Tuesday, October 26, 2010

Transit policy is screwing me over (II)

Josh Barro (a conservative!) seems to largely agree with me in this piece at RealClearMarkets:

Critics of higher gas taxes will note that some gas tax revenue is diverted to non-highway purposes. That's true, but the amount was only $24 billion in 2008, less than half the amount of general revenue diverted to highways. $15 billion of the gas tax diversion was to mass transit, whose use produces positive externalities for drivers by reducing traffic. And that $24 billion only approximately offsets the value of a major tax preference for drivers: the fact that in almost all states, gasoline sales are not subject to general sales tax. Overall, drivers are net recipients of a significant and growing government subsidy, which a change to the gas tax could help offset.

I don't agree with his last line, necessarily, that this should be used as an excuse to then extend the Bush tax cuts. But overall, very good piece.

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