooo, economists of the progressive stripe? Why no interest in
>the fairness toll roads? We here in Austin, TX are getting toll roads
>out the wazoo, to put it delicately, and I need some help, any of
>which would be appreciated.
>
>
>Bill
>
>^^^^^^^^
>CB: I would like to hear more of what you have to say on the model you gave.
Quoting myself, pondering the fate of a business owner who made annual
profits of $1,000,000 in a society with roads on which, inter alia,
his company employees traveled to work:
Without roads, I would have no business, so my income after
paying for the roads would go from 0 to $635,000. In other
words, if I had to invest the money for the roads up front, I
would get a return of 75% (a net profit of $270,000 = $635,000 -
$365,000)- on my investment --- a phenomenal annual rate of
return. So, we could think of it this way --- I borrow $365,000
from the government at the beginning of the year, they provide
roads, and then I make my $1,000,000, and then I pay the
government (the other citizens, in other words) back the money I
OWE them --- which is a bargain because I'm paying no interest.
Is that a reasonable way to look at it?
What I'm curious about is if this is a reasonable start. I would like
to try to come up with an accounting of the value of roads (here,
$365,000 invested yields $1,000,000 profits --- we could also look at
wages) and from that deduce a starting point for taxing people who
benefit monetarily from them. We might also want to include in our
calculations ability to pay (janitors should be taxed at a lower
percentage of their income), and perhaps individual use, though the
latter is almost surely a very minor component (99% of a janitor's use
of the roads in our case is really for Michael Dell; the janitor's joy
ride in the countryside is statistically insignificant).
If possible, I'd like to come up with a hypothetical town with a few
industries, populate it with workers and owners, come up with
reasonable incomes, and from that figure out what roads are worth to
each actor in the model, just as a starting point.
Bill
