Chapter

“Transportation by Taxation”

Paul Sabin

in Crude Politics

Published by University of California Press

Published in print December 2004 | ISBN: 9780520241985
Published online March 2012 | e-ISBN: 9780520931145 | DOI: http://dx.doi.org/10.1525/california/9780520241985.003.0008
“Transportation by Taxation”

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This chapter concentrates on transportation finance. The enormous energy demands of the motor vehicle revolution prompts the central question of this chapter: Why did highways replace mass transit so completely and so rapidly in California? California imposed two gasoline taxes and increased motor vehicle registration and license fees in the 1920s. The gasoline tax and motor vehicle fees supported a wide-ranging governmental enterprise that, after education, constituted the largest single expense in the California budget during the late 1920s and the 1930s. The political impact of California's new financing program equaled the financial benefit of eliminating interest on bonds and enabling long-term financial planning. As with railroads in the nineteenth century, government assistance developed the highway network in ways that private capital never would have supported. Federal, state, and local governments directly subsidized highway expansion and granted generous tax exemptions to the “public” roads.

Keywords: transportation finance; taxation; highways; California; gasoline taxes; motor vehicle fees; license fees; railroads

Chapter.  8166 words.  Illustrated.

Subjects: History of the Americas

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