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Sales Tax Increases for Public Transportation?

The Triangle Business Journal (3/25) reports a survey conducted by the Regional Transportation Alliance, which finds “Residents of Wake, Durham and Orange counties (in North Carolina) might be willing to support an increase in the sales tax to pay for new or expanded public transportation.”

Most interesting to me is how the political acceptability of sales tax is intertwined with that of others. A sales tax increase (for example, at the rate of a half-percent) becomes more palatable when residents consider “higher property taxes to pay for public transportation” to be “deeply unpopular locally.” On the other hand, voters are more likely to support the sales tax plan if it came along with an increase in ridership fees and housing and development impact fees.

Sounds we can develop an interesting “economic theory” about political feasibility of revenues. For transportation purpose, sales tax increase is a “substitute good” to property tax increase while being a “complementary good” to a higher level of user fees.


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