# Gas Tax



## Andrew

Gas Tax Revenues are down due to the recent Recession and more Americans driving hybrid cars, etc.

Isn't it time for the United States to raise the Gas Tax?


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## the_traveler

It's very strange to hear someone say that.



> Less people are driving, so let's raise the gas tax!





> Less people are shopping, so let's raise the sales tax!





> Less people are traveling, so let's raise the transportation tax!


etc...
If the governor or president said that, he/she would hear calls for impeachment!


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## Ryan

It's not strange, it's perfectly logical.

Revenues from the gas tax are desperately needed to build and maintain our roads. Unfortunately, because the Federal gas tax hasn't been raised in over 20 years and isn't indexed to inflation (and is a flat rate, not a percentage of the gas price), combined with less fuel being used (both from increased fuel economy and decreasing vehicle miles travelled), means the money just isn't there.

We would need $1.61 in gas tax revenue today to purchase the same amount of stuff that $1.00 would have purchased in 1993 when the gas tax rate was last reset.


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## afigg

Andrew said:


> Gas Tax Revenues are down due to the recent Recession and more Americans driving hybrid cars, etc.
> 
> Isn't it time for the United States to raise the Gas Tax?


Yes. The federal excise tax of 18.3 cents/gallon on gasoline has not changed since 1993. Construction costs have gone up a wee bit since then. The Highway Trust Fund (HTF) is about to run out of money later this year, which may finally force Congress to step up and either raise the excise tax, switch to a wholesale tax on gas component, or find other sources of revenue. The problem is that even an adjustment only for inflation since 1993 in the gas excise tax would cause some to go nuts.

On the other hand, VA, MD, PA, MA, Wyoming are among the states that either raised gas taxes or other taxes in 2013 to pay for transportation and infrastructure needs. So it should not be impossible.

The pending depletion of the HTF and the renewals of the transportation bill and Amtrak reauthorization will be the topic of much discussion and debate on Capitol Hill over the next 6 months. This is why Boardman is calling for a Transportation Trust Fund to replace the HTF so Amtrak can get steady funding from the trust fund rather than be totally dependent on varying annual funding from Congress.


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## Andrew

afigg said:


> Andrew said:
> 
> 
> 
> Gas Tax Revenues are down due to the recent Recession and more Americans driving hybrid cars, etc.
> 
> Isn't it time for the United States to raise the Gas Tax?
> 
> 
> 
> Yes. The federal excise tax of 18.3 cents/gallon on gasoline has not changed since 1993. Construction costs have gone up a wee bit since then. The Highway Trust Fund (HTF) is about to run out of money later this year, which may finally force Congress to step up and either raise the excise tax, switch to a wholesale tax on gas component, or find other sources of revenue. The problem is that even an adjustment only for inflation since 1993 in the gas excise tax would cause some to go nuts.
> 
> On the other hand, VA, MD, PA, MA, Wyoming are among the states that either raised gas taxes or other taxes in 2013 to pay for transportation and infrastructure needs. So it should not be impossible.
> 
> The pending depletion of the HTF and the renewals of the transportation bill and Amtrak reauthorization will be the topic of much discussion and debate on Capitol Hill over the next 6 months. This is why Boardman is calling for a Transportation Trust Fund to replace the HTF so Amtrak can get steady funding from the trust fund rather than be totally dependent on varying annual funding from Congress.
Click to expand...

Wouldn't this Trust Fund last 6 years under Amtrak's proposal?


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## AlanB

afigg said:


> The Highway Trust Fund (HTF) is about to run out of money later this year, which may finally force Congress to step up and either raise the excise tax, switch to a wholesale tax on gas component, or find other sources of revenue.


The HTF has run out of money every year since 2008 and has required an infusion of funds from the General fund to remain solvent. It has to a large extent become one of the bigger Third Rails around; no one wants to touch it for fear of being electrocuted, which in politics means being voted out.


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## cirdan

RyanS said:


> It's not strange, it's perfectly logical.
> 
> Revenues from the gas tax are desperately needed to build and maintain our roads. Unfortunately, because the Federal gas tax hasn't been raised in over 20 years and isn't indexed to inflation (and is a flat rate, not a percentage of the gas price), combined with less fuel being used (both from increased fuel economy and decreasing vehicle miles travelled), means the money just isn't there.
> 
> We would need $1.61 in gas tax revenue today to purchase the same amount of stuff that $1.00 would have purchased in 1993 when the gas tax rate was last reset.


I've often wondered what will happen once (if?) electric cars start gaining a meaningful market share.

Will an extra electricity tax be introduced to match the gas tax and make sure electric cars also contribute their part to the roads they use?

If you only charge cars at special charging stations, that would be easy. But with people able to charge at home, not so, unless you want to make all electricity more expensive, which would be counter productive and massively hurt industry and manufacturing.

Or will it be time to move away from gas tax and finance roads by road pricing such as charging people to drive into cities (as is done in London) plus converting existing freeways into turnpikes?

That might work for big highways and big cities. But small towns and little roads wouldn't be able to do that, or if they did, they wouldn't collect much revenue (yet costs of collection would be high). Yet these roads also need investment and money.

Besides which, any such proposal would be met with massive opposition and probably never get implemented.


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## Ryan

Eventually I think that we're going to have to go to a vehicle miles traveled tax.

States with annual inspections can just read the odometer every year at the inspection and charge accordingly.

States without them may have to implement them (or at least annual odometer readings).


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## cirdan

RyanS said:


> Eventually I think that we're going to have to go to a vehicle miles traveled tax.
> 
> States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
> 
> States without them may have to implement them (or at least annual odometer readings).


 That would be one approach, but it might disprportioantely hurt people in rural areas who

1) need to driver more and further all the time to get to work, shop etc

2) don't have ready access to alternatives such as public transportation

3) benefit disproprtionately little from that revenue as most of the cash goes into big highway projects within or between big cities. Very little gets spent on fixing up little rural roads.

So effectively those who would contribute the most would get back the least.


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## Ryan

That sounds completely backwards. People that drive further and more frequently should pay more than those who take shorter trips and take advantage of public transit.


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## jebr

cirdan said:


> RyanS said:
> 
> 
> 
> Eventually I think that we're going to have to go to a vehicle miles traveled tax.
> 
> States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
> 
> States without them may have to implement them (or at least annual odometer readings).
> 
> 
> 
> That would be one approach, but it might disprportioantely hurt people in rural areas who
> 
> 1) need to driver more and further all the time to get to work, shop etc
> 
> 2) don't have ready access to alternatives such as public transportation
> 
> 3) benefit disproprtionately little from that revenue as most of the cash goes into big highway projects within or between big cities. Very little gets spent on fixing up little rural roads.
> 
> So effectively those who would contribute the most would get back the least.
Click to expand...

Under today's system they still wind up paying more anyways. It's slightly less drastic as most vehicles get better highway gas mileage than city, but they still pay more.

I'd also need to see some hard figures in terms of rural areas getting very little in return. Yes, mega-projects get done in the big cities, but they also have a lot more vehicle miles per mile of road, so more money will need to be spent there. Hopefully, though, some of that money will be allocated on the state level to help pay for county/township roads, which would not directly get any benefit from the increased tax (as aside from any cost-sharing with the state or federal government, those roads are paid by property taxes, not gas tax.) I don't know how vital those roads are in the city, but out in the country those roads are vital towards having a strong road infrastructure.


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## Trogdor

Once you get out into rural areas, the amount of infrastructure they actually have (paved roads with constant maintenance, municipal water/sewerage hooked up to indoor plumbing, etc.) tends to be quite low. But if they are making frequent, longer trips into town using those improved roads, then they are using the infrastructure and thus should pay for it.

There's no perfect way of setting up a fee structure that's 100% fair. The "most fair" from a fee perspective would be tolls, but that would either be impractical (toll booths every few feet), or be unacceptably invasive of one's privacy (tracking devices on people's cars that show where you've been and every road you've taken; this is different from the transponders that only check you at certain points on the highway because it's easy enough to avoid something like that).

The gas tax isn't going to work for vehicles that don't use gasoline/diesel fuel. Those vehicles may not contribute as much to air pollution, but they certainly do contribute to infrastructure needs.

