Alternative Approaches to the Taxation of Heavy Vehicles Applications Manual (1997) / Chapter Skim
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7.0 Economic Efficiency
7.0 Economic Efficiency
Pages 63-68
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From page 63... ...
Consideration of the external costs and economic efficiency of tax alternatives frequently should be useful as a means of choosing between two alternatives that otherwise appear to be comparably attractive. In particular, we observe in the second section that, even without unplementing externality charges, the ability of most or ah highway tax systems to promote economic efficiency can be improved by reducing the amount of revenue obtained from fees that do not vary with VMT and increasing the amount obtained from fees (such as fuel taxes, toils and mileage-related taxes)
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From page 64... ...
3. The value of He time saved by other vehicles as a result of decreased congestion on parallel facilities; The value of time lost by HOV occupants as a result of increased congestion on the HOV lane; A
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From page 65... ...
Efficiency ratios differ from equity ratios In several ways: The denominators of efficiency ratios include external costs in addition to the public agency costs used in the denominators of equity ratios; Only costs and revenues that vary with vehicle use are reflected in the efficiency ratios; Efficiency ratios reflect all marginal taxes and fees paid for vehicle operation regardless of the government to which they are paid and regardless of whether or not the revenue is used for highway purposes; and These ratios reflect aD marginal public agency costs of vehicle operation regarcIless of the government that pays these costs. In sum, efficiency ratios for a class of vehicles may be viewed as equity ratios obtained for an aB levels of government analysis that includes all external costs and user-charge revenue diverted to non-highway purposes but excludes all highway costs and user charges (such as registration fees)
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From page 66... ...
; and · Decreasing Me amount of non-highway revenue obtained from highway fuel taxes and over VMl-related taxes - a 50 cents per gallon tax on highway fuel produces a 6 Ibid, Tables V-22 - V-24 and V-26. 7 A footnote in Section 2.4 concludes that ideally, to avoid encouraging inappropriate modal diversion, rail-competitive trucks should be charged for Weir marginal public-sector infrastructure costs plus the estimated net difference (per ton-mile)
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From page 67... ...
Other means of improving the economic efficiency of highway tax systems Include various proposals for congestion fees and emissions fees, some of which are discussed in Chapter 7 of the main volume of this report. The external costs of operating an automobile on the rural Interstate system are estimated to average 1.8 cents per mile exclusive of air pollution costs (Federal Highway Cost Allocation Study, op.
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From page 68... ...
Alternative Approaches to Heady Vehicle Taxation Applications Manual- Economic Efficiency 68 Cambridge Systematics, Inc.
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