Car subsidies

From Suburban Nation: The Rise of Sprawl and the Decline of the
American Dream by Andres Duany, Elizabeth Plater-Zyberk, and Jeff
Speck

THE AUTOMOBILE SUBSIDY

"According to Hart and Spivak, government subsidies for highways and
parking alone amount to between 8 and 10 percent of our gross
national product, the equivalent of a fuel tax of approximately $3.50
per gallon. If this tax were to account for the "soft" costs such as
pollution cleanup and emergency medical treatment, it would be as
high as $9.50 per gallon. The cost of these subsidies -
approximately $5,000 per car per year - is passed directly on to the
American citizen in the form of increased prices for products or,
more often, as income, property, and sales taxes. This means that
the hidden costs of driving are paid by everyone: not just drivers,
but also those too old or too poor to drive a car. And these people
suffer doubly, as the very transit systems they count on for mobility
have gone out of business, unable to compete with the heavily
subsidized highways.

Even more irksome is the fact that spending on transit creates twice
as many new jobs as spending on highways. Every billion dollars
reallocated from road building to transit creates seven thousand
jobs. Congress's recent $41 billion highway bill, had it been
allocated to transit, would have employed an additional quarter-
million people nationwide.

Because they do not pay the full price of driving, most car owners
choose to drive as much as possible. They are making the correct
economic decision, but not in a free-market economy. As Hart and
Spivak note, an appropriate analogy is Stalin's Gosplan, a Soviet
agency that set arbitrary "correct" prices for many consumer goods,
irrespective of their cost of production, with unsurprising results.
In the American version of Gosplan, gasoline costs one quarter of
what it did in 1929 (in real dollars). One need look no further for
a reason why American cities continue to sprawl into the
countryside. In Europe, where gasoline costs about four times the
American price, long-distance commuting is the exclusive privilege of
the wealthy, and there is relatively little suburban sprawl.

The American Gosplan pertains to shipping as well. In the current
structure of subsidization, trucking is heavily favored over rail
transport, even though trucks consume fifteen times the fuel for the
equivalent job. The government pays a $300 billion subsidy to
truckers unthinkingly, while carefully scrutinizing every dollar
allocated to transit. Similarly, we try to solve our commuter
traffic problems by building highways instead of railways, even
though it takes fifteen lanes of highway to move as many people as
one lane of track. This predisposition toward automobile use is
plainly evident in the prevalent terminology: money spent on roads
is called "highway investment," while money spent on rails is called
"transit subsidy."

While there are many supposedly "anti-business" arguments for a
higher gas tax - from fighting global warming to supporting public
transit - the real justification is economic: subsidized automobile
use is the single largest violation of the free-market principle in
U.S. fiscal policy. Economic efficiencies in this country due to
automotive subsidization are estimated at $700 billion annually,
which powerfully undermines America's ability to compete in the
global economy. Although suburban sprawl is the concern in this
book, it is not the only sad result of this fundamental error.

Suburban Nation: The Rise of Sprawl and the Decline of the American
Dream by Andres Duany, Elizabeth Plater-Zyberk, and Jeff Speck

Published by North Point Press, a division of Farrar, Straus, and
Giroux 2000

Message: 3
Date: Sat, 22 Sep 2007 10:44:26 -0700
From: Jennifer Stanley
Subject: Re: [Ebbc-Talk] car subsidies, including artifically low US
gas prices
To: EBBC
Message-ID: <02F30ECA-AB66-4AF1-BAEA-599A3A7D3AE2@jxstanley.com>
Content-Type: text/plain; charset=US-ASCII; delsp=yes; format=flowed

James et al,

In addition to the wealth of info at http://www.worldcarfree.net/
resources/stats.php, also see http://vtpi.org/ (The Victoria
Transportation Policy Institute). You may be particularly interested
in Transportation Cost and Benefit Analysis at http://www.vtpi.org/
tca/. Also see the Surface Transportation Policy Partnership website:
http://www.transact.org/

-Jennifer

On Sep 22, 2007, at 10:35 AM, james van dyke wrote:

> Ron, regarding your quest for data on car subsidies, I've been
> having trouble finding answers too, and believe this data is truly
> crucial to changing US transportation choices. I'm intrigued in how
> consumer's efficiency-related choices related to motor vehicles
> (size of car, miles traveled, use of car pooling, etc) are heavily
> determined by the price of gas, and due to a form of subsidies in
> which gas prices are kept artificially low in this country. While
> good data is surprisingly hard to find on this, we know that those
> who choose not to drive cars significantly subsidize those who do,
> because a variety of costs of our auto-related society come from
> all forms of taxes: federal, state, income, etc. This is beyond
> just roadway maintainable or highway patrol costs: even health care
> expenses due to air pollution are passed on to society at large,
> with auto drivers paying the same share as someone that exclusively
> relies on bikes or mass transit.
>
> I've searched without success for hard data on what the price of
> gas would be if only auto drivers fully paid even the most direct
> related costs (roads building and maintenance, related law
> enforcement, etc). And discussions seem to be clouded with a red
> herring argument: "an increase in gas taxes will hurt the
> poor!" (This statement need not be true if gas taxes also include
> the cost of mass transit subsidies.)
>
> Perhaps Europe's system of $5-6/gallon combined with luxury taxes
> on ridiculously large and inefficient personal vehicles is a good
> example of how consumers *will* make healthier transportation
> choices when gas prices reflect the direct personal and societal
> impact of their decision. But we still need the data!
>
> -James Van Dyke (capitalist, business owner, concerned citizen)
>
>
>
>
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------------------------------

Message: 4
Date: Sat, 22 Sep 2007 11:53:39 -0700 (PDT)
From: Eric McCaughrin
Subject: Re: [Ebbc-Talk] car subsidies, including artifically low US
gas prices
To: ebbc-talk@lists.ebbc.org
Message-ID:

Content-Type: text/plain; charset=UTF-8; format=flowed

> Ron, regarding your quest for data on car subsidies, I've been
> having trouble finding answers too, and believe this data is truly
> crucial to changing US transportation choices.

The Bureau of Transportation Statistics (BTS) generally tracks
this kind of info. For example, the following chart summarizes
subsidies through the year 2001:

http://www.bts.gov/publications/
government_transportation_financial_statistics/2003/html/table_15.html

This database application will show you expenditures:
http://www.bts.gov/xml/gf/src/select1.xml?TABLE=3103&dispmax=6

Other studies (including some from the BTS) have tried
to quantify the indirect costs; i.e. death and injury from
accidents, military expenditures, etc.

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