I figure the best fee structure currently practical would be a combination of gas tax (mainly to curb pollution/discourage burning of fossil fuels when not needed), VMT (obviously adjusted for the weight of a vehicle, which would cover the maintenance of the roadways), and tolls/congestion charges in certain areas to discourage driving in the busiest areas.

If you wanted to dedicate the funding, the gas tax could go to clean energy research, VMT would go to infrastructure maintenance, and congestion charges would go to public transit investment. Not that I'm expecting any of this to be feasible in the current political climate.


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## SarahZ

Michigan's take on hybrid/electric vehicles:

http://insideevs.com/michigans-road-use-feetax-on-hybrid-and-electric-vehicles-now-hotly-debated-topic-in-house-transportation-committee/

I looked up Michigan House Bill 4632, but I can't tell if it's gone to a vote yet:

http://www.legislature.mi.gov/(S(w4xofc455jzkrw45r2tdfx45))/mileg.aspx?page=GetObject&objectname=2013-HB-4632


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## AlanB

cirdan said:


> 3) benefit disproprtionately little from that revenue as most of the cash goes into big highway projects within or between big cities. Very little gets spent on fixing up little rural roads.


The Texas DOT did a study a few years back and found that Freeways within cities came closer to covering their costs via fuel taxes. They still fell short, but it was the rural areas that got the biggest subsidies to keep those highways going.


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## Andrew

If Republicans refuse to increase subsidies for mass transit, then they will have a very hard time beating Clinton in 2016...


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## Ryan

There's approximately 3,674 issues that will influence the outcome of the election more than their stance on mass transit subsidies.


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## cirdan

Trogdor said:


> Once you get out into rural areas, the amount of infrastructure they actually have (paved roads with constant maintenance, municipal water/sewerage hooked up to indoor plumbing, etc.) tends to be quite low. But if they are making frequent, longer trips into town using those improved roads, then they are using the infrastructure and thus should pay for it.
> 
> There's no perfect way of setting up a fee structure that's 100% fair. The "most fair" from a fee perspective would be tolls, but that would either be impractical (toll booths every few feet), or be unacceptably invasive of one's privacy (tracking devices on people's cars that show where you've been and every road you've taken; this is different from the transponders that only check you at certain points on the highway because it's easy enough to avoid something like that).
> 
> The gas tax isn't going to work for vehicles that don't use gasoline/diesel fuel. Those vehicles may not contribute as much to air pollution, but they certainly do contribute to infrastructure needs.
> 
> I figure the best fee structure currently practical would be a combination of gas tax (mainly to curb pollution/discourage burning of fossil fuels when not needed), VMT (obviously adjusted for the weight of a vehicle, which would cover the maintenance of the roadways), and tolls/congestion charges in certain areas to discourage driving in the busiest areas.
> 
> If you wanted to dedicate the funding, the gas tax could go to clean energy research, VMT would go to infrastructure maintenance, and congestion charges would go to public transit investment. Not that I'm expecting any of this to be feasible in the current political climate.


 I think big cities should do what London has done and introduce a congestion charge. Anybody who takes their vehicle within a certain area has to pay. Enforcement is by automatic cameras that recognise the vehicle's registration plates and cross check with a database to see if they've payed (and you can pay online). The bigger the city, the better public transit and thus the less need there is to drive. So nobody is being unfairly forced into this system. Excemptions apply for registered taxis, buses and I think certain classes of delivery vehicles.


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## jis

Yup, as far as critical factor in election goes, mass transit subsidy falls basically in the background noise category.


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## Ryan

Trogdor said:


> I figure the best fee structure currently practical would be a combination of gas tax (mainly to curb pollution/discourage burning of fossil fuels when not needed), VMT (obviously adjusted for the weight of a vehicle, which would cover the maintenance of the roadways), and tolls/congestion charges in certain areas to discourage driving in the busiest areas.


Agree completely that a combination of the three is going to be the best solution.


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## Green Maned Lion

Andrew said:


> If Republicans refuse to increase subsidies for mass transit, then they will have a very hard time beating Clinton in 2016...


If Republicans refuse to increase subsidies for mass transit, 98.5% of voters won't notice! and of the ones that notice, 95% won't even care. Don't ever make the mistake of thinking, however significant this issue is to you- or me for that matter- that anyone else gives a crap. Very few people are actually anti transit. Most simply don't care about it, and more than few are not even aware it exists. We are not moving forward until you and your ilk get this concept.


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## Anderson

RyanS said:


> Eventually I think that we're going to have to go to a vehicle miles traveled tax.
> 
> States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
> 
> States without them may have to implement them (or at least annual odometer readings).


I was talking with Charlie about this, and there are some real issues that aren't considered. The biggest problem is likely to be sticker shock, since a VMT at $.10/mile (I'm basing this on tolls on, for example, the PA Turnpike, which are a bit higher...I think they hover in the $.11-.12 range) is going to give a lot of people an annual tab of $1200-1500 all at once. Even if they pay as much or more in gas tax revenue right now, it comes in little drips and is "hidden" in the price of gas.

I see that as being open to several kinds of fraud or gaming:

(1) Odometer tampering would likely become common, and it would be pretty hard to prove that the owner had done it. I'm actually reminded of the time that the odometer on my car jammed for around 2000 miles (the car was 20 years old and had some other issues). Granted, this is more of an issue for older cars, but that's still a lot of cars that are still on the road.

(2) Registration gaming. Let's assume that a state doesn't assess a VMT. Take Delaware, Vermont, Rhode Island, or New Hampshire as an example (since they're all smaller states...and since Delaware in particular loves playing games). If VMTs became common, my instinct would be to start up a company that would nominally own your car with you paying a large fee at the start and then permanently leasing the car from us under an agreement, enabling the car to remain registered in Delaware. There was a version of this sort of game with car rental agencies in the Northwest at one time. To be fair, if the VMT is uniformly assessed (i.e. at the federal level), this could be partly averted, but if states get into the game this seems almost inevitable. There may also be ways around any registration rules that would frustrate this (such as the car remaining a "rental" and the "rental" being nominally renewed repeatedly over short periods). Even if there were a 30-day rental limit, I can see someone being on their 100th 30-day rental.

(2a) A version of this also seems likely with car sharing. From what I've seen of some European car sharing groups, there are models that allow you to "let out" your car when you're not using it and get a share of the rental charges from that. This model also has another advantage in that you could probably "switch out" your car for another one in the system with some ease (likely for a transfer fee of some kind to allow new cars to be acquired). Basically, every 30 days you'd tell the agency whether you wanted to keep your current car or swap it out for one in the system.

(3) Cars going illegitimate. Considering that I suspect there are a lot of judges who won't want to clog up local jails with offenders over vehicle registrations (and considering how many drivers are uninsured), risking a fine of several hundred dollars for driving a vehicle with an expired inspection sticker to avoid a tax bill of several thousand may be a calculated risk (and, because of the attendant safety issues, become a very serious problem).


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## PRR 60

Anderson said:


> RyanS said:
> 
> 
> 
> Eventually I think that we're going to have to go to a vehicle miles traveled tax.
> 
> States with annual inspections can just read the odometer every year at the inspection and charge accordingly.
> 
> States without them may have to implement them (or at least annual odometer readings).
> 
> 
> 
> I was talking with Charlie about this, and there are some real issues that aren't considered. The biggest problem is likely to be sticker shock, since a VMT at $.10/mile (I'm basing this on tolls on, for example, the PA Turnpike, which are a bit higher...I think they hover in the $.11-.12 range) is going to give a lot of people an annual tab of $1200-1500 all at once. Even if they pay as much or more in gas tax revenue right now, it comes in little drips and is "hidden" in the price of gas.
> 
> I see that as being open to several kinds of fraud or gaming:
> 
> (1) Odometer tampering would likely become common, and it would be pretty hard to prove that the owner had done it. I'm actually reminded of the time that the odometer on my car jammed for around 2000 miles (the car was 20 years old and had some other issues). Granted, this is more of an issue for older cars, but that's still a lot of cars that are still on the road.
> 
> (2) Registration gaming. Let's assume that a state doesn't assess a VMT. Take Delaware, Vermont, Rhode Island, or New Hampshire as an example (since they're all smaller states...and since Delaware in particular loves playing games). If VMTs became common, my instinct would be to start up a company that would nominally own your car with you paying a large fee at the start and then permanently leasing the car from us under an agreement, enabling the car to remain registered in Delaware. There was a version of this sort of game with car rental agencies in the Northwest at one time. To be fair, if the VMT is uniformly assessed (i.e. at the federal level), this could be partly averted, but if states get into the game this seems almost inevitable. There may also be ways around any registration rules that would frustrate this (such as the car remaining a "rental" and the "rental" being nominally renewed repeatedly over short periods). Even if there were a 30-day rental limit, I can see someone being on their 100th 30-day rental.
> 
> (2a) A version of this also seems likely with car sharing. From what I've seen of some European car sharing groups, there are models that allow you to "let out" your car when you're not using it and get a share of the rental charges from that. This model also has another advantage in that you could probably "switch out" your car for another one in the system with some ease (likely for a transfer fee of some kind to allow new cars to be acquired). Basically, every 30 days you'd tell the agency whether you wanted to keep your current car or swap it out for one in the system.
> 
> (3) Cars going illegitimate. Considering that I suspect there are a lot of judges who won't want to clog up local jails with offenders over vehicle registrations (and considering how many drivers are uninsured), risking a fine of several hundred dollars for driving a vehicle with an expired inspection sticker to avoid a tax bill of several thousand may be a calculated risk (and, because of the attendant safety issues, become a very serious problem).
Click to expand...

