Highways Don't Pay For Themselves, Even When They Do

MLewyn's picture

One common argument for the highway-centric status quo is that highways pay for themselves, while trains and buses are government-subsidized.  This argument has been debunked again and again, and the debunking itself has even been debunked.

But even if the road system as a whole pays for itself (that is, the amount of vehicle-related taxes is equal to the amount of road spending) many roads are still highly subsidized by government. 

Why?  Because roads are heavily cross-subsidized: that is, the users of one road pay not for that road, but for other roads used by other people.  For example, suppose I live in an inner suburb at the edge of a small city three or four miles from downtown, and 90% of my travel is within the city limits.  However, most of my state's road spending goes to suburban highways that shift development to suburbs far from my neighborhood.  In this scenario, my gas tax money is not going to the roads I drive on; in fact, it is going to roads that benefit people who live far from where I live.  Thus, I am essentially subsidizing suburban and rural drivers. 

The only way to eliminate such subsidies would be to make every road a toll road, so that my taxes would only go to roads I drive on.  This may be practical for limited-access highways, though I do not see how it could become practical for surface streets.


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