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> Car-owning households in NYC are significantly richer than zero-car households. I have no doubt that's true, as in most other places on the planet. The thin

> Car-owning households in NYC are significantly richer than zero-car households. I have no doubt that's true, as in most other places on the planet. The thing is, you are making an absolute argument: those who drive in NY are richer than those who don't. I don't deny that. I'm making a relative argument: within the driving group, the poorer ones will be priced out. You say those are not poor, but "merely wealthy". Our grand-father said they are blue collar workers. You both lack data, and I suspect that we will see a wide, gentle slope, with most rich people driving, but also an important minority of the lower classes, depending on personal circumstances. The thing is, does the exact composition of the driving public mater for the regressivity to be a political problem? Some will be priced out and they will scream bloody murder, because from their perspective they were sacrificed in favor of the rich. You could go out and say "boo hoo, you are merely rich", but that's a politically imprudent move - a thousand personal stories will pop up about those marginal blue collar workers no longer able to feed their families. So you could be right that it is not regressive in a broad, social justice sense, but that's not the sense in which the problem will be sliced. Rather, the vast majority of the affected merely rich will invoke the principle of the matter, and in principle it's designed to price out the poorer drivers, there's no doubt about that. An idea I'm toying with is to distribute "tradable driving coupons" to all people holding a drivers license. A flat tax would develop on the market, so the net effect is similar to congestion charging. But now the tax does not go to the city, but to the poorer residents who opt not to drive. Ideally, fiscal credits should be earned, so as to not reward those who don't pay any tax and thus have no contribution to the infrastructure. This beautifully solves the political problem and makes driving a matter of personal choice: you are now rewarded for preserving the public good.

gojomo 8y ago
OK, we agree that I'm likely correct, barring any other evidence that remains unpresented, that road congestion pricing in NYC wouldn't be "regressive" over all New Yorkers/visitors. If the congestion fees go to expenditures that broadly benefit all New Yorkers, it's far a simpler system than "tradable driving coupons" and could wind up highly progressive. (At one extreme, this "broad benefit" could be just a per-capita rebate of fees collected, in cash, to all residents.) A "coupons" system would trend towards being just like fees: at the margin, every coupon-holder has to decide whether they prefer cash (from selling their coupons) or driving, exactly like someone facing a congestion fee. Roughly the same set of people "priced out" by fees would be eager to sell rather than drive. A coupon-system might be nastier to the non-conscientious, because there's likely extra budgeting/deadlines/resale-effort involved. And the lost revenues for broad public projects would have to made up through other NY taxes – some regressive, some progressive – so the net effect on household budgets of a big "coupon giveaway" would be unclear.
- bumholio 8y ago
  On the regresivity issue, the original discussion in this thread was why the tax is politically unpopular. And the answer is: because it's perceived as regressive by the voting public, and acts regressive within the driving segment. You point out to a widescale redistribution effect to the non-driving public that counteracts this, but I disagree that it makes a significant difference outside a very narrow intellectual public like this forum. Congestion charging will always be an uphill political struggle. Thank you for the perspective on the voucher idea. Yeah, in a perfect world, it's equivalent with a congestion tax coupled with a tax deduction of equal amount, I've hinted to that. But you would need to dynamically change the amount of the tax to keep up with road supply and demand, and that will clearly be be an explosive political decision. Also, for cash in hand to be psychologically equivalent to public services, the voters have to have full trust in the public spending process, which seems unlikely. So in practice revenue generating vouchers could be much more palatable. The additional transaction costs and friction could be negligible compared to a traditional congestion tax: to drive more than your allotment, you load your driving wallet with cash that is deducted at prevailing market voucher prices; at the end of the year, if you generally drove less than the allotment, you will find a nice tax credit waiting for you inside the public tax internet gateway. By the way, I'm a city councilor in my European town and that's why I might show a strong slant towards practical ways to achieve political consensus, as opposed to just going for the superior theoretical solution. Cities rarely move on theoretical optimum paths and recently, of all idiotic policies, I had to struggle for ending the public subsidy of free parking. No-brainer, but wait until a significant part of the public received if for decades and strongly believe it's some sort of natural right.

gojomo 8y ago

OK, we agree that I'm likely correct, barring any other evidence that remains unpresented, that road congestion pricing in NYC wouldn't be "regressive" over all New Yorkers/visitors. If the congestion fees go to expenditures that broadly benefit all New Yorkers, it's far a simpler system than "tradable driving coupons" and could wind up highly progressive. (At one extreme, this "broad benefit" could be just a per-capita rebate of fees collected, in cash, to all residents.) A "coupons" system would trend towards being just like fees: at the margin, every coupon-holder has to decide whether they prefer cash (from selling their coupons) or driving, exactly like someone facing a congestion fee. Roughly the same set of people "priced out" by fees would be eager to sell rather than drive. A coupon-system might be nastier to the non-conscientious, because there's likely extra budgeting/deadlines/resale-effort involved. And the lost revenues for broad public projects would have to made up through other NY taxes – some regressive, some progressive – so the net effect on household budgets of a big "coupon giveaway" would be unclear.

bumholio 8y ago
On the regresivity issue, the original discussion in this thread was why the tax is politically unpopular. And the answer is: because it's perceived as regressive by the voting public, and acts regressive within the driving segment. You point out to a widescale redistribution effect to the non-driving public that counteracts this, but I disagree that it makes a significant difference outside a very narrow intellectual public like this forum. Congestion charging will always be an uphill political struggle. Thank you for the perspective on the voucher idea. Yeah, in a perfect world, it's equivalent with a congestion tax coupled with a tax deduction of equal amount, I've hinted to that. But you would need to dynamically change the amount of the tax to keep up with road supply and demand, and that will clearly be be an explosive political decision. Also, for cash in hand to be psychologically equivalent to public services, the voters have to have full trust in the public spending process, which seems unlikely. So in practice revenue generating vouchers could be much more palatable. The additional transaction costs and friction could be negligible compared to a traditional congestion tax: to drive more than your allotment, you load your driving wallet with cash that is deducted at prevailing market voucher prices; at the end of the year, if you generally drove less than the allotment, you will find a nice tax credit waiting for you inside the public tax internet gateway. By the way, I'm a city councilor in my European town and that's why I might show a strong slant towards practical ways to achieve political consensus, as opposed to just going for the superior theoretical solution. Cities rarely move on theoretical optimum paths and recently, of all idiotic policies, I had to struggle for ending the public subsidy of free parking. No-brainer, but wait until a significant part of the public received if for decades and strongly believe it's some sort of natural right.