Someone who drives 12,000 miles a year and gets an average of 20mpg pays $108 a year in federal gas tax and more or less the same in state gas tax. A fee of $0.10 per mile - $1200 per year - would be about a 5x increase.


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## afigg

Anderson said:


> I was talking with Charlie about this, and there are some real issues that aren't considered. The biggest problem is likely to be sticker shock, since a VMT at $.10/mile (I'm basing this on tolls on, for example, the PA Turnpike, which are a bit higher...I think they hover in the $.11-.12 range) is going to give a lot of people an annual tab of $1200-1500 all at once. Even if they pay as much or more in gas tax revenue right now, it comes in little drips and is "hidden" in the price of gas.


I would not use the PA Turnpike tolls as a guide to what a VMT rate might be as the revenue from the PA Turnpike is being used to pay for transportation and transit outside of the Turnpike. PA was stuck on raising the gas tax for so long that they kept jacking up the tolls on the PA Turnpike instead.
Your total possible VMT cost numbers are way high. The current federal excise tax is 18.4 cents/gallon on gasoline and 24.4 cents/gallon on diesel. 2.86 cents/gallon of the total goes to the Mass Transit fund.

So, for example, someone who drives their car 12,000 miles a year and gets 25 mpg buys 480 gallons of gas. If the state gas tax works out to 30 cents/gallon, they pay $88.32 in federal excise taxes and $144 to the state. If the average price was $3.50 a gallon, they paid $1680 for the gas. The state and federal gas taxes have become a pretty small proportion of the cost of gas.

There are many questions with how to collect VMT. Regardless of how it is implemented, it will cost money and take years to do. And yes if it is done on a state by state basis with a once or twice a year collection approach, some people will go to great lengths to get around paying the VMT tax.

The simplest solution in the near term is to raise the gas and diesel excise taxes. from what I have read, increasing the federal gas tax by 15 cents and the diesel tax by 20 cents and then indexing the rates to inflation will make the HTF solvent for the rest of the decade at least. It will cost little to implement as the collection system is already there. Double the Mass Transit Fund portion and allocate 1.5 cents/gallon to Amtrak and intercity passenger rail. Easy, right?

Over the next 10 years as cars get more fuel efficient and plug-in hybrids & electric cars become more common, the revenue from the gas tax will erode but a straight gas tax increase could give us 8-10 years to figure out how to replace it.

But even a serious push for a 15 cent a gallon gas tax increase will generate a storm of histrionic statements as to how the increase will destroy the American Way of Life, will bankrupt America, is part of a leftie plot to take away your cars, guns, and beer. They will say this, even as gas prices climb by 20 cents a gallon in a few weeks due to seasonal and market price fluctuations. Congress will probably punt and add money from the general revenue to the HTF to keep it barely solvent for another year.


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## RRUserious

How about a percentage for the first 1000 gallons and then another rate above 1000? Yeh, I can just imagine all the objections. But I don't think you can take away ALL incentive to conserve gas. And the big users are probably getting a lot more benefit from road maintenance.


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## Ryan

How exactly would one go about charging that?


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## Ryan

Anderson said:


> I see that as being open to several kinds of fraud or gaming:
> 
> (1) Odometer tampering would likely become common, and it would be pretty hard to prove that the owner had done it. I'm actually reminded of the time that the odometer on my car jammed for around 2000 miles (the car was 20 years old and had some other issues). Granted, this is more of an issue for older cars, but that's still a lot of cars that are still on the road.


Agreed - it's actually somewhat easier in some newer cars. In my Suburban (and Tahoe before that), the mileage was stored in the instrument cluster, which can be swapped in about 5 minutes by taking off a piece of dash trim and 4 screws. It would be trivial to buy a second cluster and swap that out every 6 months to keep the miles off. I bought a replacement one off of eBay for about $100 that had a transmission temperature gauge installed in it - when I swapped it into the Tahoe, I "magically" had about 15,000 more on the odometer than the truck actually had on it.



> (2) Registration gaming. Let's assume that a state doesn't assess a VMT. Take Delaware, Vermont, Rhode Island, or New Hampshire as an example (since they're all smaller states...and since Delaware in particular loves playing games). If VMTs became common, my instinct would be to start up a company that would nominally own your car with you paying a large fee at the start and then permanently leasing the car from us under an agreement, enabling the car to remain registered in Delaware. There was a version of this sort of game with car rental agencies in the Northwest at one time. To be fair, if the VMT is uniformly assessed (i.e. at the federal level), this could be partly averted, but if states get into the game this seems almost inevitable. There may also be ways around any registration rules that would frustrate this (such as the car remaining a "rental" and the "rental" being nominally renewed repeatedly over short periods). Even if there were a 30-day rental limit, I can see someone being on their 100th 30-day rental.
> 
> (2a) A version of this also seems likely with car sharing. From what I've seen of some European car sharing groups, there are models that allow you to "let out" your car when you're not using it and get a share of the rental charges from that. This model also has another advantage in that you could probably "switch out" your car for another one in the system with some ease (likely for a transfer fee of some kind to allow new cars to be acquired). Basically, every 30 days you'd tell the agency whether you wanted to keep your current car or swap it out for one in the system.
> 
> (3) Cars going illegitimate. Considering that I suspect there are a lot of judges who won't want to clog up local jails with offenders over vehicle registrations (and considering how many drivers are uninsured), risking a fine of several hundred dollars for driving a vehicle with an expired inspection sticker to avoid a tax bill of several thousand may be a calculated risk (and, because of the attendant safety issues, become a very serious problem).


All of these just depend on actual enforcement with meaningful penalties. It's a solvable problem with the right motivation (millions of dollars in tax revenue).
As far as the rates you propose go, I don't see any reason to set them that high. A penny a mile tax would cost the average 15,000 mile car for $150. Reasonable, and would raise a significant amount of money.


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## Anderson

Ok, I'll take the point on the turnpike front...I'd generally seen toll roads as being at about that level. Depending on the state you're looking at, the VMT would still likely fall between $.02 and $.05, though...remember that some states have fairly steep gas taxes. I think CA and NY, with something like a $.50 gas tax, would need well over just that penny (not to mention that it seems likely to me that there would be an attempt to pull in extra revenue in the swap...that isn't even the most original tax-raising trick I've heard of.


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## RRUserious

Toll roads could easily be what politics forces areas into. Trouble is that "needed maintenance and infrastructure" is such a slippery concept. Financial analysts could come up with a dollar figure, and then there could be proposals for how to portion that out. I do think the driving population and the transit population need to *stop *treating this as "take no prisoners" warfare. Because stalemate is where that sort of struggle ends up.. Stalemate doesn't get anything done. Everybody loses. In a sense, we who ride transit and we who drive cars need each other. We need a mental adjustment in which we BOTH get something. Stuck in stalemate means everything goes downhill, and all the satisfaction we get is "we stopped the other guy".


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## Trogdor

One problem I can think of with less invasive ways of taxing VMTs is how you handle transborder traffic.


