of the concept that the provision of highway facilities serves three major interests finding a parallel in three principal sources of highway revenue:
- The interest of access to land and improvements, a service indispensable to personal, family, and business activity (taxes on land).
- The public interest or general welfare, represented by the use of roads in such public activities as national defense, police and fire protection, access to schools, and conservation of natural resources (appropriations from general funds).
- The interest of the motor-vehicle user in providing facilities upon which the private automobile may be used in recreational, social, and personal business activities and the commercial vehicle may be operated in gainful pursuits (motor-vehicle user taxes).
The fact that the owners and occupants of adjacent and nearby property received special benefits from highway improvements had long been recognized by the common practice of imposing special assessments for such improvement. Benefits to property throughout a given area were recognized in taxes upon property in general, and the general property tax was also recognized as representing community benefits as well as those directly assignable to the land.
The fact that the benefit principle was firmly imbedded in the earlier period of highway financing probably paved the way for the adoption of motor-vehicle registration fees and gasoline taxes as means of taxing the motor-vehicle owner for benefits received. Thus, the gasoline tax, during the period when it was being eagerly adopted by State after State, was commonly described as a “metered tax,” and one State, New Hampshire, continued to call its gasoline tax the “road toll.”
The further fact that the rapidly developing use of motor vehicles was bringing about the necessity for greater and greater highway expenditures was also a very potent factor in popularizing the imposition of user taxes. Thus the concepts that underlie the later investigations of the highway tax problem had a natural evolution in the history of highway development.
After WW II it was evident that greater highway expenditures would be needed to cope with the volume of traffic. Highway taxation had to be determined on an equitable assignment of tax responsibility among beneficiary groups in proportion to the benefits received.
The central problem of highway taxation was one of determining an equitable assignment of tax responsibility among various beneficiary groups in proportion to the benefits received or highway costs occasioned by each of these groups. The problem divided itself into two parts: (1) The allocation of the highway tax burden among the major classes of beneficiaries of highway expenditures and (2) once the equitable portion assignable to motor-vehicle users was determined, the allocation of the motor-vehicle user share among vehicles of different sizes, weights, and classes of use. A number of methods with supporting concepts were devised for making these determinations and were used by many States for revising their tax schedules.
Vehicle Registrations and Fuel Consumption
Largely because of the effects of motor fuel rationing, motor vehicle registrations declined only 13 percent during World War II, compared with decreases of 37 and 33 percent, respectively, in travel and fuel consumption. Until the 1940’s the rate of growth in fuel consumption per vehicle closely paralleled the rate in total fuel consumption. But after 1946, the rate per vehicle rose more slowly than that of total consumption, because of the growing density of motor vehicle ownership. While ownership of more than one car increases the total miles of driving, the increase is not proportionate to the number of vehicles owned. Thus, a household with one car averaging 12,000 miles of driving annually does not double that mileage by buying a second car but may increase it to perhaps 15,000 or 18,000 miles. Fuel consumption in 1946 averaged about 746 gallons per vehicle per year.[1]
New Directions in Borrowing
The venerable custom of borrowing money and paying interest on it has its motivation in the simple economic fact that money in hand always has more value than an equal amount in prospect. The existence of a net advantage to be derived from the use of funds now rather than in the future is the criterion justifying public borrowing.
- ↑ Federal Highway Administration, Press Release, Table MF-221 (U.S. Dept. of Transportation, Washington, D.C.) Jan. 13, 1976
