T.N.T. TAX
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TRANSPORT
By Lieut.-Col.
)'Gorman, C.B.
The Author of This Striking Article is Well Known as One of the Staunchest Advocates of Transport by Road and He Makes Out an Excellent Case for the Cessation of Taxation on One of the Most Important Tools of Industry
Motor-vehicle Users Were Taxed in 1939 at Such a Rate That in Three Years They Would Have Contributed Not Only All Road Costs but Sufficient to Build 2,000 Miles of Those Special Motorways for which Appeals are Made THIS article may well commence with a quotation from "The Economist "; "War destroys to-day's output—not to-morrow's. The power to produce will remain in the labour, land, capital and skill." We must remake the good things wrecked by war, as soon as we can after it, and this depends on the full employment and efficient use of our tools of production
— motor vehicles being prominent amongst them. Britain can catch up again because of the great wealth-creating power of our modern tool equipment. Tools will not do this, however, unless used to the full. They will not be fully utilized if we continue any practice of penalizing and taxing the use of the most far reachingof them all — the motor vehicle. , It is a mistake to tax for revenue any kind Of transport or any other tool of production. Taxes of this type have always been bad. They do not add to national revenue,, they decrease it and they soon discourage employment.
Transport is a Tool Which Assists , in Creating industry and Wealth
The mechanisms of transport, whether railway, bicycle, barge, cart or motor vehicle, are tools with the key job of bringing things and persons from where they are to the places where they are most wanted. In the new positions the goods are worth more. Wealth has been created. The pre-war demand for motor vehicles at the rate of 500 a week, indicates that this tool was appreciated and sought by industry. To tax it not only limits the scale of motor manufacturing and makes the product dear, but bottlenecks the many industries and, businessqs that call for its services.
, The President of the Board of Trade said., according to " The Times," that he had examined 52 industries:— " I am exploring, industry by industry, to. find where there are bottlenecks that the Government could assist in breaking." He should. discover that road transport is a bottlenecked industry, dare to free it of taxation and give it safe roads. If he does so he will quicken the Nation's turnover, employment, output, profits and revenue—these will all be as urgently wanted for recovery as they are to-day for war.
The technical aptitudes of motor vehicles, when freed from shackles and made safe, can help to this quickening of wealth by prompt transport more than can anything else. It is not negligible that they average a twentyfold greater promptness of delivery from door to door than the aver:age movement of all England's loaded railway freight wagons—viz., a JO m.p.h. average against an 0.5 m.p.h. averageJ-F-11
The better performance, of course, must be paid for, but the quicker and more convenient delivery has bpen proved by years of trial more than to balance the extra cost of using motors for that large range of commodities that are called "the cream of the railway traffic." This is confirmed by the high demand for motor vehicles by business interests. They were entitled to expect that the State, in the long run, would act no less loyally by road motors than by other mechanisms of distribution— trains, barges, bicycles, coastal ships and carts, which are not taxed for revenue, nor ever should be. That we should have kept on with the taxing of motor vehicles (and of them alone) 'must be ascribed to a hangover from the earliest days of the motor pioneers, when thosewho resented the resulting dust ascribed their annoyance to a luxurious toy which they, quite unjustifiably, supposed to be manned by rich youngsters complete with cigar, chorus girl and a lust for speed. [The pioneers I knew must indeed have been totally concealed by the dust cloud !I Motors have good points and bad—the good have been but little publicized, as against much misrepresentation. Their demerits owe their high relief to the use that official propaganda has made of this prejudice. It was invaluable for distracting public attention from the blind road policy that lost us the world lead in the motor industry, worth £60,000,000 a year to the U.S.A.
That policy took millions of money from motor users as such and diverted it from being spent on making roads fit for the Nation's growing road traffic. Throughout the same period it shirked the duty of instilling habits of orderly and foreseeable movement on the most numerous category of road users—pedestrians. It was easier for a Minister to ascribe the ensuing accidents to the "human factor" of the whole population and, illogically, to advance this as a reason for not doing his duty—which was to create the safe road plan !!-'24 and ensure proper control of all road users.
" The more roads they have, the more they make accidents " was the incredible excuse made in his Budget speech of 1929 by a Chancellor of the Exchequer to justify a cut in road expenditure. Motor taxes flowed most richly into the revenue when Treasury influence had over-ruled the largest number of improvements asked for by highway authorities, county surveyors and others who understood their job.
It is not to be denied that Parliament desired the roads to be sufficient for the traffic, but there were two ways of seeking this result. The had way looked cheaper. It was to discourage traffic by motor taxes in the hope of reducing it to fit the old and inadequate roads.
Some years before the war there were great motor-tax returns and Parliament agreed in 1935 that an extra £100,000,000 should be spent on•roads; that would have been a restitution of much that had been taken in the past as motor taxes. No one is able to quote when or in what words Parliament cancelled its derision, we know only that 85 per cent. of this great sum was never authorized by the Treasury and was not spent.
