Still Gridlocked
9th June 2015
The Obama administration wants to change the way American corporations that operate in foreign countries are taxed, increasing tax revenues to the federal government, and to use those revenues on infrastructure programs including the transportation bill. This is called “repatriation,” but the problem is that there is no relationship between corporate tax policy and transportation. On one hand, using repatriation for transportation weakens the user-fee links between transportation agencies and users; on the other hand, if Congress agreed to the change in tax policy, many other interest groups would line up with their hands out for a share of the take.
The program of the Democrite party is ‘Leave no source of revenue untapped’.
Though Republicans have the majority of both the Senate and the House, they are far from united about what should be done.
There is no ‘Republican party’. There is a Democrite party, and there is a not-quite-Democrite party that uses ‘Republican party’ as a Clever Plastic Disguise.
Fifty-two years ago, Congress had almost nothing to do with transportation. Though it had funded the Interstate Highway System in 1956, it acted mainly as a pass-through organization, taking revenues collected from refineries and oil importers and handing them over to the state highway agencies according to a simple formula. At the time, the United States was known for having the best transportation system in the world.
Ah, yes, the Good Old Days.
Since then, Congress has increasingly taken the reigns of transportation policy. It began funding mass transit in 1964. It started tinkering with highway funding, splitting the funds into more and more pots and specifying how each pot could be used, in the 1970s. In 1991, it gave cities incentives to build expensive rail transit projects.
The result has been little short of a disaster. The Interstate Highways are due for replacement yet there is no money to do so because Congress has diverted most of the federal gas tax to other things. Transit requires huge unsustainable subsidies that have done little to increase transit ridership. America’s rail transit systems are in deplorable condition as agencies eagerly build more lines even though they can’t maintain the ones they have.
The thing is that the business of government is buying votes, not all that other stuff. Until financial and performance incentives can be aligned somehow, things will just continue as they are.