Stunningly, some Colorado Democrats have finally found a tax they don’t like. After Republican State Senator Ray Scott suggested he might propose a bicycle tax similar to one Oregon just imposed, Democratic Senator Andy Kerr slammed the idea as an “anti-business, anti-freedom policy,” Colorado Politics reports. If only Colorado Democrats were always so skeptical of taking people’s money.
And yet the case for taxing bicycles seems compelling, at least on the surface. Bike lanes and paths cost money, and a bike tax would establish a dedicated fund, paid by users, for building and repairing bike-related infrastructure. What’s not to like? Colorado’s two biggest newspapers, the Denver Post and the Colorado Springs Gazette, agree it’s a proposal worth considering.
If you think about how a bike tax actually would work, though, the case for it falls apart. If the idea is to make users pay, a bicycle tax is a horrible way to accomplish that.
Begin with some details: The Oregon tax of $15 applies to “new bicycles with a wheel diameter of 26 inches or more and a retail price of $200 or more,” reports the Oregonian. A goal is to exclude kids’ bikes and take it easy on the poor.
A bike tax would be nothing like a gas tax in terms of making users pay. Almost all automobile drivers pay the gas tax, and the total amount they pay relates closely with their use of the roads. (Coloradans pay 22 cents in state tax per gallon of gas, plus another 18.4 cents in federal tax.) People with lighter vehicles and better gas mileage pay less tax per mile, but their vehicles do less damage to the roadways.
By contrast, a bike rider’s bike tax would have little or no relationship to how much the rider used bike paths and lanes. Someone who biked every day to work with a pricey, Tour de France-worthy bicycle purchased in Cheyenne or Los Angeles would pay no tax, while someone who bought a modest new bike in Colorado to ride around the block once a month would pay the full tax. (Here I’m talking only about the bike-specific tax, not use taxes and the like.)
In other ways the tax would be unrelated to use. Some people with bikes don’t even ride them on roads or paved paths. Instead, they take their mountain bikes onto wilderness trails, which presumably would receive zero funding from the tax. Most people in rural areas probably would receive little or no benefit from the bike lanes and paths, so they’d end up subsidizing urban riders and tourists. And some people who ride recreationally on roads drive to less-populated areas to bike, far from special bike paths.
Then we have to ask how much the new tax program would raise (after the cost of administering it). There’s no question that drivers pay a lot in gasoline taxes. The average driver uses around 650 gallons of gas per year, so pays close to $300 per year in state and federal gas taxes. But a bike purchase is a one-time deal, so divide the $15 by the number of years someone owns the bike. Are we really going to create a new tax program to make some bike riders pay a couple bucks or so per year for infrastructure they may not even use?
Thankfully, Colorado’s Democrats probably won’t have to worry about the “anti-business, anti-freedom” bike tax, because Colorado’s Taxpayer’s Bill of Rights (TABOR) requires a vote of the people for new taxes. (Incidentally, Senator Kerr tried and failed to overturn TABOR in the courts.) My guess is that no one will want to conduct the requisite political campaign for the tax. But I could be wrong, and perhaps someone will include a bike tax as part of a broader transportation measure.
Are there any good alternatives to the bike tax? Here’s just one idea for sake of discussion. Colorado could require an annual fee (say $50) to ride a bike on certain dedicated bike paths. Bikers could get little stickers for their bikes, just like car owners do now. Visitors could pay a modest fee online for short-term use. This approach could raise serious money and dedicate it to something that the funders actually use. This is similar to how Colorado’s toll roads work now.
The Broader Transportation Debate
The debate over bicycles is just a taste of the debate to come over electric cars. Eventually (I anticipate), most people will drive electric cars. How fast that day arrives will depend mostly on how fast the manufacturers of such cars improve the batteries in terms weight, cost, and performance. Obviously, people who drive electric cars do not pay gasoline tax. Even if only a few percent of drivers switched to electric, that would seriously impact road funding.
So the question about electric cars is the same as the one about bicycles: How do we get users of transportation routes to pay for their use?
One proposal that I don’t like is to make people pay according to how many miles they drive. If, to enforce the tax, government agents investigated where people drive, that would be a gross invasion of privacy and an open invitation to abuse. But perhaps there’s a way to do it that solves this problem.
One alternative to the gasoline tax is simply to finance roads (other than toll roads, which could be expanded) out of general taxes. Politicians already supplement gas taxes with general funds (and other funds) to pay for roads. There’s some relationship, however imperfect, between how much someone earns (and so pays in taxes) and how much the person benefits from the roadways, with benefits including trucked deliveries and the like. But there’s no getting around the fact that general funds separate payment from use.
The usual problem with government paying for roads out of general funds is that politicians use roads to extort the citizenry for more tax dollars for less-popular programs. One possible approach to this problem is to lock the legislature into spending a certain fraction of general funds on transportation routes. (Then we’re left “only” with political fights over which transportation projects to fund.) Or voters could agree to “fix our damn roads” by requiring that the legislature pay off road bonds without raising tax rates or imposing new taxes.
As more drivers switch to electric cars, the gasoline tax will make less sense. However government gets drivers of electric cars to pay for roads, whether through general funds or taxes on vehicles or mileage, government should do the same for drivers of gas cars and eliminate the gas tax.
Of course, this discussion has been in the context of government-controlled transportation routes. Whether government should control roadways and such is a complex topic for another day. In an age of Islamic terror, Russian election meddling, and government-mismanaged health insurance (among other serious problems), privatizing the roads is not a pressing issue. Until and unless we fundamentally rethink the legal structure of roadways, we need to do the best we can with what we’ve got. So politicians need to figure out how to get people who use transportation routes to pay for them, whether they drive gas guzzlers, electric cars, or bicycles.
Image: Marine Corps