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## RRUserious

Interesting. US gasoline consumption has decreased to the tune of hundreds of thousands of gallons. But the government says most of it is caused by simply driving less. Can't quite understand if there's really less travel, or if people simply don't drive their cars much anymore. 2004 was not some economic watershed. If anything, the real estate bubble was taxiing for takeoff then. Only 7 percent of savings comes from improved vehicle efficiency. But with laws passed since then, efficiency could expand the cut in gasoline usage.

http://oilprice.com/Energy/Crude-Oil/Why-has-US-Oil-Consumption-Steadily-Fallen-since-2004.html


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## Anderson

There are a number of factors at play here. The big ones, though, are:
(1) Young people don't want to drive in the same way their parents did. I know there are quite a few people my age, myself included, who would rather be on their computer, reading a book, etc. than driving. I know many older folks viewed driving time as "their time" when they legitimately couldn't be bothered; for 20-somethings, they'd rather have that time to chat, text, play games, etc.

(2) Gas prices rose.  If you look at more detailed price charts, there _was_ a watershed in 2004: Up through 2004, the nominal price of a gallon of gas was never over about $2.00 on a national basis. Obviously, places like HI and CA had higher prices, but the national average didn't break $2.00 until early 2005. Since then, it has only gone back below $2.00 once, during the bottom of the 2008 crash, and the recent floor has been around $3.20 or so. If you look at the chart, gas over $2.00 caused use to stagnate. Gas over $3.00 started pushing it down dramatically, though there's also a chance that we've hit a new equilibrium now.

(3) The economy stagnated. Flat wages and so forth have pushed people to do less "discretionary" driving, and this combined with #2 seem to have killed off the "drive to qualify" approach to finding a home.

(4) Cars are getting more efficient.  A chart of new car fuel efficiency says a lot as well; though it is taking a while to trickle through the system (there are lots of older cars on the road, so it'll take a decade or so for averages to catch up), average efficiency is also rising rapidly.

1-3 address the drop in VMT. 4 addresses a compounding change.

Edit: There's a chart down the initial article. Basically, VMT was driving the drop for a while, but fuel efficiency improvements have taken over in the last few years.


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## afigg

RRUserious said:


> Interesting. US gasoline consumption has decreased to the tune of hundreds of thousands of gallons. But the government says most of it is caused by simply driving less. Can't quite understand if there's really less travel, or if people simply don't drive their cars much anymore. 2004 was not some economic watershed. If anything, the real estate bubble was taxiing for takeoff then. Only 7 percent of savings comes from improved vehicle efficiency. But with laws passed since then, efficiency could expand the cut in gasoline usage.


The real estate bubble was approaching its peak in 2004. The peak was in 2005, early 2006, followed by a weakening market which started to go into serious decline in 2007. There is a surprisingly strong match between gas and oil prices (and other commodity prices) increasing from 2005 to 2008 and the weakening and then the bottom falling out in the housing market.
As Anderson wrote, driving is down, especially among the younger set. Total US VMT has been in decline or flat since circa 2004. See the VMT chart in the thread I started on the US DOT consistently overestimating future total VMT growth since 2000.


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## RRUserious

So if vehicle miles traveled is permanently down, how much reduction in building and maintenance results from that? Is the cost of highways in any way related to the amount of their use? And even if personal mileage is down, I'm guessing business are using them more. Online retail has to be putting more heavy trucks on the road for more miles. Should the cost of online shopping factor in more costs for the wear and tear of those trucks? (Non-related, but this does put those octocopters that Amazon wants to loose in an interesting light. The more packages they deliver, the less trucks have to go out)


----------



## Anderson

RRUserious said:


> So if vehicle miles traveled is permanently down, how much reduction in building and maintenance results from that? Is the cost of highways in any way related to the amount of their use? And even if personal mileage is down, I'm guessing business are using them more. Online retail has to be putting more heavy trucks on the road for more miles. Should the cost of online shopping factor in more costs for the wear and tear of those trucks? (Non-related, but this does put those octocopters that Amazon wants to loose in an interesting light. The more packages they deliver, the less trucks have to go out)


I'm not sure, but I'm fairly certain it's not anywhere close to a 1:1 correlation since there's a lot of cyclical replacement you have to carry out due to weather, etc.


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## Green Maned Lion

RRUserious said:


> So if vehicle miles traveled is permanently down, how much reduction in building and maintenance results from that? Is the cost of highways in any way related to the amount of their use? And even if personal mileage is down, I'm guessing business are using them more. Online retail has to be putting more heavy trucks on the road for more miles. Should the cost of online shopping factor in more costs for the wear and tear of those trucks? (Non-related, but this does put those octocopters that Amazon wants to loose in an interesting light. The more packages they deliver, the less trucks have to go out)


The online shopping does not really put more heavy trucks on the road- instead of traveling from distribution centers to stores, they travel from distribution centers to UPS processing centers. It does put more medium duty delivery trucks on the road.


----------



## Anderson

Green Maned Lion said:


> RRUserious said:
> 
> 
> 
> So if vehicle miles traveled is permanently down, how much reduction in building and maintenance results from that? Is the cost of highways in any way related to the amount of their use? And even if personal mileage is down, I'm guessing business are using them more. Online retail has to be putting more heavy trucks on the road for more miles. Should the cost of online shopping factor in more costs for the wear and tear of those trucks? (Non-related, but this does put those octocopters that Amazon wants to loose in an interesting light. The more packages they deliver, the less trucks have to go out)
> 
> 
> 
> The online shopping does not really put more heavy trucks on the road- instead of traveling from distribution centers to stores, they travel from distribution centers to UPS processing centers. It does put more medium duty delivery trucks on the road.
Click to expand...

I don't think we're finished with the business model shifts there, either. I could see a situation a decade hence where Amazon (for example) shifts models somewhat and, to meet the quick shipping demands out there in major cities arranges to hot-shot a lot of stuff between (more numerous) centers by rail and then does short-distance distribution by truck. It's not an unreasonable model to consider, both in light of volume and in light of how they're working to undermine the brick-and-mortar folks. At the moment, "delivery lag" is the only thing Amazon faces vis-à-vis some of the big box folks, and you can get same-day delivery in some places even now.


----------



## RRUserious

Did some calculation today. If there was a 50 percent increase in the federal tax, which would raise tens of billions of new dollars, the personal impact on me would be about 5 cents a day. 5 cents a day. I want to say "Go for it! We need our infrastructure. We can no more lose it than a body can neglect the cardiovascular system."

Yes, I know my 5 cents is a fraction of what some people might pay. But I also know that the landscape of household budgets is target-rich for adjustments. The people with the LEAST flexibility are probably not forking out for $4 gas right now anyway. I make plane trips places and cannot believe the passenger loads. My whole year's gas budget would buy 4 days in Las Vegas over a weekend. And the tax is a tiny corner of that. A very short Asian nearly rammed me (didn't see if it was Dodge he was driving) because his pickup was so oversized for him. And I see junior-sized women driving the same monsters. The "family car". First adjustment might be get an actual car! How many people actually need that size truck every day of their lives? I just know no matter if you TRIPLE the gas tax, I'll still see some of these people wrestling their Belgian-size steeds through parking lots. Their inflexibility is in their minds.

So lets get a serious tax increase. Get those jobs and those projects rejuvenating the circulatory system of our economy.


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## jimhudson

Excellent Post re Taxes and the Infrastructure! Americans Love to complain about Taxes even though we're the Lowest Taxes Developed Nation on Earth! The Anti-Everythings and the NIMBYs and the T-Pub Crowd seem tothink there is a Free Lunch!

If one wants to help turn this Wonderful Land into a Pit let them keep on messing with the Government and before you know it we'll be like a Third World Country! (Let them visit Mexico if they want to see what we can become without Investing in the Common Good!) :help:


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## RRUserious

jimhudson said:


> Excellent Post re Taxes and the Infrastructure! Americans Love to complain about Taxes even though we're the Lowest Taxes Developed Nation on Earth! The Anti-Everythings and the NIMBYs and the T-Pub Crowd seem tothink there is a Free Lunch!
> 
> If one wants to help turn this Wonderful Land into a Pit let them keep on messing with the Government and before you know it we'll be like a Third World Country! (Let them visit Mexico if they want to see what we can become without Investing in the Common Good!) :help:


I think the case of India is also instructive. Anything that is old got shoddy.


