Monday, January 21, 2013

Discuss the economic reasons for subsidizing public transport and taxing private transport.

There are a number of reasons for subsidizing public transport and taxing private transport. On a global and ecological level, it is beneficial to the climate because it reduces carbon emissions, but on an economic level, there are numerous benefits.
First, it provides a ready means of free or cheap transport for low-income individuals to help them access work or shopping that helps to stimulate the economy. Additionally, it reduces traffic and congestion, which in turn allows for smoother transport, provides safer travel for people at large, reduces wear and tear on roads, and provides less traffic for distribution and shipping companies. These benefits and others make it a financially beneficial option for transportation in addition to it being ecologically friendly.


There are several reasons why the government might choose to subsidize public transport in order to help the economy. One of those reasons would be to provide lower-income individuals the ability to both find and keep jobs. In turn, these individuals would then have their incomes taxed, providing revenue for the government. Jobs would mean less spending by the government on social programs such as food stamps because the citizens would have the means to provide for themselves. It would also mean that more money would be put into the economy through individual spending. Public transport would allow people from all walks of life the ability to get around the city in a cheaper manner, and the money that each citizen had been spending on gas and upkeep of their private vehicles would then be put into the economy through other personal purchases.
Taxing private transport would help to pay for repairs to current roads and the building of new ones. This would create jobs, as it takes manpower to build infrastructure. These jobs would not only provide taxable income, it would also provide a means for people to make purchases. The additional purchases would help boost the economy. If private transportation taxation was to be based off of a car's fuel economy or carbon emissions, it could encourage private vehicle owners to turn in their older cars and buy newer, more fuel-efficient ones. This would boost the economy as well as provide additional tax revenue that could, in turn, be put back into communities.

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