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TAX NEWS - 2010

Mineta Transportation Institute Releases Results from National Survey About Public Support for Federal Transportation Tax Options

Americans Say They Would Support a Transportation Tax If It Were Linked to Environmental Benefits
SAN JOSE, California -- The Mineta Transportation Institute (MTI) has just released What Do Americans Think about Federal Transportation Tax Options? Results from a National Survey. The survey, conducted from April 27-May 22, 2010, tested national public support for sales, gas, and mileage taxes that would raise revenue for transportation purposes. Researchers presented multiple variations on the mileage tax and gas tax concepts to test relative support levels among the different options. Among other findings, the telephone survey showed that linking a transportation tax to environmental benefits can strongly increase support. In 2008, MTI completed a similar study of Californians' opinions, which showed comparable results.

The primary researchers were Asha Weinstein Agrawal, PhD, director of MTI's National Transportation Finance Center, and Hilary Nixon, PhD, an assistant professor in the Department of Urban and Regional Planning at San José State University.

The survey was completed by 1,545 adults 18 years or older, speaking in either English or Spanish. The survey questionnaire presented eight tax options, including a flat-rate mileage tax, a mileage tax with a rate that varies by the vehicle's environmental performance, several versions of a gas tax, and a sales tax. None of the options received majority support, but three did fairly well, with support levels around 40 percent. The most popular were a half-cent sales tax (43 percent support), a ten-cent gas tax increase whose revenue would be used for projects to reduce the transportation system's impact on global warming (42 percent support), and a ten-cent gas tax increase spread over five years (39 percent support).

The survey also compared public support for alternative versions of the mileage and gas taxes. The "base" cases tested against alternatives were a flat-rate mileage tax of one cent per mile and a ten-cent gas tax increase with no additional information given. All variants of these base cases increased the level of support, some significantly. The option of varying the flat-rate (base) mileage tax by the vehicle's pollution levels increased support by a strong 12 percentage points. For the gas tax, all four variants to the base case increased support as well. Most notably, spreading the gas tax increase over five years increased support by 16 percentage points, and linking the increase to reducing global warming increased support by a full 19 percentage points.

The report offers two policy recommendations based on the survey. First, linking a transportation tax to environmental benefits can strongly increase support. Support for the mileage tax rose significantly when the flat-rate tax was converted to a tax with a rate that varied according to the vehicle's pollution emissions. The increase in support for a gas tax was even more striking when respondents were told that the revenues would be spent on transportation projects to reduce global warming.

Second, the survey results showed that the very low support levels for a one-time gas tax increase can be raised by modifying how the tax is structured and the way it is described. Linking the revenue to environmental benefits is one good option, and spreading the increase over several years is another.

The survey has a margin of error of plus or minus 2.5 percentage points at the 95 percent confidence level.
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