Income Payroll Tax: This is the direct payroll tax Oregon charges an individual income earner.
Inferred Income Tax: This is the payroll tax in excess that is spent on roadways, etc, that is then utilized by transit. This is an extremely small percentage, but since I’m attempting to be as thorough as possible, I’ve included it. I’ve used 3% since that is about the average budgeted over the last couple of years (excluding the massive bail outs, etc, from this year so far).
Federal Income Tax: This is the part of the income tax that is spent on transit, then the percentage allocated to Oregon and specifically Portland. Yeah, again, not that big of a number.
The Government Incurred Debt on My Behalf: This is cost that goes above and beyond the above collected taxes. This is the money the Government is inflating through the usage of uncollected funds, also known as “printing money” to spend. Which then we will owe at some point in the future unless the Government defaults on all the borrowed money. In the past it has been about 10% of what is already incurred via income taxes. This year (2009) we’ve incurred approximately $300 per person that will go to transportation, which I did not place below as I’m assuming it will eventually average out again in the future.
Fare Payments: This includes my monthly pass, any extra passes I had to buy such as when I forgot to get a monthly pass.
Totals
| 35k Yr Income | 45k Yr Income | 80k Yr Income | 110k Yr Income | |
| Income Payroll Tax (0.6718) | $235.13 | $302.31 | $537.44 | $739.98 |
| Inferred Income Tax (3% of 9.5%) | ($3,325) $99.75 |
($4,275) $128.25 |
($7,600) $228.00 |
($10,450) $313.50 |
| Federal Income Tax (15% of 3% of 25% to 28%) | ($8,750) ($262.50) $39.37 |
($11,250) ($337.50) $50.63 |
($20,000) ($600.00) $90.00 |
($28,400) ($852.00) $127.80 |
| Government Incurred Debt | $26.25 | $33.75 | $60.00 | $85.20 |
| Fare Payments | $1032 | $1032 | $1032 | $1032 |
| Totals | $1432.50 | $1547.04 | $1944.44 | $2298.48 |
Some of the things we can learn from this information. Nobody pays a full cost of their transit usage, not even the person making $110k per year. The extra costs are distributed among the other 90%+ of tax paying citizens, who pay at the rate above REGARDLESS of whether they ever use transit. The same situation of course goes for automobiles which I’ll cover those costs, out of pocket and taxes, in a future entry.
Looking at this though, it really makes one wonder what it would be like if we paid the actual cost of usage just within the city; LRV, Bus, Streetcar, at our current rate of tax & available disposable income it would be rough even for the 80-110k income earner to afford transit, let alone automobile transportation.
Stay tuned for more of this wealth redistribution for transportation story, I’ve got a lot more research coming down the pipeline.
Transit Sleuth 
[i]Looking at this though, it really makes one wonder what it would be like if we paid the actual cost of usage just within the city.[/i]
Well, there wouldn’t be cities, period. The last example we had of people paying their own way for transportation was the hunter-gatherer society. That was perhaps the last time we had a truly libertarian society.
Then again, all you needed in hunter-gatherer societies were nutrients. You really didn’t need a system of trade to ascribe values to the nutrients, a system of laws to tell people what was fair or foul, and a font of knowledge to make sense of it all.
All of the rest were added after the earliest forms of human organization emerged from agricultural societies. Only after a long process of wealth-building did you see the city form of organization emerge.
Sad to say, virtually all known record of city settlement, development and form were shaped by the sovereigns and their armies. In fact, cities created and shaped by means other than war represent an adolescent period of human history — we’ve only been doing it for a couple hundred years! Heck, noncolonial development is not even 100 years old yet!
So, to answer your question: Who knows for sure? We don’t have a recorded history of a purely libertarian city settlement. And many alternative developments tend not to endure.
To follow up, does it really matter whether every single person paid his or her full freight for transportation?
How would society change, for better or worse, if we do?
These questions defy easy answers.
"Well, there wouldn’t be cities, period."
