Commentary From the Mile High City

"Star of the conservative blogosphere" Denver Post

"The Rocky Mountain Alliance offers the best of what the blogosphere has to offer." -David Harsanyi, Denver Post
Joshua Sharf

 notify list
to receive email when this site is updated, enter your email address:
 recent posts
24 (2 entries)
Anglosphere (1 entries)
Biking (1 entries)
Blogging (35 entries)
Business (173 entries)
CFA (3 entries)
China (5 entries)
Climate Change (3 entries)
Colorado (20 entries)
Denver (12 entries)
Design (4 entries)
Economics (39 entries)
Education (6 entries)
Electoral College (1 entries)
Environmentalism (3 entries)
Europe (0 entries)
Flying (2 entries)
Foreign Affairs (1 entries)
General (89 entries)
Gun Control (2 entries)
Health Care (7 entries)
Higher Ed (7 entries)
History (8 entries)
Home Improvement (1 entries)
Illegal Immigration (35 entries)
Internet (4 entries)
Israel (57 entries)
Jewish (49 entries)
Judicial Nominations (12 entries)
Katrina (0 entries)
Literature (1 entries)
Media (37 entries)
Music (3 entries)
Photoblogging (32 entries)
Politics (152 entries)
Porkbusters (5 entries)
Radio (16 entries)
Religion (1 entries)
Reviews (8 entries)
Robed Masters (4 entries)
Science (1 entries)
Sports (9 entries)
Taxes (2 entries)
Transportation (6 entries)
Unions (1 entries)
War on Terror (180 entries)
my other blogs
Three-Letter Monte

Rocky Mtn. Alliance
Best Destiny
Daily Blogster
Geezerville USA
Mount Virtus
Night Twister
Rocky Mountain Right
Slapstick Politics
The New Conservative
Thinking Right
View from a Height

other blogs
One Big Swede
American Thinker
Meryl Yourish
NRO Corner
Little Green Footballs
No Left Turns
A Constrained Vision

business blogs
Accidental Verbosity
Assymetrical Information
Carnival of the Capitalists
Cold Springs Shops
Commodity Trader
Coyote Blog
Different River
Everyone's Illusion
Fast Company Blog
Financial Rounds
Freakonomics Blog
Management Craft
Trader Mike
Carnival of the Capitalists Submission

business data
Inst. Supply Mgmt.
St. Louis Fed Economic Data
Nat'l Bureau of Economic Research
Economic Calendar
Stock Charts

colorado blogs
Pirate Ballerina
Pagan Capitalist
Boker Tov, Boulder
Colorado Pols
Jeff Sherman

<-?Colorado BlogRing#->

sites, not blogs
Thinking Rock Press
 help israel
Israel Travel Ministry
Friends of the IDF
Volunteers for Israel
Magen David Adom
 1939 World's Fair
1939: The Lost World of the Fair
The New York World's Fair: 1939-1940
The Last Great Fair by Jeffrey Hart
Iconography of Hope (U.Va.)
Images From the '39 Fair
Tour the 1939 New York Fair
Powered by
Movable Type 3.2

« Colorado Senate Republicans Start to Get It | Main | How Not To Invest In Real Estate »

Rationalizing Costs & Revenue

The Governor of Oregon has come under fire for wanting to replace the gas tax with a mileage tax. He wants to use GPS to track residents' mileage, and then assess the tax at the pump.

At first glance, this might seem like the right way to assess the tax. Wear and tear on roads is more closely related to miles driven than to gallons of gas consumed. In practice, it's a terrible mis-assessment of taxes, raising questions of jurisdiction, cost-to-revenue matching, government-sponsored behavior modification, and CAFE standards. And that's without the intrusiveness of the government watching where you drive your car.

If gas tax revenues are down, it results from some combination of better mileage and less driving. Better mileage undermines the argument for higher CAFE standards, as it happened without them.

Less driving - supposedly the behavior we all want - shows the dangers of using the government as a massive behavior-modification program. Governments do a terrible job of matching revenue structure to cost structure; if successful, the programs that were dependent on sinful excess suffer.

I've written about Denver Water's experience (and now neighboring Aurora's experience) a couple of times. Almost all of their costs are fixed, so higher charges result in lower usage, and less revenue, but does little to lower costs. They raise rates even further, enraging consumers who are already watching their yards turn brown in years of plentiful snowpack.

We've seen this with smoking. Smoking in the US is down, and yields on tobacco-backed revenue bonds are up. Long-term bonds paying 5% coupon are routinely priced at 9% yield-to-maturity. This in a declining interest-rate environment, with a tax-free coupon. Often, these bonds are now rated at just over junk level.

Ideally, fees would allocate taxes to the roads being driven and their maintenance costs, from the drivers using them. But it isn't necessary to tax each driver preicsely; it's only necessary to make sure that aggregate collections match aggregate costs.

A mileage tax would tax only Oregonians. But they drive in neighboring states, and Washingtonians and Californians use Oregon's roads. All things being equal, I'm most likely to fill up in a jurisdiction where I do most of my driving. And under such conditions, a point-of-sale system would ensure that every jurisdiction would collect its fair share of road use taxes over time.

All things being equal. Of course, they're not. I no longer drive out of my way to get better gas prices. But I will try to nurse a tank to get to the cheapest gas near my regular route. Bureaucrats argue that this leads to competition. As though there were something wrong with that.

Post a comment

(If you haven't left a comment here before, you may need to be approved by the site owner before your comment will appear. Until then, it won't appear on the entry. Thanks for waiting.)


Power, Faith, and Fantasy

Six Days of War

An Army of Davids

Learning to Read Midrash

Size Matters

Deals From Hell

A War Like No Other


A Civil War

Supreme Command

The (Mis)Behavior of Markets

The Wisdom of Crowds

Inventing Money

When Genius Failed

Blink: The Power of Thinking Without Thinking

Back in Action : An American Soldier's Story of Courage, Faith and Fortitude

How Would You Move Mt. Fuji?

Good to Great

Built to Last

Financial Fine Print

The Day the Universe Changed


The Multiple Identities of the Middle-East

The Case for Democracy

A Better War: The Unexamined Victories and Final Tragedy of America's Last Years in Vietnam

The Italians

Zakhor: Jewish History and Jewish Memory

Beyond the Verse: Talmudic Readings and Lectures

Reading Levinas/Reading Talmud