Missouri needs to invest more in transportation infrastructure. Our state has long been a critical transportation junction.
However, the way we pay for that investment is important. We should not pay for a necessary investment via inappropriate taxes any more than we should use efficient taxes to pay for unnecessary public services (e.g., tourist taxes paying for sports stadiums).
In the recent Missouri legislative session, there was a major proposal to fund new transportation investment by enacting a general transportation sales tax. This is a perfect example of doing the right thing the wrong way.
A sales tax is a poor way to fund statewide transportation needs. General taxes should fund things that are, well, general (e.g., public safety). Everyone benefits from public safety and it would be extremely difficult — and unethical — to fund it via specific taxes or fees.
It would be absurd to levy a tax on someone for calling 911, and it would be immoral to tax people living in higher-crime areas more for safety than other people.
Highways are different. A dedicated and targeted tax, namely, the gas tax, can properly fund highways. Besides the gas tax, many other states further pay for highways and bridges with tolling.
There is nothing improper or complicated about having the people who use transportation assets pay for them directly. Tolling is an excellent way to fund the projects we need because tolling does a great job of making funders separate “needs” from “wants.”
Reports of the demise of gas tax efficiency are overstated. In time, we will have to adjust the gas tax and vehicle registration system to make sure that drivers of high gas mileage vehicles such as hybrids are paying for their road usage.
That said, the most efficient way (other than tolls) to pay for roads now and for the next decade is through gas taxes, not general sales taxes.
People who walk to work, live on the family farm, or have short commutes should not pay the same for highway improvements as truckers and long-distance commuters. That is precisely what would result from a statewide transportation sales tax increase.
Not everyone has the same transportation needs, and not everyone should be forced to pay the same thing for it.
David Stokes is a policy analyst at the Show-Me Institute, which promotes market solutions for Missouri public policy.