IU professors conducted a survey to see how public opinion stood on the issue of benefit principle taxes in regards to a mileage tax and found that U.S. public opinion is not in support of benefit principle taxes.
Stacey Giroux, the study director at IU’s Center for Survey Research, and Denvil Duncan, John Graham, Venkata Nadella and Ashley Bowers of the School of Public and Environmental Affairs wrote the article “Demand for Benefit Taxation: Evidence From Public Opinion on Road Financing” based on their research findings, according to an IU press release.
They found that overall the U.S. public does not support benefit principle based taxes, according to the press release. Benefit principle taxes are based on the idea people should pay for goods and services depending on how much they use them.
Currently, the federal government is discussing how to finance roads because fuel tax revenue is falling, according to the release. Since 1993, the federal government has charged 18.4 cents for every gallon of fuel to maintain roads.
However, because of fuel-efficient cars and politicians not changing the fuel tax rate, funding for road maintenance is running out.
The federal government is exploring new revenue options, including using dedicated revenue sources, drawing from the general federal fund — which is financed through broad-based taxes — or using benefit principle systems such as increased fuel taxes, tolls and mileage user fees, according to the release.
“It’s a serious issue — not just at the federal level, but the states are seeing this and trying to do something about it,” Duncan said.
In the survey of 2,087 Americans, only 5 percent supported a strictly defined benefit principle and only 34 percent supported a generously defined benefit principle, according to the release. Another 49 percent believed everyone should pay equally, according to the release.
Economists think benefit principle taxes are effective because consumers who pay for a service are more likely to monitor their use and cut back if needed, Duncan said in the press release.
He also said one could argue these taxes would distribute the cost of roads in proportion to who benefits from the roads.
This, however, doesn’t account for the benefits acquired via shipping services, postal services and other services that use the roads.
Duncan is currently working on a new survey focused on Indiana residents, according to the release.
Suzanne Grossman
