Libertarians and transport economists for decades have advocated tolling as an alternative to fuel taxes, which have always been a poor proxy for charging users and have since become obsolete. That’s why it was so disheartening to read Rachel Alexander’s recent Townhall article “Toll Roads and Double Taxation: The Left and Libertarians Converge.” Instead of bringing greater market discipline to road funding, Alexander pushes the view that perpetuating certain government subsidies is consistent with libertarian principles.
This argument is based on a faulty premise. Instead of asking, “How should we pay for roads?” we should be asking, “How should we be paying for roads?” This distinction may seem minor, but it is not. Alexander accuses libertarians of “agree[ing] with the left on double taxation.” In this context, “double taxation” is a buzzword for a myth propagated by the trucking industry, which wants to continue receiving government subsidies.
Tolling opponents argue that roads have already been paid for, so any further funding for their upkeep therefore constitutes “double taxation.” Construction has been completed, they claim, so why should we continue to charge users for something they’ve already paid for? The idea that roads, once they have been built, are paid for is absolutely false. The majority of costs associated with a given highway over time are operating, maintenance, and rehabilitation costs—not initial construction. In fact, tolling can make it possible for users to internalize the social costs of accidents and congestion.
Another favorite argument of the “double taxation” crowd is that we are already paying for roads through other means. This is technically true, but what are those other means? Primarily, it comes in the form of non-user taxes such as property taxes or general revenue bailouts of transportation trust funds. As Alexander highlights, the majority of road spending in the United States does not come from user fees. This is a problem; it means that federal, state, and local authorities are taxing everyone to subsidize the road use of some. The proper and pragmatic libertarian solution would be to expand tolling in order to shrink the share of non-user revenue and eventually phase it out completely.
The idea that tolling is too costly ignores recent research. A recent Reason Foundation study found that modern all-electronic toll collection costs were now broadly on par with collection costs for fuel excise taxes. And under all-electronic tolling, there is no need for costly and congestion-inducing manual tollbooth collection.
In contrast to the claim that public-private partnerships (P3s) are “essentially crony capitalism,” P3s are important tools to advance private-sector ownership and control of the road network. While long-term concessions based on a “design-build-finance-operate-maintain” model do not technically amount to full privatization, they do increase private sector involvement in infrastructure ownership and management. P3s also serve as demonstration models that could facilitate full privatization at the end of the concession agreements.
Alexander also repeats the “Lexus Lane” myth that toll lanes are only for rich motorists. On the contrary, lower-income commuters also need to get places on time and are often willing to pay for the ability to do so, as research findings show. Yet somehow, Alexander suggests that denying lower-income drivers the choice to pay for travel-time savings is consistent with libertarian principles. Equity concerns could be better addressed by offering lower-income drivers toll reimbursements or travel vouchers.
Furthermore, linking the monstrously irresponsible Central Artery project in Boston (widely known as “The Big Dig”) with tolling is disingenuous at best. The article she cites as proof of toll collection’s inherent evil focuses on engineering and construction mismanagement that led to shoddy infrastructure and out-of-control cost overruns. Nowhere is tolling mentioned—probably because Massachusetts’ limited use of tolling had absolutely nothing to do with The Big Dig disaster.
Concern over penalties for turnpike scofflaws and arguments to continue our current road subsidization schemes ignore the most important question: how should we be paying for roads? To transportation experts at national libertarian think tanks, including the Reason Foundation, Cato Institute, Independent Institute, and my own Competitive Enterprise Institute, the answer is clear: more tolling, more decentralization, and more private-sector provision of roads. And it isn’t just libertarians: conservative transportation analysts affiliated with the Heritage Foundation and American Enterprise Institute share our goal of curtailing road socialism.
Is it the case that virtually every libertarian transportation scholar in existence holds profoundly un-libertarian views regarding transportation and that their support for tolling is an egregious ideological sin? I suppose it’s possible, but Alexander’s case as presented runs against the overwhelming opinion of experts at some of the most renowned free-market think tanks in the United States.