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## Anderson

Honestly, all else being equal, I'd rather see a substantial increase in the amount of the interstate highway system that's open to tolling. In a very real way, it's more transparent...but at the same time, you can "get away with it" more easily for a number of reasons. That plus the gas tax being an ultimately unsustainable mechanism with the CAFE reforms (to quote Wikipedia, "On July 29, 2011, President Obama announced an agreement with thirteen large automakers to increase fuel economy to 54.5 miles per gallon for cars and light-duty trucks by model year 2025.").

With this in mind, over the next ten years it seems likely that doubling the gas tax would simply end up at roughly break-even within ten years, and that we'll be back where we are in 6-8 years after you account for inflation. In that context, I don't think the fight for a gas tax hike is necessarily worth it, paticularly if we're going to be stuck re-fighting the same battle in 5-10 years (only to be facing flak for it being "_another _gas tax hike")...and probably then having to fight it out in another 5-10 years. A gas tax increase is only worth fighting for if it's not just a "quick fix".


----------



## RRUserious

Anderson said:


> Honestly, all else being equal, I'd rather see a substantial increase in the amount of the interstate highway system that's open to tolling. In a very real way, it's more transparent...but at the same time, you can "get away with it" more easily for a number of reasons. That plus the gas tax being an ultimately unsustainable mechanism with the CAFE reforms (to quote Wikipedia, "On July 29, 2011, President Obama announced an agreement with thirteen large automakers to increase fuel economy to 54.5 miles per gallon for cars and light-duty trucks by model year 2025.").
> 
> With this in mind, over the next ten years it seems likely that doubling the gas tax would simply end up at roughly break-even within ten years, and that we'll be back where we are in 6-8 years after you account for inflation. In that context, I don't think the fight for a gas tax hike is necessarily worth it, paticularly if we're going to be stuck re-fighting the same battle in 5-10 years (only to be facing flak for it being "_another _gas tax hike")...and probably then having to fight it out in another 5-10 years. A gas tax increase is only worth fighting for if it's not just a "quick fix".


Not sure about all else being equal. I could easily support a multi-source solution. I just think the time is to formulate that solution and get ON with it. We seem to imagine politically in this country we can just fiddle and fiddle and time passage won't matter. But time is WEAR In infrastructure. Sadly, we can't say "OK, lets stop using it till we can get consensus". Every year past is more bridges that are bound to come down. Lose one and now bad traffic problems become horrendous traffic problems. People imagine there's "savings" in putting of tax collection. No there isn't. Every stoppage costs billions. At least on main routes like I-5. Or I35 when the bridge collapsed. What, are people saying "Yeh, billions lost but not a cent from MY pocket!" No, when you pay necessary taxes to maintain it is explicit. When the money goes away through impact on economies, you still lose but it is incalculable. You'd *think *this one matter where the polarized Congress could find some meaningful common ground. This is "pay as you go". Raising user fees of whatever sort are an exception to "sell bonds to China and raise the debt". How moribund are we to temporize on something so essential to an advanced economy?


----------



## Anderson

Charlie and I discussed this, and there _is_ a way around the short-sightedness of politicians. If you can put a promise out of only having to take a "bad" vote once, it can sell, since facing a bad vote now is better than having to face a bad vote every cycle or two.


----------



## PRR 60

RRUserious said:


> Anderson said:
> 
> 
> 
> Honestly, all else being equal, I'd rather see a substantial increase in the amount of the interstate highway system that's open to tolling. In a very real way, it's more transparent...but at the same time, you can "get away with it" more easily for a number of reasons. That plus the gas tax being an ultimately unsustainable mechanism with the CAFE reforms (to quote Wikipedia, "On July 29, 2011, President Obama announced an agreement with thirteen large automakers to increase fuel economy to 54.5 miles per gallon for cars and light-duty trucks by model year 2025.").
> 
> With this in mind, over the next ten years it seems likely that doubling the gas tax would simply end up at roughly break-even within ten years, and that we'll be back where we are in 6-8 years after you account for inflation. In that context, I don't think the fight for a gas tax hike is necessarily worth it, paticularly if we're going to be stuck re-fighting the same battle in 5-10 years (only to be facing flak for it being "_another _gas tax hike")...and probably then having to fight it out in another 5-10 years. A gas tax increase is only worth fighting for if it's not just a "quick fix".
> 
> 
> 
> Not sure about all else being equal. I could easily support a multi-source solution. I just think the time is to formulate that solution and get ON with it. We seem to imagine politically in this country we can just fiddle and fiddle and time passage won't matter. But time is WEAR In infrastructure. Sadly, we can't say "OK, lets stop using it till we can get consensus". Every year past is more bridges that are bound to come down. Lose one and now bad traffic problems become horrendous traffic problems. People imagine there's "savings" in putting of tax collection. No there isn't. Every stoppage costs billions. At least on main routes like I-5. Or I35 when the bridge collapsed. What, are people saying "Yeh, billions lost but not a cent from MY pocket!" No, when you pay necessary taxes to maintain it is explicit. When the money goes away through impact on economies, you still lose but it is incalculable. You'd *think *this one matter where the polarized Congress could find some meaningful common ground. This is "pay as you go". Raising user fees of whatever sort are an exception to "sell bonds to China and raise the debt". How moribund are we to temporize on something so essential to an advanced economy?
Click to expand...

Neither the I-5 or the I-35W bridge collapses had anything to do with deferred maintenance. One was a truck hit and the other was an original design error. I'm not aware of one major bridge failure in the last 20 years or more that was due to a lack of maintenance.


----------



## RRUserious

Both bridges were built according to engineering knowledge at the time, but that's one of the best reasons they needed replacement. The highway engineers knew for years that I35 was badly engineered. And it was wear that finally brought it down after nearly 40 years. With the correct engineering, like the present bridge, and with inspections properly spaced, it could have gone on for indefinite periods of time. Engineers and safety experts have agreed there are tens of THOUSANDS of bridges that are critical in the USA. That's not even debatable. The reason the I35 bridge was still there with its defect was a state administration using frozen taxes as a way to get re-elected. And a lieutenant governor who was doubling as roads commissioner with zero relevant experience. It was a political time bomb. Well, the roads fund is even worse, stuck for decades at a fixed rate and the whole world changes around it. And the least efficient vehicles are a major reason to stalemate change, The owners know they are the bullseye on any program of increasing the trust fund. So I expect loud arguments that everything is just fine. To me its like Morton Thiokol with the O-rings and the Titanic's owners with ice bergs. We all have to screen out the screams of opposition and look at realistic hazards, both to safety and to economic needs.


----------



## PRR 60

Just to clarify, the I-35W failure was the result of a design error in the sizing of a connection gusset plate - part of a bolted connection between multiple structural sections. The error resulted in the connection being grossly under designed and incapable of supporting the code loads at the time of the bridge design (1965). It was not a case of old standards not meeting current requirements. It was an engineering and detailing mistake, plain and simple. The error was missed by the QA/QC program of the original design firm, and by the design reviews conducted by the state and federal DOT. It was an accident waiting to happen, and no one knew the design defect was there. If there was a failure in maintenance, it was that some subtle clues that the plates were undersized were missed. Minor warping and distortions had been seen during routine inspections, but those findings were considered incidental, non-critical and never caused anyone to go back to the original design. No one thought those huge plates were simply too thin.

Actual bridge applied loads caused by typical traffic are normally much lower than the loads the codes require for design, and so-called "safety factors" are applied to provide a margin between code loads and failure loads. That is why the bridge did not collapse sooner. Ironically, it was bridge maintenance that finally overloaded the plate and caused the failure. They were in the process of repairing the bridge deck and had stored some of the equipment and materials on the bridge. The added dead load of those stored items in addition to the normal traffic load, though well below the assumed capability of the bridge, overstressed and failed one of the gusset plates, and caused the bridge collapse.

The design flaw was first discovered in the course of the NTSB post collapse investigation. For structural engineers, the I-35W failure brought back some horrid memories. A failure due to bad connection detailing? See Hyatt Regency Kansas City. That was a failure that forever changed the way structural connections were designed, detailed, and reviewed. Unfortunately, the I-35W design occurred 16 years before the Hyatt failure. The lessons learned and engineering practice changes resulting from the Hyatt failure were not in place in 1965.

