Many costs are, as you note, very hard to measure, with the result that interested parties run the costs up or down to lend credibility to an ideological outcome.  Hence any taxation scheme based on such costs will be endlessly controversial.

You bear down on external costs but I see no reference to external benefits, which are at least as wide-ranging and as difficult to measure as the costs.  And the ideologues will weigh in on this aspect as well.

I am not optimistic that analyses of the type you perform, even when internally consistent and carefully done, will produce a better state of affairs than the brute political process that is currently used.  The fact that demand for private auto transport is so inelastic suggests that it has very great benefits for users.  Most critics of auto use are disinclined to take these into account.  They are also most unwilling to grant that auto use has any external benefits at all.


Nigel Replies,

Thanks for your comments that I mostly agree with, hence why I argue to not tax transport use, except for taxes that apply at an equal rate to all other products and services.

In the UK one of the major problems we have is congestion - this is due the state ownership and control of roads subsidising and consequently setting a price lower than the true economic price. If you read part 4 of this web site you will find the solution which I propose. Very briefly. The money saved by the Government not subsidising roads gets returned to citizens. Therefore if citizens need to drive they are no worse off. Those citizens who have a choice can choose whether to spend money on accessing their needs by road, by public transport or locally by walking - the choice will be theirs - not what a Government subject to the influence of pressure groups may decide. Interestingly this argument has small but growing support on all sides of the transport debate - including "Reforming Road Taxation" by Professor David Newberry published by the Automobile Association and "The Great Transport Subsidy" by Bradbury and Nalty published by the former Railway Development Society.

Referring to your arguments about the benefits of road use. I agree there are many benefits, but I don't expect these to be subsidised, any more than I expect provision of energy, water or any other product I benefit from. I expect to pay for my purchase of any product or service I benefit from at a proper economic price.