President Obama’s budget would raise taxes to fund a $478 billion infrastructure spending plan for highways, transit, and other items. The budget (on page 26) cites an International Monetary Fund study that “highlights the importance of choosing high-efficiency infrastructure projects based on rigorous benefit-cost analysis.”
Republicans say they favor cutting regulations to spur growth and create jobs. And they generally favor expanding international trade. They can attain those goals by reforming labor union laws.
With the highway bill soon in front of Congress, and there being lots of agitation to increase federal funding, Adam Smith had words of wisdom for policymakers. He advocated user-pays and decentralization.
Another day, another news article supportive of raising the federal gas tax. This time it’s theWall Street Journal. The article notes that there is strong public opposition to raising gas taxes, but then proceeds to give us the arguments in favor of it, but none against. So for the next reporter writing about raising the gas tax, here are some policy reasons against it.
In an article about federal highway legislation yesterday, the Washington Post illustrated the art of advocacy journalism cloaked as news reporting. The article explored different options for raising federal taxes $100 billion to fund state highways. It quotes three transportation lobbyists and included scare lines about the supposed consequences of not raising taxes (“… hundreds of thousands of construction jobs put at risk…”).
The problems with federal highway spending are well documented. The program distorts project incentives and distributes money inefficiently. A new report from the Government Accountability Office (GAO) adds to the list of problems, detailing improper fund management within the Federal Highway Administration (FHWA).
An obituary in the Washington Post for Robert Poli provides a chance to look back at a decisive moment in Ronald Reagan’s presidency. Poli was the head of the militant Professional Air Traffic Controllers Organization (PATCO), which launched an illegal strike in 1981. The Post describes the significance of the action:
Department of Transportation (DOT) employees are abusing their government travel cards, according to a new report from the agency’s Inspector General. The report suggests that DOT officials missed $183,000 in unallowable cash advances and $2.1 million in unauthorized purchases on government travel cards.
We have an uncompetitive federal corporate tax rate of 35 percent compared to Canada’s 15 percent. Our Roth IRA is inferior to Canada’s TFSA, as Amity Shlaes and I discussed in the Wall Street Journal. And while Serena Williams still tops rising star Eugenie Bouchard, we should be paying attention to ”What Canada Can Teach Us About Tennis.”
Large government projects often double in cost between when they are first considered and when they are finally completed. This pattern—call it “Edwards’ Law”—is revealed in story after story about highways, airports, computer systems, and other types of government infrastructure.