CONCEPTS OF COST FUNCTION AND INCREMENTAL SOLUTIONS OF VEHICLE-TAX-ALLOCATION PROBLEM

THE COST-FUNCTION METHOD OF HIGHWAY-TAX ANALYSIS WAS DEVELOPED TO ATTEMPT TO BRING THE HIGHWAY COST-TAX RELATIONSHIP INTO PROPER FOCUS. THE COST-FUNCTION METHOD ANALYZES ALL METHODS OF HIGHWAY CONSTRUCTION, MAINTENANCE, AND ADMINISTRATION AND SEGREGATES THEM INTO GROUPS ACCORDING TO FACTORS THAT ARE PREDOMINENT IN BRINGING THE COSTS INTO EXISTENCE. THE FIRST GROUP OF COSTS WHICH CONTAIN 10 TO 14 PERCENT OF THE TOATL COSTS ARE THOSE ITEMS WHICH ARE NOT AFFECTED BY EITHER MILES OF TRAVEL OR WEIGHT OF VEHICLES, SUCH AS BEAUTIFICATION, LANDSCAPING, AND SIMILAR ROADWAY IMPROVEMENTS. THE SECOND GROUP OF COSTS CLASSIFIED AS NONWEIGHT-USE COSTS ARE COMPRISED FROM 35 TO 43 PERCENT OF TOTAL COSTS. THEY ARE AFFECTED BY MILEAGE, OR VOLUME OF TRAFFIC, BUT NOT BY VARIATION IN VEHICLE SIZE OR WEIGHT. THE THIRD GROUP, CALLED WEIGHT-USE COSTS COMPRISE 45 TO 50 PERCENT OF TOTAL COSTS AND CONTAIN THOSE ITEMS AFFECTED BOTH BY MILEAGE OPERATED AND WEIGHT OF VEHICLES. THE USE OF TON- MILES TO ALLOCATE THOSE COSTS WHERE VEHICLE WEIGHT MAY BE ADMITTED AS A FACTOR TENDS TO OVERSTATE THE RESPONSIBILITY OF THE LARGER VEHICLES. USE OF THE COST-FUNCTION ANALYSIS HAS SHOWN GROSS INEQUITIES IN THE TON-MILE METHOD. IT IS CONCLUDED THAT THE COST-FUNCTION APPROACH WHICH TENDS IN THE DIRECTION OF THE INCREMENTAL METHOD IS A VALID APPROACH TO THE TAX-ALLOCATION PROBLEM.

Media Info

  • Monograph Title: Allocating motor-vehicle-tax responsibility by the incremental method: a symposium
  • Serial:

Subject/Index Terms

Filing Info

  • Accession Number: 00201569
  • Record Type: Publication
  • Files: TRIS, TRB
  • Created Date: Dec 9 1994 12:00AM