The I-5 failure was caused by an oversize vehicle striking a cross member in a through truss. The often-cited inadequacy of the bridge design is that it is "non-load-path redundant," which in English means that the failure of one structural segment will result in the failure of the bridge. Obviously, if a bridge that is non-load-path redundant fails, had that bridge been load-path-redundant, it might not have failed. However, there are untold numbers of bridges and other structures that lack redundancy. Being non-load-path redundant does not mean that bridge, or others like it, is unsafe and should be replaced. Given infrastructure needs, replacing such structures that are otherwise perfectly adequate would seem to me to be a monumental waste of money. For bridges like this, it would seem to be more cost effective to find ways to prevent oversize trucks from hitting truss members.

As for infrastructure funding needs, I am well aware of that. The American Society of Civil Engineers (ASCE) produces the annual Infrastructure Report Card - the report commonly referenced when the need for infrastructure spending is promoted. I know that because I'm a structural engineer, a member of ASCE, and despite being "retired," still actively participate on an ASCE technical committee (on my own dime just because I think it's fun). In a way, I contribute to that report.

I absolutely agree that there is a critical need for infrastructure spending. Are the I-35W or I-5 collapses good examples of that need? In my opinion, no.


----------



## Ryan

Thanks, that's great info.

Do you have some good examples that highlight the need for more infrastructure spending? Looking around at the report I see a lot of numbers and totals, but don't see many specific examples.


----------



## RRUserious

PRR 60 said:


> Just to clarify, the I-35W failure was the result of a design error in the sizing of a connection gusset plate - part of a bolted connection between multiple structural sections. The error resulted in the connection being grossly under designed and incapable of supporting the code loads at the time of the bridge design (1965). It was not a case of old standards not meeting current requirements. It was an engineering and detailing mistake, plain and simple. The error was missed by the QA/QC program of the original design firm, and by the design reviews conducted by the state and federal DOT. It was an accident waiting to happen, and no one knew the design defect was there. If there was a failure in maintenance, it was that some subtle clues that the plates were undersized were missed. Minor warping and distortions had been seen during routine inspections, but those findings were considered incidental, non-critical and never caused anyone to go back to the original design. No one thought those huge plates were simply too thin.
> 
> Actual bridge applied loads caused by typical traffic are normally much lower than the loads the codes require for design, and so-called "safety factors" are applied to provide a margin between code loads and failure loads. That is why the bridge did not collapse sooner. Ironically, it was bridge maintenance that finally overloaded the plate and caused the failure. They were in the process of repairing the bridge deck and had stored some of the equipment and materials on the bridge. The added dead load of those stored items in addition to the normal traffic load, though well below the assumed capability of the bridge, overstressed and failed one of the gusset plates, and caused the bridge collapse.
> 
> The design flaw was first discovered in the course of the NTSB post collapse investigation. For structural engineers, the I-35W failure brought back some horrid memories. A failure due to bad connection detailing? See Hyatt Regency Kansas City. That was a failure that forever changed the way structural connections were designed, detailed, and reviewed. Unfortunately, the I-35W design occurred 16 years before the Hyatt failure. The lessons learned and engineering practice changes resulting from the Hyatt failure were not in place in 1965.
> 
> The I-5 failure was caused by an oversize vehicle striking a cross member in a through truss. The often-cited inadequacy of the bridge design is that it is "non-load-path redundant," which in English means that the failure of one structural segment will result in the failure of the bridge. Obviously, if a bridge that is non-load-path redundant fails, had that bridge been load-path-redundant, it might not have failed. However, there are untold numbers of bridges and other structures that lack redundancy. Being non-load-path redundant does not mean that bridge, or others like it, is unsafe and should be replaced. Given infrastructure needs, replacing such structures that are otherwise perfectly adequate would seem to me to be a monumental waste of money. For bridges like this, it would seem to be more cost effective to find ways to prevent oversize trucks from hitting truss members.
> 
> As for infrastructure funding needs, I am well aware of that. The American Society of Civil Engineers (ASCE) produces the annual Infrastructure Report Card - the report commonly referenced when the need for infrastructure spending is promoted. I know that because I'm a structural engineer, a member of ASCE, and despite being "retired," still actively participate on an ASCE technical committee (on my own dime just because I think it's fun). In a way, I contribute to that report.
> 
> I absolutely agree that there is a critical need for infrastructure spending. Are the I-35W or I-5 collapses good examples of that need? In my opinion, no.


The design flaw wasn't "discovered". MNDOT was aware of it for years. It was reported up the line. The politicians didn't want to hear. The fact is that traffic itself evolved from something the bridge could handle to something that original design wasn't meant for. That's what HAPPENS when decades are involved. That's why constant attention to and replacement of infrastructure is inherent in the fact that usage of it evolves. The people who scowl at the word "tax" will argue and argue that every failure is not a symptom of anything larger. But if you take an interest in any story and read everything published, you come to realize the obvious. Maintaining a modern, evolving economy requires the same kind of ongoing investment as keeping a large and growing business going. Detroit has had to totally RETOOL several times as the market and the technology changed. Otherwise, it would simply fade away. Well, "fade away" is NOT what we want for our whole economy, but we treat it as if it was a house or car we were planning to run into the ground and let the next generation tear it down. But the next generation cannot do any such thing with an economy.

You say "an oversize vehicle" destroyed the I5 bridge. How common was such a vehicle at the time that bridge was opened. I lived in Oregon at the time, so I saw the vehicles on the highway. Oversize is another product of evolution. Washington was, again, whistling in the dark, hoping its luck would hold out as it stalled on re-engineering for the traffic that uses highways now.

And that is another reason an adequate and *growing *trust fund is indispensable. We should have a fixed percentage of the economy in infrastructure renewal. Any business knows that it only has a future if it replaces capital on a constant basis.


----------



## PRR 60

RRUserious said:


> PRR 60 said:
> 
> 
> 
> Just to clarify, the I-35W failure was the result of a design error in the sizing of a connection gusset plate - part of a bolted connection between multiple structural sections. The error resulted in the connection being grossly under designed and incapable of supporting the code loads at the time of the bridge design (1965). It was not a case of old standards not meeting current requirements. It was an engineering and detailing mistake, plain and simple. The error was missed by the QA/QC program of the original design firm, and by the design reviews conducted by the state and federal DOT. It was an accident waiting to happen, and no one knew the design defect was there. If there was a failure in maintenance, it was that some subtle clues that the plates were undersized were missed. Minor warping and distortions had been seen during routine inspections, but those findings were considered incidental, non-critical and never caused anyone to go back to the original design. No one thought those huge plates were simply too thin.
> 
> Actual bridge applied loads caused by typical traffic are normally much lower than the loads the codes require for design, and so-called "safety factors" are applied to provide a margin between code loads and failure loads. That is why the bridge did not collapse sooner. Ironically, it was bridge maintenance that finally overloaded the plate and caused the failure. They were in the process of repairing the bridge deck and had stored some of the equipment and materials on the bridge. The added dead load of those stored items in addition to the normal traffic load, though well below the assumed capability of the bridge, overstressed and failed one of the gusset plates, and caused the bridge collapse.
> 
> The design flaw was first discovered in the course of the NTSB post collapse investigation. For structural engineers, the I-35W failure brought back some horrid memories. A failure due to bad connection detailing? See Hyatt Regency Kansas City. That was a failure that forever changed the way structural connections were designed, detailed, and reviewed. Unfortunately, the I-35W design occurred 16 years before the Hyatt failure. The lessons learned and engineering practice changes resulting from the Hyatt failure were not in place in 1965.
> 
> The I-5 failure was caused by an oversize vehicle striking a cross member in a through truss. The often-cited inadequacy of the bridge design is that it is "non-load-path redundant," which in English means that the failure of one structural segment will result in the failure of the bridge. Obviously, if a bridge that is non-load-path redundant fails, had that bridge been load-path-redundant, it might not have failed. However, there are untold numbers of bridges and other structures that lack redundancy. Being non-load-path redundant does not mean that bridge, or others like it, is unsafe and should be replaced. Given infrastructure needs, replacing such structures that are otherwise perfectly adequate would seem to me to be a monumental waste of money. For bridges like this, it would seem to be more cost effective to find ways to prevent oversize trucks from hitting truss members.
> 
> As for infrastructure funding needs, I am well aware of that. The American Society of Civil Engineers (ASCE) produces the annual Infrastructure Report Card - the report commonly referenced when the need for infrastructure spending is promoted. I know that because I'm a structural engineer, a member of ASCE, and despite being "retired," still actively participate on an ASCE technical committee (on my own dime just because I think it's fun). In a way, I contribute to that report.
> 
> I absolutely agree that there is a critical need for infrastructure spending. Are the I-35W or I-5 collapses good examples of that need? In my opinion, no.
> 
> 
> 
> The design flaw wasn't "discovered". MNDOT was aware of it for years. It was reported up the line. The politicians didn't want to hear. The fact is that traffic itself evolved from something the bridge could handle to something that original design wasn't meant for. That's what HAPPENS when decades are involved. That's why constant attention to and replacement of infrastructure is inherent in the fact that usage of it evolves. The people who scowl at the word "tax" will argue and argue that every failure is not a symptom of anything larger. But if you take an interest in any story and read everything published, you come to realize the obvious. Maintaining a modern, evolving economy requires the same kind of ongoing investment as keeping a large and growing business going. Detroit has had to totally RETOOL several times as the market and the technology changed. Otherwise, it would simply fade away. Well, "fade away" is NOT what we want for our whole economy, but we treat it as if it was a house or car we were planning to run into the ground and let the next generation tear it down. But the next generation cannot do any such thing with an economy.
> You say "an oversize vehicle" destroyed the I5 bridge. How common was such a vehicle at the time that bridge was opened. I lived in Oregon at the time, so I saw the vehicles on the highway.  Oversize is another product of evolution. Washington was, again, whistling in the dark, hoping its luck would hold out as it stalled on re-engineering for the traffic that uses highways now.
> 
> And that is another reason an adequate and *growing *trust fund is indispensable. We should have a fixed percentage of the economy in infrastructure renewal. Any business knows that it only has a future if it replaces capital on a constant basis.
Click to expand...

