Proposal: Make congestion pricing and toll roads a percentage of income

Congestion pricing has often been pushed forward as a solution to very high volumes of traffic that result in traffic gridlock because the volume exceeds the capacity of the existing road system to handle them.

The most frequently proposed solution is that the government (municipal, state/provincial, or federal) government pass a congestion charge. Critics allege that this system would then hurt the poor the most.

The issue is that in many North American and Australian cities, the mass transit systems are not the same quality as we see in more densely population nations in Europe and East Asia. Increasing tolls does not solve the underlying problem because low income citizens are still forced to travel via automobile. Without a good mass transit system, people will still be forced to travel by automobile, toll or not. Effectively this system harms the poor disproportionately. They drive for example with used vehicles, versus a more well-off citizen that would drive with a new car that is loaded with the latest that technology has to offer, but they are still forced to drive.

However, everyone driving of course has other consequences. Traffic is one, energy consumption (whether oil or electricity), air pollution, and then there are the costs to building the roads, maintaining them, along with the use of precious land. The more traffic, the more severe these problems become. The congestion pricing solution was proposed to address these challenges.

There have been exemptions proposed, for example carpoolers are often exempt. This rewards desirable actions because it means that if 2 or 3 people share a vehicle, it means that there are fewer vehicles on the road (ex: if say, 2.5 people used a vehicle, we would have 1,000 people on a road at a given time instead of 2,500). However, not all poor people are able to exercise this option. Compounding the problem, the poor are more likely to be forced to commute to the least desirable areas to live, which means that there is less opportunity for carpooling.

Let me give an example. Imagine a high technology office where there is a minimum wage worker. Now let us say this is in a city where the mass transit is very poor. Most of the employees are likely making upper middle class wages and living in a trendy part of town, whereas the poorer worker  would not be able to afford that area, leaving less opportunity for carpooling, whereas the wealthier colleagues who likely make within the same range of salaries are more likely to live in an area together.  That less well off worker is penalized first in having the toll take a higher percentage of income, second due to the fact that many cities in North America have poor mass transit service, and finally because there is less opportunity to make the most of incentives such as carpooling. They may be able to find someone say, in another nearby business, but that would be more difficult than finding colleagues in the same workplace.

So what is a possible solution?

I propose that the Federal Government of each nation take over the collection of tolls in each nation.

Every year, when tax returns are complete, the government has the information for how much all of the residents in a given municipality make in terms of income.  They could use this information for charging tolls as well. This is not as radical as it seems. In the European Union, speeding fines are often a percentage of income. This was proposed as a solution to prevent traffic violations from being biased against the poor. Reading the article, note one of the comments:

i [sic] agree. the [sic] wealthy now often drive very recklessly because fines are literally a joke to them. At my school, the 16 year old rich kids used them for bragging rights. They wouldn’t do that if daddy had to shell out 100k every month cos [sic] they were speeding

While anecdotal information does not replace hard data, if this is true, this is extremely disturbing. Effectively this means the very poor have to pay a very high percentage of their income, while the wealthy can ignore traffic laws, endangering the rest of us. The purpose of speeding fines should be to increase the safety of the roads, although as the article previously cited notes, they are often used by cities to supplement revenue.

Why not apply the same system to tolling and congestion fees?

An example, say the median income is $50,000 and a fee is $5 to get into the express lane of a road.

  1. A person who had $50,000 in taxable income last year would pay 0.01% of their income, or $5
  2. A person who had $25,000 in taxable income last year would pay 0.01% of their income, which would be $2.50
  3. Meanwhile, a wealthy person who is making $1,000,000 in taxable income would pay the same 0.01%, only they would pay $100

We could make this even more progressive, for example, a person making less than 1/2 the median income might pay 1/2 the percentage, while a person making double might pay a higher percentage (say progressively higher, 0.01% x (your income /; municipal average, up to a maximum of 2x).

  1. So our first person who had $50,000 in taxable income last year would still pay 0.01% or $5
  2. Our second person who made $25,000 in taxable income last year might pay 0.005% or just $1.25
  3. Our final person, the $1,000,000 in taxable income last year would pay 0.02% or $200

Why such a system? First, the very wealthy are likely to be money rich, and time poor. Second, the poor are likely to live in the less desirable areas, namely those which are likely to have longer commutes. Third, wealthier individuals are far more likely to own larger and heavier vehicles because they can afford them. Road wear is based on the fourth degree of axle mass. An example, a truck is with 4x the axle mass, that means it is doing 256 times the damage to roads (4^4), meaning smaller subcompact vehicles under current fuel taxes subsidize heavier vehicles. Fourth, wealthier people have much more in savings, which leaves more ability to pay. See this as well for more information.

This system would provide a system that is fair, works to reduce congestion, and does not cause unduly harm on the poor. To make this more fair, the money could be spent on providing a good quality mass transit system. Ultimately, car dependency is a function of poor urban planning. Cars can be great, but we must not have a society where we are completely dependent on the automobile as the sole means of transportation.

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