IMO it's probably a better idea to just keep on collecting them, and putting it away for the future. E.g. the I-5 bridge(s) across the Columbia River had tolls which stopped when Oregon & Washington bought the bridge, and now look where we are at. We have a 110 year old bridge needing replacement and no funds set aside for it. So what they will undoubtedly do is add tolls after spending a few billion to build a new bridge, and eventually it will get paid off. We could have been saving up for the cost and getting interest on it instead of the other way around. Even with a fairly modest toll, when you have a century to save.
This does require some legislative fortitude, however, to set aside the money for real and not just spend it on other things.
To me, the way they've done it seems correct. In your mind, where does the interest come from on the money saved for the bridge? The government has to be collecting interest from somebody no?
So, lets expand that idea a bit. Why doesn't the government just buy a lot of shares in index funds, kind of like an endowment, and then never collect any taxes? I can see a world where a large portion of private enterprise is held/managed by the government, and the proceeds of that is used to fund public works.
Well, the first reason is that most state governments[0] do not have anywhere near enough money in their accounts to get a return that will replace the revenue stream they get today through taxes. You might be able to build it over time by reinvesting budget surpluses.
The other problem I foresee is that the market is fickle. The S&P 500 reached a level in the second half of 2000 that it would not see again for over 14 years[1]. Any investment that needs to generate consistent revenue isn't going to have nearly the growth rate over the long haul that an index fund would provide. That makes the initial investment requirement significantly larger.
But otherwise, I am okay with the government owning a lot of private enterprise via index funds, so long as it has exactly the same voting power that I have. Which is to say, none.
[0] In case anyone needed the clarification, this whole discussion is about state governments; it does not really apply to the federal government for obvious reasons.
[1] Adjusted for inflation. The index did recover to the same number in 2007 just before dropping 50% in 2008.
Well, for the sake of
argument, let’s say the federal government prints all of the money the state would need for an endowment and hands it to the state. There is inflation, but the state never has to collect taxes again.
I think there are some small optimizations we can make to this flow though, like what if the feds who printed the money held the endowment for the state and just distributed payments, instead of letting each state manage its own endowment.
There is a principle of governance that "you are taxing too much" is soo easy to build a platform off of that you will be DOA in elections if you manage any government that tries to invest like you say.
Investment restricted to "government responsibility foresight" infrastructure gets enough flac already. It only takes one down turn for the "golden goose" of the investment to be spent on the buddies of who just got into office
You can't trust politicians to just save money for the future. It will be abused by both sides. One side will gain votes by diverting it to something that has nothing to do with transportation, the other side will gain votes by repealing it and taking credit for lowering taxes.
I agree, it would be tough to implement, and I do not have an easy answer. Maybe something like a deposit-only account with a binding agreement on the earliest date the money can be withdrawn. No, I do not know how such a thing could be created in practice :). If it were possible, that would address the first issue, but not the second.
On the other hand it is more fair for the people using the new bridge to pay for it than for previous generations to pay for the old bridge and then keep paying for the new one which they will never see.
I consider infrastructure like bridges to be fundamental constructs of society, something we should build to promote the general welfare. I willingly pay for infrastructure today that will get more use by my children than I will ever see, and I think that is fair. My parents contributed to much of the infrastructure I am using.
There is a huge difference in being taxed to create and maintain infrastructure that you and your children will both use, and being taxed to fund future hypothetical infrastructure that you will never use.
I don't like that we as a country put off the costs of maintenance as long as possible thus creating debt for future generations, but asking the current generation to create a savings fund to pay the future generation's (non emergency) expenses is a bridge too far.
And that’s how we ended up with the selfish Boomer meme. Previous generations set them up for success. Rather than paying it forward, they kept those funds along with their own economic growth and left the rest of us in the lurch.
We did that here in Seattle, where we have the longest floating bridge in the world, SR 520 across Lake Washington: tolls stopped in 1979 after construction was paid off.
Alas, tolling resumed in 2011, to pay for the complete reconstruction of the bridge. This time we are probably stuck with it, since WSDOT has grown inordinately fond of tolling as a traffic-management tool.
This does require some legislative fortitude, however, to set aside the money for real and not just spend it on other things.