OK. You win.


----------



## Alice

Getting back to the gas tax, I'm sure some of you will have some comments on how we do it in California:

California BOE approves lowering excise tax rate on gasoline by 3.5 cents


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## Anderson

So, how _is_ the rate calculated in CA?


----------



## Paulus

Anderson said:


> So, how _is_ the rate calculated in CA?


2.25% sales tax plus an excise tax which represents the level of a 4.25% sales tax rate in 2010 plus some pre-existing excise taxes (if I've got it right). Restrictions on raising taxes and where fuel taxes went led to the weirdness as part of a budget swap.


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## Anderson

That's interesting, because $.36 comes out to around 10% or so of the price of gas in CA.


----------



## Alice

Anderson said:


> So, how _is_ the rate calculated in CA?


I think the article I linked gives a pretty good summary description. What is interesting is they are lowering the excise tax, which is the part that is dedicated to highways and transit. Sales tax traditionally goes to local governments but currently most gets snatched for the general fund.


----------



## cirdan

RRUserious said:


> So if vehicle miles traveled is permanently down, how much reduction in building and maintenance results from that? Is the cost of highways in any way related to the amount of their use?


One of the problems is that highway projects are not really driven by use, but by political considerations, and also by a backlog. Many highways being built today were actually planned 20 years ago or more. I don't think a blimp in the statistics is going to cause any of these projects to be reconsidered. Things are going to have to get much more drastic until that begins.


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## Andrew

Well, hopefully Obama's transportation proposal that he will announce today gets passed!


----------



## afigg

Andrew said:


> Well, hopefully Obama's transportation proposal that he will announce today gets passed!


However, his proposal is to pay for the shortfall in the Highway Trust Fund and increased transportation spending with a one time boost in $150 billion business taxes from tax reform. The details are sketchy on what the boost would come from. He is not proposing to increase the gasoline tax, but instead punting dealing with the ever growing shortfall in the HTF as his administration has done for the past 5 years.
I expect that is because his political advisors have long concluded that proposing to increase the gas tax would create an uproar on the right, hurt the Dems at the polls, and the Republican controlled House would never go for it. So he is advocating a 4 year gimmicky fix to kick solving the federal transportation funding problem to his successor and whoever controls Congress in 2018. His advisors may be correct, so a one time fix to postpone the funding shortfall until calmer times return to Capitol Hill may be all he can propose.


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## jis

This is known as "kicking the can down the road". We have been doing this in New Jersey with the TTF too irrespective of which party the Governor is from and which party holds majority in the legislature, and what promises were made by the gubernatorial candidates to get elected


----------



## neroden

cirdan said:


> That would be one approach, but it might disprportioantely hurt people in rural areas who
> 
> 1) need to driver more and further all the time to get to work, shop etc
> 
> 2) don't have ready access to alternatives such as public transportation
> 
> 3) benefit disproprtionately little from that revenue as most of the cash goes into big highway projects within or between big cities. Very little gets spent on fixing up little rural roads.
> 
> So effectively those who would contribute the most would get back the least.


Actually, a stupendously disproportionately high amount of road money goes to rural roads, compared to the amount they're used. This does include the roads "between" cities, of course, but rural drivers do use those. It would indeed cost rural drivers more, but they're getting more.

The gigantic super-expensive urban elevated/depressed expressway projects do skew the numbers the other way. But most people who've studied it say we shouldn't have those at all; most of Europe has zero urban expressways, with the expressways stopping at the city borders. Knock 'em down; they were a bad idea and are unaffordable.

If our politics go the way they usually do, we will come up with some way to continue subsidizing rural drivers at the expense of cities. Which I guess is OK; someone needs to live on the farms.

The


----------



## neroden

Anderson said:


> I don't think we're finished with the business model shifts there, either. I could see a situation a decade hence where Amazon (for example) shifts models somewhat and, to meet the quick shipping demands out there in major cities arranges to hot-shot a lot of stuff between (more numerous) centers by rail and then does short-distance distribution by truck.


UPS already does its main deliveries by rail. But it doesn't have enough transload centers. FedEx Ground -- also mostly by rail. The US Postal Service quite stupidly stopped shipping packages by rail some time back just when the private parcel carriers were shifting to rail; it may have to reverse this eventually. I also have to wonder when Amazon will try to cut out the UPS "middleman", and when UPS will try to get vertical integration with the railroads it uses... businesses like these always tend toward monopoly.
I wouldn't be at all surprised to see Amazon setting up direct rail loading at its warehouses and then trying to get trains to run hotter than the standard intermodal. Perhaps at passenger speeds.


----------



## afigg

jis said:


> This is known as "kicking the can down the road". We have been doing this in New Jersey with the TTF too irrespective of which party the Governor is from and which party holds majority in the legislature, and what promises were made by the gubernatorial candidates to get elected


This is what democracies generally do or at least in the US. Wait until the problem is so severe it has to be addressed and costs more to fix than deal with it ahead of time. NJ will probably fix the state transportation fund when it runs out of money and there will be no new shiny projects the politicians can take credit for. VA, MD, and even PA all fixed their transportation funding crisis in 2013, mainly because they had to or else no new shiny projects.
NJ will eventually do so as well, although it clearly won't happen so long as Christie has even the slightest hope of a presidential nomination or until there is a new Governor in NJ.


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## Anderson

neroden said:


> Anderson said:
> 
> 
> 
> I don't think we're finished with the business model shifts there, either. I could see a situation a decade hence where Amazon (for example) shifts models somewhat and, to meet the quick shipping demands out there in major cities arranges to hot-shot a lot of stuff between (more numerous) centers by rail and then does short-distance distribution by truck.
> 
> 
> 
> UPS already does its main deliveries by rail. But it doesn't have enough transload centers. FedEx Ground -- also mostly by rail. The US Postal Service quite stupidly stopped shipping packages by rail some time back just when the private parcel carriers were shifting to rail; it may have to reverse this eventually. I also have to wonder when Amazon will try to cut out the UPS "middleman", and when UPS will try to get vertical integration with the railroads it uses... businesses like these always tend toward monopoly.
> I wouldn't be at all surprised to see Amazon setting up direct rail loading at its warehouses and then trying to get trains to run hotter than the standard intermodal. Perhaps at passenger speeds.
Click to expand...

Amazon will cut out UPS when the relative cost of using them exceeds their value as a whipping boy when things go wrong. As things stand right now, the Christmas fiasco was the fault of UPS, not Amazon. As soon as they drop the middleman, they own anything that goes wrong in transit.