If we paid usage it would do exactly what congestion pricing and other notions would do. It would require that people make more conservative (function, not political) choices about fuel usage, distance from work, etc. It would almost incur a natural growth for cities. I don’t see how that would create no cities.
Suburbia under it’s own costs would die in short order. Most of it was built at a very heavy price and enabled via indirect and direct wealth reallocation. Rural areas are not, generally, and cities often produce vastly more wealth and taxes than any suburban area ever will. So again, all trends I could imagine would do well for rural and urban areas and real Libertarian landscapes would be devoid of suburbia in the sense we know of it today.
So the statement, "There wouldn’t be cities, period", I’m not following – and honestly, I’m not sure how you see that pan out. Example? I’m honestly curious.
[i]If we paid usage it would do exactly what congestion pricing and other notions would do. It would require that people make more conservative (function, not political) choices about fuel usage, distance from work, etc. It would almost incur a natural growth for cities. I don’t see how that would create no cities.[/i]
There are very few examples of successful "green eyeshade" settlements. There have been along the toll highways in Texas, but they are all big amoebalike exurban subdivisions with 30+ mile commutes. Probably not the example you seek.
Personally, after witnessing the Great Depression II, I have very little faith in the ability of the American people to make conservative choices, period. It wasn’t until winter 2007 when people "got it" about credit and loans. If it hadn’t been for the recession, you could have put in toll lanes and charged $4+ for gas and people would have kept putting them on their credit cards.
As for "natural growth" of cities, this assumes that human behavior is perfectly rational to the point of being mechanistic. It’s not. For instance, you pick up a copy of the Economist and most writers would rather get a prostate exam from Freddy Krueger than to do business in Paris — yet it remains an economic dynamo. It not only carries itself, but the rest of France as well. Plus, what sets Paris apart is its Paris-ness. It’s special because it offers an experience that cannot be replicated elsewhere.
Rationally, Paris should fail, but it has so many other factors going for it that it keeps going. However, while Paris keeps going, the stagnation it experiences is deflected onto smaller cities.
The same is not as true for Germany, which has a federal system similar to ours. That seems to have lent itself to develop several dynamic regions (Berlin, Munich, Stuttgart, Frankfurt). In the Netherlands, you had something else very interesting develop. You had Amsterdam and Rotterdam, and then the dynamic economic activity spread outward to the point where both cities are connected by a dynamic "ring".
The same "ring" happened in Southern California, as Los Angeles and San Diego met in the middle and urbanized Orange County. I’m not holding up Orange County as a model for the planning you seek, but it does have several dynamic economic units (Anaheim’s resorts, universities in three cities, a government center in Santa Ana, a cultural center in Costa Mesa and a central business district in Irvine). There is an upside: All of this is connected to Los Angeles and San Diego by train — the nation’s second-busiest rail corridor!
The problem, though, is that these developments don’t follow any sort of logic or any master plan. I think Jane Jacobs was right in that it was people coming together that made things happen.
[i]Suburbia under it’s own costs would die in short order. Most of it was built at a very heavy price and enabled via indirect and direct wealth reallocation. Rural areas are not, generally, and cities often produce vastly more wealth and taxes than any suburban area ever will. So again, all trends I could imagine would do well for rural and urban areas and real Libertarian landscapes would be devoid of suburbia in the sense we know of it today.[/i]
Again, I would not be too quick to write off suburbs so fast, either. Although suburbs came to being because of human choice — one that will likely turn out to what J.H. Kunstler calls "the greatest misallocation of resources in history" — what will affect suburban vitality will be what affected other cities in history. In other words, it won’t be rationality, but great events and how people adapt to them.
Why did cities die? Before World War II:
1. Warfare. Invaders either sacked a city or empires subordinated cities to supply regions or dependencies (garrison towns, granaries, etc.).
2. Pestilence or famine wiped out a large part of the population, with too few remaining people who could restore the skills or trade connections.
