No Light Rail in Vancouver!

Automobility and Low-Income Workers

Jun 1

2007

Someone recently brought to my attention a 2005 article published in the Washington Monthly, a magazine that used to call itself “neoliberal” before the neoconservatives gave neos a bad name. Anyway, the article in question is called Auto-Mobility: Subsidizing America’s commute would reward work, boost the economy, and transform lives.

Flickr photo by VirtualEm.

The thesis of the article is that driving a car is no longer “a lifestyle decision.” Instead, Americans drive because “to get to work, the vast majority of Americans have to drive.” Thus, the writer argues that Congress should change tax policy and allow commuters to deduct the cost of their driving from their taxes, and, further, that 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.”

The author of this article, Margy Waller, is a dyed-in-the-wool liberal excuse me, progressive who worked on poverty issues during the Clinton administration, has a progressive blog, and leads a Mobility Team whose aims include (among other things) promoting the “acquisition and ownership of private automobiles for low-wage workers.”

Here is a perfect example of Ronald Reagan’s famous quip about government’s view of the economy: “If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

We tax auto driving (and some progressives would say not enough) and (thanks to progressives) divert a huge share of those taxes to mass transit and other non-highway activities. We regulate driving, as when the EPA imposes dozens of different gasoline formulas on different parts of the country, which is one of the major reasons why gas prices are so high today (because when local shortages take place companies can’t substitute fuel from another state).

So, having taxed it and regulated it, now the progressives want to subsidize driving. And not just for low-income people, but for the middle-class as well (perhaps sensing that programs that help low-income families can’t get approved unless they also benefit the middle-class majority).

Here is the problem the author is trying to address: Poor people tend to live in central cities. But most new job growth is in the suburbs. Transit doesn’t work to get inner-city people to those jobs, so they have to drive. So, since low-income families tend to have the lowest rates of auto ownership, they need help from government in getting their first cars.

The last part — that the government should help low-income workers get cars — is where libertarians and progressives part ways. I am all for helping people escape poverty, but government is not the road for them to follow.

First of all, cars are cheap. I have a car that I bought new 21 years ago. It has almost 250,000 miles on it, but I am confident enough that it is going to go another 50,000 miles or so that when I recently had to replace the tires I got the kind with the 80,000-mile warranty. If I sold the car today, I would be lucky to get $500 for it; $300 is more realistic.

Gas prices may be high today (though they are falling), but my car still gets 35 mpg, so that’s not a big deal. Anyone can buy a low-priced car that gets pretty good gas mileage if they need one. So I am not certain that the cost is really the obstacle.

The U.S. Department of Transportation grants money to anti-poverty groups that they can use to give low-interest loans of up to $4,000 to low-income people to get a car. I talked recently with someone from one of those groups. He said the main problem many low-income people have is that their credit ratings are terrible and so they end up paying 30 percent interest on credit cards and other debt. Many people, he said, don’t even know they have a credit rating and don’t know what interest they are paying on their debts. His big job is not giving out loans but educating people about credit, interest rates, and debt.

This says to me that the obstacle keeping low-income people from driving to work (if there is one) is lack of education, not money. Our schools have failed to prepare people for the basic knowledge they need to live in the day-to-day world. Commuter tax credits are not going to solve that problem.

Instead, the proposed program of tax breaks and tax credits will mainly end up benefitting people who are not really low income. Recent college graduates, for example, may have low incomes at the moment but many are about to embark on careers with lifetime expected earnings of millions of dollars. They will gladly take any subsidies Uncle Sam gives out so they can buy a Mini Cooper or whatever is the latest fad car.

People who care about helping low-income families out of poverty should concentrate on removing government obstacles to social and geographic mobility.

• Why are our schools so rotten in inner-city neighborhoods? Not because we aren’t spending enough, but because of government-run monopolistic schools.
• Why do inner cities have so much congestion? Because too many cities have decided to invest in bike paths and light rail rather than increase roadway capacity.
• If jobs are moving to the suburbs, why can’t low-income people move to the suburbs too? Because, in too many places, government planners have driven up housing costs.

Solving these problems will do far more to help low-income families than creating tax credits for commuters.

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Reprinted from The Antiplanner