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[quote user="John WR"] [quote user="Sam1"]Whatever the country has spent on highways is, at least from an accounting sense, sunk costs. They cannot be taken back.[/quote] Actually, Sam, highway expenditures can be taken back if we wish to do so.  Governor Jon Corzine proposed that we sell the New Jersey Turnpike.  The legislature turned him down but it could have been done.  Today with EZ pass it is possible to put a toll on every single road in the country.  Once the roads are tolled they could be sold to private companies.  I do not recommend that we do this but it is possible and would allow us to recoup the value of our roads.  [/quote] The nation's highway expenditures are a sunk cost.  They cannot be reversed or wished away. How they are paid for, however, can be changed.  That is what Corzine proposed.  If the state were to sell a highway(s), i.e. the New Jersey Turnpike, the price of the asset would be the book cost of the highway, a sunk cost, plus any goodwill, which would reflect the profits expected by the buyer.  The book cost of the highway(s) would be transferred from the state's books to the books of the buyer. They would still be there.  I am not sure about the amount that would be transferred.  The land that the highways sit on is not depreciated.  I don't know whether the roadway, i.e. rebar, concrete, etc. is depreciated. Ultimately most of the users (taxpayers) pay directly and indirectly for the nation's roadways. What they don't pay directly as users, i.e. fuel taxes, excise taxes, vehicle and driver licensing fees, tolls, etc., they pay through income, sales, and property taxes. These generally flow into the general fund. To the extent that the direct user fees don't cover the cost of the nation's roadways, monies are transferred from the general fund(s) to the roadways fund(s).  And herein lies a hidden subsidy. In FY09, according to the IRS, 46 per cent of Americans filing a federal income tax returned paid no federal income taxes.  Also, according to the same data, 75 per cent of the personal federal income taxes were paid by approximately 12 per cent of filers.   Beginning in 2007 or 2008, due in large part because the Congress would not raise the federal fuel taxes, the U.S. began transferring annually between $8 and $14.7 billion from the U.S. Treasury to the Highway Trust Fund (HTF).  To the extent that the funds flowed from personal income tax payments, which are the largest single source of federal revenues, motorists who paid federal income taxes and upper income motorists subsidized motorists who paid no federal income taxes or paid less tax than upper income tax payers.  The average effective federal income tax burden in FY09 for a median income family was 7.71 per cent compared to 24.95 per cent for those with adjustable income in excess of $500,000. FY 2009 is the latest complete IRS data.
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