The Unequal Geographic Burden of Federal Taxation

National Bureau of Economic Research ^ | November 2008 | Lester Picker

[RobRoy]

This is one reason I am moving to Kentucky. I have said for years that what is considered rich in some areas is considered lower middle class in others. Yet the federal tax system is the same wherever you live.

In eastern Kentucky, $150,000 a year is “rich”. In Manhattan, good luck finding a studio apartment.

If one can telecommute, the world is their oyster. Well, the US is anyway...

[meyer]

It would be interesting to watch, as for example when the interstate highway system went away in rural areas.

Good point regarding disbursement of funds, but perhaps we'd see some self-sustaining, toll-funded private roads instead. Enterprising people are certainly capable of finding solutions outside of the confines of the federal government. And it's a good bet that unlike government projects in general, only the people that use them would have to pay for them.

[M. Dodge Thomas]

Opposition to private toll roads is pretty fierce in some quarters here - occasionally I also suggest that things like congestion pricing and automatically tolled usage fees would be a good idea good idea on publicly funded highways, usually I’m accused of being a socialist or worse.

I think it’s coming down the pike though, given GPS it’s becoming increasingly practical to charge motorists not only for miles driven but for some of the externalities, for example you can charge heavier vehicles more per mile to reflect the fact that they create greater ware on road surfaces (to some extent they already pay higher usage fees, as heavier vehicles usually use more gas, which is taxed at the pump for road construction and maintenance).

I’ve never seen studies that attempt to assess the real per mile cost of running a given vehicle on a given road, but I’ll bet it would be a real shocker, especially for people in rural areas with low average traffic - for example there’s little stretch of road that I take past Questa NM to the Wild Rivers recreation area, at the times of year when I’m there you can drive the whole length and likely see no more than one or two cars, it would be interesting to know given the cost of maintaining that road how much I really ought to be charged if I’m paying my fair share to maintain it.