It’s an election year in the United States. The politicians of both major political parties continue to outline their initiatives for their first Presidential term in office. Democratic candidate Barrack Obama outlines a long list of new spending promises under the slogan “Yes we can”. Meanwhile, Republican John McCain wants to continue spending on the Iraq war well into the future. In the Congress, there is no desire to cut federal spending and the dubious practice of spending “earmarks” continues without any real reform.
Meanwhile, the United States federal debt is currently approaching 9.5 trillion dollars and it is about to get worse since the national unemployment rate is now rising. The federal debt burden already amounts to about $79,000 for each United States taxpayer. Therefore, the current federal debt, economic recession, Iraq war, and new election year campaign promises are a formula that amount to one thing for the average American taxpayer: higher income taxes.
However, it is not as though taxes are not high enough already. In 2008, Americans will work every day from New Year’s Day through April 23, just to pay their taxes. It will take 74 working days to pay federal taxes and 39 additional working days to pay state and local taxes. Americans will spend more on taxes in 2008 than they will spend on their food, clothing, and housing expenses combined.
As both political parties in Washington D.C. contemplate raising income taxes in the next few years, there is a new and unique tax that is already under consideration in several large American cities. It is a tax already generating revenue in international cities like London, Milan, Stockholm, and Singapore. It is called the “Congestion Tax” and its implementation is feared by automotive commuters in major United States cities. The tax is based upon a vehicle entering a city or a designated area of the city. The tax is levied upon an automobile’s entry into the designated zone.
London could be a model for the administration of the congestion tax in major United States cities. The congestion tax in London started with a commuter tax of eight dollars a car. That daily tax has recently doubled for small gas powered cars and large vehicles now pay a $50 Congestion Tax each day. London does not have tollbooths or barriers around the Congestion Charging Zone and no physical tickets or passes are required. Monitoring is done through a network of camera sites at every entrance and exit in the tax zone and within the zone. Each camera site consists of at least one color camera plus a monochrome camera for each lane of traffic being monitored. The camera’s capture automobile license plate numbers and people are required to pay the tax based on the pictures.
The stated purpose of the congestion tax is to clean up the environment by reducing C02 emissions from automobiles stalled in traffic in heavily traveled, congested areas in large cities. The tax acts as an incentive for automobile users to utilize public transportation. The benefits of an increase in the use of public transportation would be to improve air quality, reduce traffic congestion, and improve public health by reducing air pollution.
New York City is one of at least five United States cities considering the implementation of a congestion tax. The initial tax for automobile drivers entering the New York congestion zone would be over eight dollars each day. In addition, there is an additional incentive for New York City because of the promise of $354 million in grants from the Federal Government for creating a congestion zone.
Consider the implications of these federal grants for a moment if you will. A taxpayer pays federal income taxes and the government uses that tax money as an incentive for local city governments to initiate an additional tax burden on automobile drivers in order to solve local traffic bottlenecks. It certainly becomes problematic for a taxpayer when federal income taxes are used as a financial incentive for cities to create new local fee based taxes.
In fact, a congestion tax may have dubious ramifications to local business and city employment. What the congestion tax will do is drive local business away from the inner cities into the suburbs where commuting workers and business customers do not have to pay a traffic tax . In addition, cab fares in large cities will have to increase in order for a passenger cab to enter a congestion zone.
Indeed, it is not been scientifically proven that long term global warming is man-made and the result of increased CO2 in the atmosphere. Consider that the planet’s recent warming is likely a result of the long term solar cycle of the Sun. In reality, the Congestion Tax is really a tax wolf in environmental sheeps clothing. The truth is that it’s just another unnecessary tax burden on the worker and retail consumer that will not save the planet from global warming.
James William Smith has worked in senior management positions for some of the largest financial services firms in the United States for the last twenty five years. He has also provided business consulting support for insurance organizations and start up businesses. Mr. Smith has a Bachelor of Science Degree from Boston College. He enjoys writing articles on political, national, and world events. Visit his website at http://www.eworldvu.com