3. Resources that made the cities wealthy were exhausted. (Europe suffered through a precursor of Peak Oil when wood had been overconsumed. The economic landscape shifted to the cities that were able to leverage coal power.)
4. Trade shifts. In the U.S., the growth of international trade occurred mostly in the Sun Belt and along the West Coast as Asia and Latin America became increasingly important. This is good news for the Pacific Time Zone and the Gulf and South Atlantic states, but cast a pall along the North Atlantic and the Great Lakes states, as trade growth slowed between North America and Europe.
One of the other great trade shifts that had happened — and is particularly telling for Americans — is the first half of the last millennium. You had a sort of Jihad vs. McWorld, only the roles were reversed. The tribal, superstitious backward terrorist savages were the Europeans. The enlightened, economically powerful and dynamic region of the world was in the Middle East, especially around the Mediterranean. Small, emerging European powers decided to explore lands little known to them in Africa and across the Atlantic. Then the game changed to what we have known since the Enlightenment. The effect on the Middle East has been to become insular, tribal and militant.
See a similar pattern emerging anywhere, Adron?
Now World War II had a profound life-change in America. One thing we had seen was a large segment of society beginning to abandon a city just because they felt like it. There are several theories as to why this happened, but this post is long enough as it is and makes for fascinating discussion on its own.
The U.S. cities went into decline even though most cities had not experienced three of the four "horsemen". The U.S. has had several cities become ghost towns as resources became exhausted or agricultural land became barren.
Suburbs didn’t extend wealth outward. They just took city wealth and moved it to the side. Land area expanded exponentially but wildly out of proportion to economic output. As economies expanded, so do city boundaries. Only with American suburbs, boundaries moved faster than output. First the people left, then they took their wealth with them. So we left perfectly useful cities to rot by choice. And with a vacuum of other economic activity, the most malignant criminal elements filled the void.
Then cities came full circle. The earliest re-emergence came in the "Richard Florida" cities, where young and creative people became fashionable and made cities interesting. Then major commercial enterprises came back.
Yet cities are still seen as places too scary and forbidden for children and their parents. This attitude has not shifted. So suburbs will still have their place. Older suburbs are going into decline as part of the housing filtering process. Newer suburbs may end up becoming the HUD homes of last resort, fall into "methburbs" or …
So the same may happen to suburbs as has happened in cities. If I were to try to analyze suburban health, I would ask:
1. What makes the suburb unique? History, economically advantageous location, natural or cultural amenities, etc.?
2. How close are you to your metropolitan area’s central business district?
3. How easy is it to get around the area by transit service? By bicycle? Walking?
4. What is the generational turnover? Do families leave when the kids are grown up, or are the families close-knit? Will the children take over homes?
5. What is the economic make-up of the area? Are too many people reliant on the same company or industry for income? How many different economic industries does the region support?
I’ve always had problems with the notion that somehow transit has to be looked at as some sort of profit/loss notion.
The military budget doesn’t get that scrutiny, nor does the Police, Fire, etc.
But somehow transit is supposed to be "cost effective"?
It’s a public service and needs to be subsidized, period.
Even if transit doesn’t have to meet some "profit/loss" and it can be considered a Government run and owed "right" to the populace as a "service" it STILL has to PAY FOR itself. Nothing can exceed the budgets they have without destroying operations except for the Federal Government & Federal Reserve, when they exceed budget too often they can prospectively destroy the US and many nations with the downfall.
…so ok, maybe no profit, but it can’t be run in the red.
…however, back to the point of this entry, I did this to have some working numbers with justifying transit as either
A: a service
B: something that is inexpensive
C: a bad idea of wealth redistribution by services and
D: suggest alternate ways to make transit authorities/system more responsible financially, economically, and in turn environmentally to the taxpayer & citizen of the United States.
Adron, you forgot that TriMet also assesses a property tax to cover interest payments on the MAX bond issues.
Ah, I did forget that Eric. Do you have any links or anything to more information? I’d love to see what that amounts to.