Thursday, December 01, 2005

A car in every garage...

Let's see if I understand this right - this proposal would give people money to buy and maintain a car if they earned less than $52,000 per year, even if they didn't actually own a car and relied on public transportation, shoe leather, or a bicycle. Gosh, I'd be over-joyed to get a check that would buy a new bike every year! And I imagine the auto manufacturers, the oil companies, the auto parts stores, and even the insurance companies would get behind this idea too.

That doesn't mean it's a good idea.

This could cost as much as $100 billion a year. We're already in debt up to our eyeballs. We've hocked our country to the Chinese. We're pouring money into the sand in the Middle East, and the Gulf Coast will likely be feeling the effects of Hurricane Katrina for year to come. What's not to like about putting a car in every garage?

I won't go into the ways that this is so very, very wrong.

=======Excerpts Follow==============

A Car In Every Garage

By Margy Waller, Washington Monthly. Posted December 1, 2005.

To be a fully functioning citizen in this country today, a car is a virtual necessity; so the federal government should subsidize a set of wheels and the commute to work.

Among the many unpleasant realities exposed by Hurricane Katrina and its aftermath--from persistent income and racial disparities to the chronic incompetence of the Bush administration--one of the most surprising, to many, was this: our nearly total dependence on automobiles.

Nowhere was this clearer than in the exodus from New Orleans itself. The difference between those who escaped with their lives and loved ones, and those who did not, often came down to access to a car and enough money for gas. Now, in the recovery stage, many of those who were left behind have been evacuated to trailer-park camps, where they are likely to be worse off than they were before, in part because they cannot get to where the jobs are.

...There is a limit to what government can do to reduce gas prices or increase private sector wages, at least in the short term. But it can do something to give middle-class families some relief and low-income workers a leg up--by recognizing that the cost of commuting is a business expense, and changing tax policy to reflect that fact. The federal government should offer tax credits that would lower the cost of commuting to work for low and middle-income employees, and would allow low-income workers who can't afford a reliable car to get one.

...Clearly, the problems are most acute for low-income families without cars. But even for low- and middle-income workers who do own cars, purchase and operating costs take a significant bite out of their income--more than 20 percent of all household expenditures go for transportation, second only to housing. For the vast majority of households, those costs aren't optional--cars represent a fixed and non-negotiable expense. And every time the price of gas increases, it is in effect a tax on work.

...The federal government should offer a tax benefit to anyone who commutes to work and is in the middle to bottom of the income scale--that is, anyone in the 60 prrcent of U.S. households making less than $52,000 a year. Those who need the credit most would get the most help: Lower-income workers would receive a refund if their credit exceeded the amount of taxes they owe, in the form of a check for up to $3,000. That's enough to help significantly with the purchase and maintenance of a decent, though not fancy, car. Those higher up the income scale would get a dollar-for-dollar credit against taxes owed; a family making $40,000 would get back around $1,000. To avoid punishing those who don't use cars, all workers with commuting expenses--even those who take mass transit--could claim the benefit.

...This is an ambitious proposal, and a costly one. If all eligible workers took advantage of the option--an unlikely prospect, based on our experience with other credit programs--the cost could reach $100 billion a year. Any initiative that big raises certain obvious objections.

Many who would be willing to spend that amount of money would prefer that it go to mass transit, in the hopes of reducing congestion and pollution. But there is little reason to think that even a massive investment in public transportation would substantially reduce the overall amount of driving Americans do. Anthony Downs, a transportation expert at the Brookings Institution, has projected that doubling the number of people who take mass transit to work (a Herculean achievement) would reduce the number who drive by only around 5 percent. While it unquestionably makes sense to improve service to the transit-dependent, particularly in dense urban neighborhoods, no amount of money will enable us to use transit to meet the needs of most workers. Only cars can do that. And even if every car-deprived household in the bottom half of the income scale were to buy an automobile, it would increase the number of vehicles on the road by only around 3.5 percent. The modest effects of this slight increase are far outweighed by the moral
imperative to give the poor access to a crucial commodity enjoyed by the rest of society.

...The political logic may be the most compelling for candidates: Any proposal that involves money in the pocket for this many voters won't lack for public support. In particular, rural and exurban workers who have long been particularly hard hit by this tax on work are a natural constituency for the commuting credit. Indeed, in addition to transforming the lives of America's inner-city poor, commuting credits could also be the first step toward making low- and middle-income voters feel that the federal government is making a difference in their economic well-being.

The idea that driving a car is a lifestyle decision has long since become outmoded. Americans do love to drive, but these days, they also must drive. To be a fully functioning citizen in this country today, a car is a virtual necessity, and any American willing to work ought to be able to afford one. We use the tax code to subsidize most other work expenses. It's time we did the same for the most common and unavoidable of them all.

Margy Waller served as a domestic adviser in the Clinton-Gore White House.
She is based in Washington, DC.


Blogger Travis said...

11:07 PM  
Blogger Ed W said...

You felt her piece was satirical, Travis? I didn't get that impresion at all. Besides, she's a Democrat, and it's a well-known fact that only Republicans eat their children and the wounded.

If it was satire, it fell flat with me. that's something to bear in mind the next time I toss out a bad joke.

I've always liked Swift's "Modest Proposal". I wonder if they could use it on the Food Network.

7:33 AM  

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