Free-Market Solutions for Road Funding

As Americans hit the road during summer driving season, one thing that’s probably not on their minds is how the maintenance of those roads gets funded.

Over the past century, when consumers stopped to fill up at gas stations, they also filled up state and federal government highway funds through excise taxes, consumption taxes (which are included in the price of goods), and motor-fuel taxes. Now, as technological advancements and changing consumer habits work hand-in-hand to reduce the volume of motor fuel purchased, government infrastructure budgets have become increasingly strained, prompting lawmakers to increase tax rates.

Instead of trying to retain the status quo by increasing taxes on declining motor-fuel sales, now is the perfect time for legislators to experiment with fairer funding ideas — using common-sense, free-market principles as a guide to road-funding success.

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