Skip Navigation

Transportation

Economy
January 17, 2017
Arkansas Taxicab Owner Beats City Hall in Anti-Monopoly Case
A Pulaski County, Arkansas judge ruled in favor of a small business owner in December 2016, finding lawmakers in Little Rock violated the state’s constitution by restricting the number of taxicab companies allowed to operate in the city.
Transportation
November 15, 2016
Wisconsin Gov. Walker Proposes More Road Funding for Cities
Wisconsin Gov. Scott Walker (R) is proposing to increase state funding for local road construction projects in 2017.
Economy
November 8, 2016
Federal Judges Dismiss Chicago Taxicab Owners’ Lawsuit
Federal judges rejected an appeal filed by Chicago taxicab companies claiming the city government was violating the companies’ constitutional rights by not applying taxicab regulations to peer-to-peer economy transportation network companies (TNCs).
More News
Regulation
October 21, 2016
Massachusetts State Agency Begins Implementing New Taxi Subsidy Law
With Massachusetts lawmakers having passed a last-minute bill taxing Uber and other sharing-economy transportation companies to help subsidize taxicab companies, a state government agency is implementing the subsidy process.
Government Spending
October 21, 2016
Boston Transit Agency Privatizes Cash Operations
Officials overseeing a Boston, Massachusetts government-operated transportation agency voted to turn responsibility for some administrative operations over to a private business.
Taxes
August 23, 2016
State Agencies Plan Road User Fee Pilot Programs
Lawmakers in several states are applying for federal government grants, sponsored by the Federal Highway Administration, to fund programs to study the viability of implementing mileage-based user fees (MBUFs).
 

The Issue

Throughout the United States, concern is being raised over the deteriorating condition of the nation's roads and bridges. High-quality roads are essential for safe and fast commuting, the transport of freight, and the delivery of goods. Yet years of deferred maintenance, politicization of investment decisions, and diversion to other uses of funds raised for roads have resulted in declining road conditions and rising congestion.

Gasoline taxes are an ineffective, regressive tax which has increasingly left transportation systems shortchanged. In recent years, the rise of fuel-efficient cars has decreased motor-fuel tax coffers and disproportionately shifted the burden to low-income drivers, a group that typically owns older, less fuel-efficient vehicles.

Gas taxes also disproportionately shift the burden to low-income drivers, a group that typically owns older, less fuel-efficient vehicles. According to Americans for Prosperity, households with incomes of less than $50,000 per year currently spend more than 20 percent of their after-tax income on energy. Although gas prices are comparatively low today, there are no assurances they will remain this way, whereas the gas tax hike would be permanent.

The fact gas taxes have not increased over time does not mean they need to be increased now. Gas taxes are a regressive tax hike which Wendell Cox and Ronald Utt argue has a stronger effect on lower- and middle-income families than it does on the wealthy. The tax could also cause low-income families to drive less, which could reduce employment options. Americans for Prosperity estimates lower gas prices amount to approximately $100 in additional spendable income per month for an average family, which means the recent nationwide drop in gas prices could potentially lead to an additional $100 billion of economic growth.

Our Stance

In The Wealth of Nations, Adam Smith argues when infrastructure is constructed and maintained using user fees and decentralized, new construction occurs only when market demand justifies it. Legislators should take a look at the inflated cost of public construction projects in their states before they allow any tax or fee hikes.

One option states should consider are public private partnerships (P3). P3s are a contract agreement between a public sector authority and a private party under which the private company provides a public service or project while taking on a substantial portion of the risk involved with the project. Transportation P3s offer several advantages, including improved access to capital, flexibility and improved innovation.

Featured Subtopics

A new car dealership lot
Corporate Average Fuel Economy (CAFE) standards were originally adopted out of fear of depleting fossil fuel reserves, then fear of dependency on OPEC for oil, and most recently justified based on fear of man-made global warming.
Roadway under construction with equipment
Public-private partnerships (P3) allow private companies to undertake construction or management of infrastructure projects while keeping the public sector accountable.
Two men in a car together
Imposing burdensome regulations on ridesharing providers would suppress competition, increase cronyism, and reduce access to transportation options that are reliable, safe, and affordable. Instead of increasing regulations on the rideshare industry, policymakers should consider reforming and removing regulations from traditional taxicab services that make them less competitive.

Additional Subtopics

  • Amtrak
  • Cars and Trucks
  • Congestion
  • Driverless Cars
  • Electric Vehicles
  • Federal Aid
  • Gas Tax
  • High Speed Rail
  • Public Transit
  • Roads
  • Safety
  • Taxicabs
  • Toll Roads

Videos

Title: Randall O'Toole, P9
Description: The future of transportation.

Transportation Experts Team

The Heartland Institute's experts on transportation policy issues are available for legislative testimony, speaking engagements, and media interviews.

Staff & Fellows Policy Experts