Know your real Taxes in Texas

Recently there have been numerous studies about the Toll Road controversy in Texas.  Gov. Rick Perry and his band of mental midgets in the GOP ranks came up with the “bright” idea to take the gasoline tax dollars and turn them back to the general fund so they could reduce and ease the deficit. Makes them look smart and act like good stewards of our hard-earned money…good American values. So, to pay for roads, they turned to private business and the toll system.  Let’s hear it for free enterprise and the private sector!!! 

Only the toll companies got a big boost. 

The roads were paid mostly (in some cases up to 60%) by federal funds.

That ‘s right. 60% came from your pocket in the form of Federal dollars. The toll companies, splitting the remaining 40% between itself and local municipalities and some state dollars, meaning that the risk side of the private investors was as low as 10% in some cases.  And yet, every Texan who wishes to travel these roads is paying on a per use basis (as well as the money they have already paid in Federal Transportation taxes – gas tax.) And it is a regressive form of taxes. The better your gas mileage on a car, the more you pay in the long run….that will come out in an article a friend is editing just now. But suffice it to day, we are getting screwed.) After all, you’ve already paid for a good part of the road in your federal taxes and now your are paying for the privilege to ride over the ribbons of concrete again, only you are paying Wall Street for that right.

This friend of mine has worked out the math in all of this, which I will not bore you with it today.  He is submitting it to the Dallas Morning News to show how the Republicans and their no-tax policy are actually costing each of us more money in the long run by not using the benefit from ‘volume taxation’. That is a term coined by a professor in Indiana who tried to get his state to see that taxes paid by the masses amount to a few dollars each but add up to huge sums; while tolls paid by per/use users are huge dollars that end up as huge profits for private companies, which in the state of Texas, didn’t invest that much to begin with.  Here is a quick look inside the math. (Stick with me here this isn’t hard and we are not solving for X.)

With the Volume Taxation theory you and I and eight other guys put in five dollars each for a $50 piece of gym equipment.  (We can keep it in my garage.) And we use that equipment four times a week.  Times 52 weeks that comes out to about 2 cents per use.  But if we have to pay Tolls of 50 cents per use…well you can see how much more expensive it can become. The volume of small increments of public taxation can buy pay for huge programs, while Tolls pay only for investors to get income and at a much higher rate. It is expensive. Now to be transparent here, I own some NTTA bonds. I don’t blame them for the mess Perry and Company got us into. The Toll folks were just smart enough to take advantage of it. And it is the only way I can see to get my money back from the upside down system.

I can remember when this state had a truly great highway system: paid for by our gasoline and road use tax dollars. Dollars that every Texan paid and every trucking company paid each and every time we went to the pump. As we filled up, we were paying for roads to drive those cars and trucks over – all across the state.  It was a straightforward deal. Then the politicians got involved. (Remember the Sate Lottery!!!! We should have run screaming. Do not trust Austin!!!  And conservatives want to turn our healthcare over to the states….NO THANKS!)

If we continue down this Dollars for Miles program the GOP in Austin has set us on, we will soon have the most expensive highway system short of Illinois in the country. Don’t believe me?  Illinois went through the same exact thing (only led by Democrats there) in the late 1970’s and 1980’s and today it cost a small fortune to drive from O’Hare to just about anywhere in the Windy City. Or further east along the New Jersey-New York frontier: ever come out of NYC on the Jersey turnpike?  FORGETABOTIT!

Drive and pay. Drive and pay.  Drive and pay.

Not smart. Not a wise use of public resources.

So, as you go to the polls feeling all-smug about protecting your pocket book with a vote for the Tea-Party/GOP, remember that the money for society and its infrastructure and services has to come from somewhere. It doesn’t grow on trees. And if we are going to be a private equity state – driven by ROI – Texas is going to get very expensive to live in.  Even with very, very , very low taxes.  (And heck, that’s just roads…wait to I show you what Rick wants to do with your healthcare taxes here in the Lone Star State.)