On the road again: how tax policy drives transportation choice

Virginia Tax Review, Wntr, 2005 by Roberta F. Mann

2. Other Solutions to Congestion

Besides building roads, communities can attempt to improve the efficiency of their road systems by timing traffic lights, shifting work hours and locations, metering highway access, improving emergency response times, and creating high occupancy vehicle (HOV) lanes. (52) These solutions can co-exist with automobile dependence. HOV lanes would require carpooling, which as noted above only was used for 10% of trips to work in 2002. One commentator suggests that resistance to carpooling can be explained by a dominant "solo-commuting norm." (53) One study found that three out of 100 vehicles would have to become two-person carpools to handle one year's transportation growth. (54)

3. Parking

At the end of every car trip, the driver has to have a place to put the car. Thus, the need for parking dominates urban architecture. (55) "Automobile-oriented cities devote 25 to 30% of their land to streets and parking, compared with less than 10% in traditional walking cities. This increase in per capita pavement imposes economic, environmental, social, and aesthetic costs on society." (56)

C. Economics

The automobile is a costly form of transportation, both for the driver and for innocent bystanders. In 2003, consumers spent $426.1 billion to purchase or lease cars and trucks. (57) As reported by the 2002 Consumer Expenditure Survey, transportation expenses consumed 19% of total consumer expenditures, 95% of which was spent on automobiles and light trucks. (58) Consumers can be expected to consider direct costs in making transportation decisions. For the automobile, such direct costs include purchase price of the car, likely repair costs and resale value over time, expected fuel costs, insurance, taxes, and registration. (59) Automobile manufacture uses large amounts of natural resources, the cost of which presumably is reflected in the price of the vehicle. The production of a typical car requires the energy equivalent of 400 gallons of oil. (60) Motor vehicle production uses 27% of U.S. aluminum, 35% of iron, 15% of steel, 80% of lead, and 62% of rubber consumption. (61) In addition to its direct costs, automobile use has a myriad of indirect costs, such as economic disruptions due to the significance of the world oil market, pollution, climate change, and defense spending. Automobile use carries significant social costs, as well. The social costs include accident injuries, the isolation of the elderly and disabled, and obesity. As the market does not reflect these indirect costs, consumers are unlikely to consider the environmental or social costs of private vehicle use. (62) One study indicates that private motor vehicle travel is significantly underpriced compared with total marginal costs. (63) The study concludes that vehicle owners actually face an incentive to maximize their driving in order to get their money's worth from their large fixed investments. (64)

1. Fuel

The average American family spent $1279 on gasoline and oil in 2001. (65) In total, over $173 billion was spent on gasoline and oil for user-operated transportation. (66) Light duty vehicles used in the United States account for 10% of worldwide petroleum use. (67) In 2001, U.S. cars and light trucks used over 126 billion gallons of fuel. (68) As more consumers turn to light trucks rather than automobiles, the average fuel economy for light duty vehicles is trending lower, from a peak of 25.9 miles per gallon in 1987 to twenty-four miles per gallon in 2000. (69)