This Letter to the Editor appears in the May 20 print edition of Transport Topics. Click here to subscribe today.
Boston and America
The Boston Marathon bombing showed American courage and spirit as exemplified by the marathon runners, spectators and the first responders, who, rather than running away from the bombing scene, ran directly into it to help the injured.
Contrast that crisis response with the political effort to solve our chronic economic malaise. For the past five years, President Obama and congressional leaders from both political parties have not put in place or even proposed a viable, funded plan for growing our economy. Rather, they have defaulted to the Federal Reserve to prop up the economy by printing money. Consequently, America remains stuck in an economic ditch, wounded and weak: 7.5% unemployment, $16.7 trillion in debt, annual budget deficits, deteriorating infrastructures and world leadership challenged by China.
Our industry knows infrastructure investment to rebuild our crumbling roads and bridges would have a major impact on employment and consumer and commercial demand and thus propel the economy.
Bill Graves, president of American Trucking Associations, and Howard Abramson, publisher and editorial director of Transport Topics Publishing Group, have written and spoken eloquently and often on the need for infrastructure investment funded by increased fuel taxes (which I have favored also).
Recently, the Panel on 21st Century Freight Transportation of the House Transportation and Infrastructure Committee strongly supported infrastructure investment funded by increased fuel taxes or vehicle miles traveled (VMT) taxes.
Unfortunately, these funding proposals have not gained political traction. I think it is time we advocates of increased fuel taxes must reconcile ourselves to this reality and find an alternative funding mechanism. As my Nashville friend often says: “This dog won’t hunt.”
The great debate in America is between the conservative right, who favor austerity and no new taxes, and the liberal left, who favor tax increases and more debt. This debate has created a political impasse leading to uncertainty for businesses and consumers, disappointing job and gross domestic product growth and a financially weakened America — one where its political leaders run away from the problems in the economy while we have 12 million people out of work, 48 million on food stamps and 11 million on disability.
So where do we go from here? We need to devise a plan that moves the right and the left into the center by creating incentives for both to compromise. Such a plan would raise taxes from those most able to pay and utilize the revenue to create jobs, commercial activity and consumer demand to drive GDP numbers up so the benefits to the newly burdened taxpayers far exceed the taxes. The resulting job-focused economy would produce opportunities for all Americans to move up on the income ladder.
Research on job creation at the Political Economy Research Institute of the University of Massachusetts concluded that 25,000 jobs would be created for every $1 billion invested in infrastructure.
At my request, PERI calculated that uncapping the payroll tax for incomes of $500,000 and greater would yield $110 billion per year in new tax revenue. Using PERI’s job-creation research, investing the $110 billion in infrastructure would create 2,750,000 jobs, which would reduce the unemployment rate to 5.8% to backbone major economic expansion.
Summarizing, we members of the transportation industry know roads and bridges need to be rebuilt. We also must recognize that increasing fuel taxes to fund infrastructure rebuilding, although logical, is a plan for a future day.
Uncapping the payroll tax now for incomes $500,000 and greater will yield $110 billion per year. Using this source to fund infrastructure re-building will create 2,750,000 jobs. That will ignite a sequential economic chain of events that will reward high-income taxpayers handsomely, while benefiting all income classes of Americans.
If you agree with this analysis, call your congressman and tell him to run to the problem to make America strong again.
John A. Simourian
Lily Transportation Corp.