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## RRUserious

The primary spokesmen for business in politics fail to point out that capital stock, by its nature, wears out and in business is expensed over the lifetime of the capital. Which, however, they don't seem to agree should happen with transportation infrastructure. You hear so much about making government "businesslike". But with infrastructure getting ancient, no ideologue is on this issue. If Washington spoke with one voice on this,, the people might get it. Being anti-Washington doesn't mean being against the road you ride to work.


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## cirdan

Anderson said:


> Amazon will cut out UPS when the relative cost of using them exceeds their value as a whipping boy when things go wrong. As things stand right now, the Christmas fiasco was the fault of UPS, not Amazon. As soon as they drop the middleman, they own anything that goes wrong in transit.


Amazon is a trading company, not a shipping company. There's more to becoming a shipping company than buying a fleet of trucks and hiring the drivers. If it was that easy, UPS, Fedex and co would have gone out of business years ago with startups undermining their prices. UPS for example is worth much more than just its bank accounts and value of inventory. An organisation like that has worth precisely because you can't emulate it very easily.


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## cirdan

RRUserious said:


> The primary spokesmen for business in politics fail to point out that capital stock, by its nature, wears out and in business is expensed over the lifetime of the capital. Which, however, they don't seem to agree should happen with transportation infrastructure. You hear so much about making government "businesslike". But with infrastructure getting ancient, no ideologue is on this issue. If Washington spoke with one voice on this,, the people might get it. Being anti-Washington doesn't mean being against the road you ride to work.


Many businesses sadly do have a policy of running their existing infrastructure into the ground while extracting as much money as possible, and then using that money to find new businesses they can run into the ground. So when people start saying, government should be run like a business, we should start asking "what kind of business".


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## Green Maned Lion

Government should be run the way a business should be. I can make money today in huge quantity, that's no trick. Just screw everybody half blind and then poke the other eye out. Running a business well for the long haul is the trick. And your right, reinvestment is critical. I make a good profit out of my business- I could live pretty well if I were stupid. But almost all of that profit is reinvested in the business, expanding inventory, breadth of line, market penetration, and so on. Ill cash out when I sell it to one of those idiots who will run it into the ground.


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## RRUserious

cirdan said:


> RRUserious said:
> 
> 
> 
> The primary spokesmen for business in politics fail to point out that capital stock, by its nature, wears out and in business is expensed over the lifetime of the capital. Which, however, they don't seem to agree should happen with transportation infrastructure. You hear so much about making government "businesslike". But with infrastructure getting ancient, no ideologue is on this issue. If Washington spoke with one voice on this,, the people might get it. Being anti-Washington doesn't mean being against the road you ride to work.
> 
> 
> 
> Many businesses sadly do have a policy of running their existing infrastructure into the ground while extracting as much money as possible, and then using that money to find new businesses they can run into the ground. So when people start saying, government should be run like a business, we should start asking "what kind of business".
Click to expand...

What can I say in response but "indeed!" Could be the type of business is exactly what owns most office holders lately.


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## beautifulplanet

Sorry in case this is off-topic:

Does Amtrak pay gas tax on the Diesel used in its equipment?

It seems like US commercial aviation just pays a reduced rate in gas tax. What about Amtrak?

On the following web page, it seems to be indicated that there are no exceptions, then again, it says aviation is excempt:

"Is anyone exempt from the fuel tax?

The IRS defines taxable events for motor fuel, which are specific to the types of fuel. For the majority of motor fuel used in the United States (gasoline and diesel) the only exemptions would be for licensed exporters who are delivering product out of the US, and for dyed diesel and dyed kerosene out of terminals approved by the IRS for such activity."

see here: http://www.fhwa.dot.gov/motorfuel/faqs.htm#q5

"Is jet fuel and aviation gas subject to the fuel tax?

Jet fuel and aviation gas are similar to kerosene and gasoline. These fuels are not only subject to any applicable taxes when used in aircraft, but would also be subject to the fuel taxes when use in vehicles operating on the highway. The amount of tax would be based on the use, not the type of fuel that is used."

http://www.fhwa.dot.gov/motorfuel/faqs.htm#q12

Anyone happen to know what the exact situation is like in the United States?

It is known for some other countries that the railroad companies have to pay the complete fuel tax there (but aviation doesn't)...


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## PRR 60

Amtrak is exempt from fuel taxes. Aviation fuel purchased by airlines is subject to a 4.3 cent per gallon federal tax.


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## jis

PRR 60 said:


> Amtrak is exempt from fuel taxes. Aviation fuel purchased by airlines is subject to a 4.3 cent per gallon federal tax.


Does the aviation fuel tax go into a trust fund of some sort or does it go into general funds?


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## Ryan

They are today, yes.

I recall reading Alan say at some point that Amtrak (or their predecessor) having to pay fuel tax in the past - fuel tax that the railroad got no benefit from (in essence they were subsidizing their competition).

Anyone have any details on that?


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## AlanB

RyanS said:


> They are today, yes.
> 
> I recall reading Alan say at some point that Amtrak (or their predecessor) having to pay fuel tax in the past - fuel tax that the railroad got no benefit from (in essence they were subsidizing their competition).
> 
> Anyone have any details on that?


To my knowledge Amtrak never had to pay the tax. But all freight & prior pax RR's paid a 4.4 cents fuel tax on diesel fuel for many years. Of that, 4.3 cents per gallon went into the Highway Trust Fund up until the Taxpayer Relief Act of 1997 redirected it into the General Fund. There was a move afoot by the RR's to get that tax dropped a few years ago, or at least put into a fund that paid for RR improvements. I'm not sure if they actually got the tax repealed or not; but I do know that it didn't go into a RR trust fund as to my knowledge, none exists.


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## jis

It is very educational to see the taxes that are paid for air transport and taxes that are added on to an airline ticket:

http://www.airlines.org/Pages/Government-Imposed-Taxes-on-Air-Transportation.aspx


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## PRR 60

jis said:


> PRR 60 said:
> 
> 
> 
> Amtrak is exempt from fuel taxes. Aviation fuel purchased by airlines is subject to a 4.3 cent per gallon federal tax.
> 
> 
> 
> Does the aviation fuel tax go into a trust fund of some sort or does it go into general funds?
Click to expand...

The aviation fuel tax goes into the Airport and Airway Trust Fund. The AATF is also funded from ticket taxes and fees.

There is also an additional 1/10 cent per gallon aviation fuel tax that goes to the Leaking Underground Storage Tank fund (with the provocative acronym of LUST).


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## PRR 60

AlanB said:


> RyanS said:
> 
> 
> 
> They are today, yes.
> 
> I recall reading Alan say at some point that Amtrak (or their predecessor) having to pay fuel tax in the past - fuel tax that the railroad got no benefit from (in essence they were subsidizing their competition).
> 
> Anyone have any details on that?
> 
> 
> 
> To my knowledge Amtrak never had to pay the tax. But all freight & prior pax RR's paid a 4.4 cents fuel tax on diesel fuel for many years. Of that, 4.3 cents per gallon went into the Highway Trust Fund up until the Taxpayer Relief Act of 1997 redirected it into the General Fund. There was a move afoot by the RR's to get that tax dropped a few years ago, or at least put into a fund that paid for RR improvements. I'm not sure if they actually got the tax repealed or not; but I do know that it didn't go into a RR trust fund as to my knowledge, none exists.
Click to expand...

The 4.3 cent per gallon federal tax on fuel used by railroads and inland waterway transportation was phased out under the provisions of the American Jobs Creation Act of 2004.


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## Anderson

PRR 60 said:


> jis said:
> 
> 
> 
> 
> 
> PRR 60 said:
> 
> 
> 
> Amtrak is exempt from fuel taxes. Aviation fuel purchased by airlines is subject to a 4.3 cent per gallon federal tax.
> 
> 
> 
> Does the aviation fuel tax go into a trust fund of some sort or does it go into general funds?
> 
> Click to expand...
> 
> The aviation fuel tax goes into the Airport and Airway Trust Fund. The AATF is also funded from ticket taxes and fees.
> 
> There is also an additional 1/10 cent per gallon aviation fuel tax that goes to the Leaking Underground Storage Tank fund (with the provocative acronym of LUST).
Click to expand...

I wonder...if that were redirected to mass transit, could LUST fund the ****?


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