MARCUS: If not taxes, how about user fees?

July 13, 2009

“Most people hate to pay taxes,” Gregory Goad said. “They don’t appreciate the services taxes support, they don’t understand why taxes are necessary, or they don’t like to help people in need.”

“That’s a sweeping condemnation of most people,” I said.

“Exactly,” Greg said. “People see taxes as compulsory payments unrelated to the use of government services. That’s why government needs to move to user fees. Charge people for the services they use and increase fines. Take some of the mystery and softness out of government.”

“Charge people for police and fire service?” I asked. “Charge for schooling children?”

“No,” Greg replied. “Charge for ‘non-essential’ services currently provided ‘free’ and increase fines for anti-social behavior.”

I opened the door.

“Such as?”

“School transportation is currently financed from taxes,” Greg said. “If people choose to live beyond walking distance from a school, if they choose to live where there are no sidewalks, let them pay for transporting their children to school.”

“That’s insane,” I objected. “Free school transportation is built into the fabric of our society. Rich and poor alike have access to it. If you charge for it, more parents will be obliged to drive their children to school.”

“Free school transportation was started to enable farm kids to attend school more readily,” Greg said. “Now it is nothing more than an enabler of urban sprawl and poor land use. As for poor children, we could provide vouchers for those who are eligible for free lunch programs and live beyond certain grade-adjusted distances from school.

“Parents will have to weigh paying for busing versus the inconvenience of driving. It’s a simple calculation. 

“Right now,” Greg continued, “people think the school bus is free, but it is actually included in the property tax. I can see paying for the education of children in my community, but why subsidize the foolish location decisions of their parents?”

“It’s a good thing you’re not running for the school board,” I said.

“Oh, there is so much more,” he said. “We have to stop giving away ‘free’ parking. User fees for parking on public and private land make sense. That means, if you park on the street in front of your home, in a parking lot at school, work or while shopping, you pay for that privilege.”

“How would you do that?” I asked.

“Nothing to it,” he said. “Every car registered in the state pays a parking fee based on the square footage of the vehicle. Smaller cars pay less than larger cars. The fee is remitted by the state to the city or town where the owner resides. All parking providers, government or commercial, pay a square footage fee. This approach helps encourage public transit, as employers will try to recoup this fee from workers, and businesses will try to raise prices for customers.

“Alternatively, we use technology to charge for parking as we charge for toll roads. Or we could have every driver swipe a parking meter with an electronic card as they do in casinos.”

“You’re an irrational radical,” I said.

“No,” he replied. “My proposals are very consistent with conservative economic reasoning.

“For example, use electronic devices such as now employed on the Indiana Toll Road on all interstate highways. You want to drive a premium road, you pay a premium price. We could make highly congested intersections subject to tolls at certain times of the day. These are all feasible with today’s technology.

“Plus, put stiff fines on noise, throwing trash from cars and engaging in other forms of pollution.”

“Makes me wonder,” I said, “if it would be best to cut government spending rather than go in this direction.”

“OK,” Greg said. “Just find agreement on what to cut.”


Marcus taught economics for more than 30 years at Indiana University and is the former director of IU’s Business Research Center. His column appears weekly. He can be reached at mmarcus@ibj.com.


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