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Impact Of Congestion Taxes

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Economics

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California State University San Marcos

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Implementing Congestion Tax in a City cannot Improve the Surrounding Cities

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Implementing Congestion Tax in a City cannot Improve Surrounding Cities

The main purpose of congestion tax is to use the revenue to try and compensate users of a

highway (Small, 1992). As much as previous studies have indicated that tolls are retrogressive, the

transport policy does not find ways that they can link the retrogressive nature of the congestion taxes

to fairness and justice problems regarding road use (Schweitzer and Taylor, 2008). When congestion

taxes are implemented in one region, they do not improve the welfare of surrounding cities.

Some experts argue that if people are required to pay congestion fees, the low-income urban

residents will carry a huge financial burden. But the issue with this argument is that all kinds of

people use highways and that if people do not pay money for the maintenance of highway

infrastructure through this tax, they will have to pay for it through an alternative means like the sales

tax. If the sales tax is used it means even the people who do not use the roads will have to pay for

them and no matter the economic status of an individual they will have to pay equally for the

maintenance of the road (Schweitzer and Taylor, 2008). The introduction of congestion taxes

discourages highways and road use.

According to Small (1992), one critical issue regarding taxes is their use and purpose other

than simply their collection. For instance, congestion taxes should be used in the area that they are

collected in if the area is to fully benefit from their use. If this is not the case, then the other cities in

the region will experience an improved welfare from this tax. Schweitzer and Taylor (2008) suggest

that the drivers in the region should be allowed cost savings for good behavior such as

environmental consciousness. Therefore, the implementation of the tax in a city in a region cannot

improve other cities in the region.

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1 Implementing Congestion Tax in a City cannot Improve the Surrounding Cities Student Name University Course Professor Name Date 2 Implementing Congestion Tax in a City cannot Improve Surrounding Cities The main purpose of congestion tax is to use the revenue to try and compensate users of a highway (Small, 1992). As much as previous studies have indicated that tolls are retrogressive, the transport policy does not find ways that they can link the retrogressive nature of the congestion taxes to fairness and justice problems regarding road use (Schweitzer and Taylor, 2008). When congestion taxes are implemented in one region, they do not improve the welfare of surrounding cities. Some experts argue that if people are required to pay congestion fees, the low-income urban residents will carry a huge financial burden. But the issue with this argument is that all kinds of people use highw ...
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Tags: Transport Policy Implementing Congestion Tax Improve the Surrounding Cities use the revenue compensate users