Taboo Taxes
Posted in Econ, Politics by George
If you had to raise money to finance transportation improvements, would you rather:
- Slightly raise taxes so that everyone pays a share of the improvements?
- Levy a huge tax on approximately random individuals?
Virginia’s relatively new speeding and other driver infraction fines are much like option #2. “The purpose of the civil remedial fees imposed in this section is to generate revenue,” states Virginia Code 46.2-206.1. Basically, Virginia needed money to pay for transportation expenses, and because the word tax is such taboo in the US today, “creative fundraising” was necessary.
This raises a few serious concerns. First, because this law was deliberately created as a fundraising mechanism, the implication is that “we’re hoping for people to break the law so we can raise enough money.” It’s almost as if Virginia is condoning setting up speed traps where the speed limit goes from 55 to 25 for no reason and setting cop cars all around the trap to raise money.
Second, this is a very regressive fundraising mechanism. A reckless driving ticket costs over $1000. If a poor individual is ticketed with reckless, they might just have to go hungry for a while to pay for it. However, if a rich individual is ticketed for reckless driving, the ticket is a small percentage of their wealth. If these transportation improvements were financed the way things normally are financed, with a tax, certain poor individuals wouldn’t have their finances ruined by the unfortunate situation of being caught driving recklessly.
I can see the argument that instead of taxing something like income, we should tax something that creates a negative externality, like driving recklessly. However, I don’t really buy that “reckless driving,” (going as little as 15mph over the speed limit) something often created by speed traps, is that negative to other drivers.
If Virginia wanted to raise revenue efficiently for transportation improvements, it missed the best and most obvious choice: an increase in the gasoline tax. Gasoline consumption creates a clear negative externality, and taxing it could raise a substantial amount of revenue while encouraging consumers to act efficiently. I’ve talked about the gasoline tax many times before, so I won’t dwindle on the subject. Personally, I’d love to see a significant increase in the gasoline tax nationwide, as soon as possible. [although I haven't quite figured out the effects of a statewide vs. nationwide increase in the gas tax]
So why wasn’t a regular income tax increase, sales tax increase, or targeted gasoline tax increase implemented over Virginia’s current obscene driver tickets? Because the word “tax” is taboo today. The rhetoric “the government is snatching money from your pockets,” is on the tips of way too many people’s tongues.
Here’s a news flash: taxes are not inherently bad. Sometimes, the government needs to tax us so things can get done that individuals wouldn’t do on their own. Like build roads, educate children, make sure the air and water are clean, protect the country, and all those other things we couldn’t coordinate to do without a government.
So please, Virginia, get rid of these obscenely high driver’s fines. I’d rather pay my fair share than be taxed by pseudo-Russian Roulette.
August 16th, 2007 at 8:35 am
Stick it to the man!
August 16th, 2007 at 9:30 am
I am generally against raising taxes or creating new taxes, because I don’t trust that the funds are always used appropriately (overpaid government officials, personal expenses/vacations being funded/reimbursed by tax dollars, etc.) It’s hard to imagine that there isn’t already enough tax revenue being generated out there. But I see where you’re going with this, and it makes sense. The gasoline tax is a pretty neat idea, and I would probably choose option #1 (gasoline tax) if given the choice.
August 16th, 2007 at 10:54 am
I mean, I’m not for distorting the economy with high income taxes, all else equal, but if we need to generate revenue… a tax is better than a reverse lottery like these speeding tickets…
August 16th, 2007 at 11:44 am
I’m not too sure that there is much corruption in our government. Maybe the funds are spent inefficiently, sure, but that’s different than corruption. I think that in the vast majority of cases government officials genuinely care about doing their jobs well and doing what’s right to govern the people.
August 16th, 2007 at 11:53 am
I’m somewhere in the middle I suppose. Depends how you define corruption. There’s always going to be some sort of bureaucratic waste when taxes are levied just because they have to be collected/allocated/etcetera which takes time and money and those costs wouldn’t be there if the taxes weren’t collected in the first place. However, when the net benefits of the redistribution / use of tax dollars outweighs the bureaucratic waste of taxing in general, it’s OK.
August 16th, 2007 at 11:54 am
So anyway, I definitely agree with George’s point, and I’m especially concerned about the low income people that get screwed over by this unfair law. Also, in my opinion these fines would fall under cruel and unusal punishment. I’m sure that argument would not hold up in court, but it does seem cruel and unusual to me. Cops need to keep the spirit of the law in mind when they’re enforcing it. The spirit of this law is to keep dangerous/drunk/crazy drivers from hurting themselves and other drivers or pedestrians, but I fail to see how these new fines do that. The law should not be a for profit business.
August 16th, 2007 at 11:56 am
Yeah the idea that this is a fundraising mechanism is what worries me the most. That just messes with the incentives of the cops so that if they don’t catch enough people, they’re not doing the fundraising portion of their job. It could just be that people are driving safely…
August 16th, 2007 at 11:58 am
I would define corruption as taking money that is meant for public use and hogging it for personal gain, or using one’s position to give themselves unfair advantages over others.
August 16th, 2007 at 3:52 pm
Maybe its different in Virginia, but there’s quite a bit of corruption in the state and local governments in my area of Florida, especially Pensacola and Escambia County. There’s always a scandal here, many times resulting in arrests and convictions, which makes me wonder how much more is actually out there that hasn’t been uncovered yet. I would say that in my area, politicians/government officials are in it more for the power and publicity than they are out of genuine concern for the well-being of the public. As a Pensacola resident, it’s almost naïve to think otherwise.
One of the more high-profile cases…
More on that…
August 21st, 2007 at 7:53 pm
I dont know if i really agree. I mean I understand the fact that it is undesirable to use ticketing as a form of active fundraising, but the point is people arent supposed to be speeding anyway. Its called voluntary compliance of the law. Maybe if the penalties are higher people will feel less compelled to break the law. Either way I am not against raising taxes, its just that I am not against levying higher fines against law breakers. As far as the part about the tax being set against random individuals, that is a farce because people have the choice of whether to speed or not.
August 21st, 2007 at 8:01 pm
As an after thought another interesting debate might be the new safe driving laws in Virginia, which only apply to VIrginia residents. Many people feel that this is going to see quite a few appeals on the consitutionality of these laws because they do not reflect equal rights, since they only apply to some drivers.
August 22nd, 2007 at 8:29 am
People do have the choice to speed or not, but it’s not that simple. There are places in the road where the speed limit drops by 20 mph all of a sudden. Or maybe there’s some urgent emergency and you just need to the hospital or something quickly. Maybe you just weren’t paying attention to the speedometer for a minute and didn’t realize you had crested the 20 mph over the posted speed limit mark, which really isn’t hard to do at all. Should someone, especially someone with a job that pays minimum wage, be subjected to up to a $3,000 fine for that? Seems a little too harsh to me.
You can get on a moral soap box and say that we need to punish lawbreakers, but the fact is that good people can make mistakes or can get into situations where it may be understandable that they’re speeding. I’m not saying that all traffic fees are stupid, but let’s be reasonable here. There is no point in having an excessive fine that will keep some people from being able to afford health insurance or other crucial things. The only reason the fees were raised is to raise funds for roads, and that should not be the intention of the law.
September 3rd, 2007 at 5:13 pm
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