A venture capitalist recently attracted a lot of blowback on social media after he whined about having to pay a lot of tolls to the “government” during an Uber ride from New York to Philadelphia. Commenters pointed out that (1) he could have taken a train instead of a $400 Uber, and (2) it was Uber, not the government, that was ripping him off with unnecessary fees. But as much as I enjoy mocking a whiny rich man when he complains about his nonexistent problems, I think the question of whether toll roads are “fair” is a difficult one to answer.
If we take for granted that (1) climate change is real, (2) having people use public transit, walk, and take bicycles to commute is better than having them drive cars, then disincentivizing road use via tolls can appear to make sense. As is the standard case in the U.S., making most roads free and the public transit cost money is a policy choice, and a government that chooses not to levy tolls on road use is choosing to give people something for free that we don’t actually want them to be incentivized to use. Instead of using taxes to subsidize free roads, while at the same time charging people to use public transit, the government can charge for the roads and use taxes to subsidize free public transit.
Some cities around the world have introduced congestion pricing schemes that try to alleviate the problem of excess traffic in downtown areas by charging people who choose to drive on particular roads. If you want to drive in central London during the day, for instance, you’ll be charged £15. The charge has raised a great deal of money for the city for the improvement of transit infrastructure and has reduced car use. Environmentalists and those who want to see reduced car use and increased public transit use can call the policy a win: it redistributes money from drivers to the public sector, and makes sure that the externalities associated with driving are paid for. Herbie Huff of UCLA’s Institute for Transportation has said that the solution to Los Angeles’ neverending traffic nightmare is straightforward: “tolls—lots of them.”
But there’s another consideration: inequality. A venture capitalist may grumble at paying a fortune in tolls, but they can afford to pay it. For plenty of others who do not have endless piles of money to set on fire, heavy tolls might preclude a trip altogether. We can say that the guy who whined about his Uber should have taken the train, but a person on a strict budget will be forced to take the train. Now, maybe we don’t care very much about that, since we want to force people to take the train. But the fact is that tolls are a “market solution” to the problems of congestion and pollution. They put user fees on a public good.
If tolls affect behavior, they do so by targeting the portion of the population that is making transit decisions based on small differences in the amount of money that each choice costs, and the group that is thinking hard about small numbers of dollars is more likely to have only small numbers of dollars. If traffic falls 30 percent after congestion pricing is increased, we have to ask, Who makes up the 30 percent? Is it the people who were previously barely able to afford to keep their cars on the road and now have to take the bus?
The more money you have, the more liberated you are from having to let small cost differences determine what you choose to do. Socialists frequently advocate that the public goods and services people use every day should be “free at the point of use,” rather than paid for with user fees, because every cost that we impose (unless we add a cumbersome system of means testing) will be hardest to pay for those who are the poorest. There is something a little dystopian about a country where as you move from place to place you are automatically being charged money. Economists might like tolls and congestion pricing, just as they like carbon taxes, because they seem like an efficient solution that gets everyone to pay for what they use. But I don’t like the sound of a world where someone has to think “I need to go and pick my kids up from school, but I can’t afford the ten dollars to cross into downtown.”
Yet we should remember that just because we don’t have tolls, that doesn’t mean we have an equitable transit system. Planning website Strong Towns rejects the idea “that congestion pricing somehow disproportionately impacts the poor any more than the typical taxes that fund our roads” and asks “Are we supposed to, as a matter of public policy, avoid using rational market forces to balance supply and demand because of concern for the poor? How is using a gas tax, license and registration fees, debt, sales tax and general revenue to fund an overbuilt, insolvent and failing transportation system any more equitable for the poor?” While research suggests, predictably, that when tolls are introduced “the average poor household will pay a greater percentage of its annual income on tolls than will the average non-poor household,” UCLA’s Huff says, “Tolls may disproportionately burden the poor, but so do sales taxes, gas taxes and every other way we pay for roads.” Huff points out that easing congestion helps poorer drivers as well (at least those who can still afford to pay the tolls).
But I am not sure that “gas taxes are regressive, therefore introducing new regressive taxes is also unobjectionable” works as an argument. For one thing, nobody is proposing replacing gas taxes with tolls, and while reduced time sitting in traffic might reduce one’s gas taxes, if a new charge is more than the savings, new tolls do hurt the poor financially more than they help them. It may well be the case that a lot of ways we fund public services are regressive, but that point might serve as an argument against those other charges rather than a mitigation of (or justification for) the harm of new regressive measures. (Personally I’d like to see much heavier taxation of big luxury trucks, which have huge externalities in the form of destroying the planet and mashing pedestrians.) There are ways to achieve the same result (reduced driving) without hitting the people hardest who have the least money, such as road space rationing.
Personally, I am wary of using “financial disincentives” to achieve desired social results in a country with extreme inequality. I hate car culture and love public transit, but think we should lean toward “carrots” rather than “sticks”—building great public transit networks free at point of use, funded through progressive taxation rather than regressive user fees. Solutions that focus on “attaching a price to X” might make more sense in a society where everyone was prosperous. In such a society, we could jack up gas taxes to try to make taking public transit seem a much better deal, but without actually hurting many people. In our own society, where so many people can barely afford their expenses, buses are slow and often don’t take you where you want to go, and where almost everyone in every economic stratum still depends on cars to get around, fees and tolls seem to me an inequitable last resort. We should focus on measures that fund what we need by taking wealth from those who have too much of it rather than from everyone equally, and while we should try to avoid infrastructure projects that further entrench car dependence, we need to keep in mind the goal of a decommodified life where the things we need are available freely to all.