Some of the Reasons for the Discriminatory Taxation of Motors
Discriminatory taxation against motor vehicles probably began because a kindly public reacted against dust and road accidents-. The people meant well, but, as is the way with crowds, they took an emotional line —thoughtlessly echoed in Parliament. They could take no other, because no scientific research had been ingtituted into the relations between accidents, traffic flow, road pattern and economic values. " Skin the road hogs ! " conveys an emotion incompatible with giving them better roads. There was also a spice of jealousy, under an umbrella of esthetics, which cried: "Here's something new; it is a pity to make our world ugly; heave a brick at it ! "
It proved to be a ton of "bricks," 'which amounted latterly to a burden of about £97,000,000 in a year
(which, but for the war, would have risen to some £104,000,000 in 1940) on a little population of 3,090,000 motor users—that sum is £40,000,000 a year more than the peace-time totals of our .annual road costs—and is entirely additional to all normal, and some abnormal', restrictive imposts.
The amounts taken for revenue from road transport were contrived by the indirect process of throttling road expenditure. The disallowed schemes of highway authorities bear testimony to this. The direct result is that one of the richest and most crowded industrial nations in the world runs its traffic on a dangerous and inadequate road system. The injury done to all trade by impairing for years the promptness, economy and safety of door-to-door transport is immeasurable. It has also been an underlying cause of most of the 300,000 road casualties which we experience in a bad year.
It has been said that some anti-motor interests had the bright idea of leaving the 'road plan unmodernized, so that congestions might accumulate delays and favour rival means for transport. It is to be hoped they had not read Sir Henry Maybury's 1927 report that the number of road deaths was intimately related to every increase of congestion, whether at rush hours or normally. Inevitably the accidents mounted up and the Minister of Transport jound himself hard pressed tp deflect blame from his failure to provide safe' roads. Attack is the best defence. He made great publicity and spent road moneys to ascribe the responsibility to the "human factor" of road users, class hy class in turn. Eventually he accused the whole Nation. Every advertiser 'knows that the ordinary person, in or out of Parliament, easily succumbs to persistent propaganda. So it befell that opinion tolerated the denial of roads to so naughty an industry. People said :—" We will not create race tracks for the owners of lethal machines to exercise their lust of speed." Every implication of this formula is misleading and its outcome has been cruel to persons and pernicious to the Nation's interests.
Road and Rail Transport Cannot be General Alternative Means
However, a nigger peeped out from the wood pile. The general deception of the public was turned to account. The idea was to hamper traffic by road until traders switched their freight on to the railways, while calling for a "square deal" and co-ordination of transport." The dodge failed, because two systems of such widely different performance and flexibility could not possibly provide a 'general alternative one for the other. Here is a parable: In Bucolia they use oxen. Once upon a time a Governor forbade that any man should use a bicycle to convey things, saying : "Let him wait till an oxcart is going his way. That will relieve the roads and it provides alternative transport ! " Those peasants who owned the oxc.arts were wont to smile as they counted the fees, and say : "Let -Us drink to the Governor and to his square deal for oxcarts. The dear old nut calls it co-ordinating ox and bike transport." The analogy is not, however, quite lair to the oxen. They go at 2 m.p.h. from door to door, whereas our railway freight wagons average half a mile an hour.
Few people and fewer motor users realized that slowness induced by congestion went hand in hand with increasing accidents. They surmised that slowness,
however caused, might be safe, so no one objected. Those interested in impeding the useful performance of motor vehicles were probably not aware of how very slowly eat average freight wagon moved. If bad roads and congestion could have retarded the motors to 0.5 m.p.h. their use might well' have dwindled until the traffic fitted the existing roads. But that could not be., Even in congested London the average motor speed fell to only 10 m.p.h. (and 8 m.p.h. in the central area). (+)
Shrewd business men who know that all industries have their urgent occasions also know that slow transport is dear transport. So those who can afford it pay the taxes and suffer, but continue to use motors wherever they can.
Many Grave Problems Have Resulted from Penal Taxation
For all that, the bad effect of taxing and curtailing road transport remained to reduce the national wealth, to make the roads perilous and, later, to limit our early war effort and output; moreover it failed to improve the price of railway shares. It took £43,000,000 a year to start the rising. market. The taxation of motors wasted the worker's time in congested travelling. His daily journey to his job cost him more. The impaired mobility of labour tied it down•
more closely to its locality. It was art inducement for people to crowd into houses as near as possible to their jobs, thus it intensified urbanization. It accented the isolation of distressed areas and impeded their recovery. It made the starting of new businesses more difficult, in so far as it caused them to require bigger stores and more working capital. It retarded the turnround of ships and weakened our competitive export
-power.
Of the 39,000 townlets and villages in this country, we have 31,300 with no railway station. Their interchanges might each be small, but they could be numerous. They looked to the motor and the roads. They had to. But when these were penalized their trade could not prosper. Energetic young people naturally quitted the countryside to avoid being marooned in it. Perishables like fish, fruit and vegetables rotted uneaten because prompt road transport was absent or too dear. These good things could become wealth only if taken promptly to the consumers' houses along the roads. Trains could not do it. Motors could, but they were taxed until they did not to anything like the desired extent.
No factory, farm, harbour, business office, quarry, rail way station or other centre of productivity can yield its best unless workmen and goods can readily and cheaply get there by road. For national recovery we shall need their best yield. Of course we want our good railways, we even want them better managed and relying less on political wire-pulling, but we especially want a fully adequate road plan and road service. "Tax no Transport !" is a fair slogan.
Look around the world and obserVe that our total mileage of roads is much less, for the traffic on them, than that of any other industrial country ( +4) in Europe.
This inadequacy shouts at you from every congestion, traffic hold-up, danger sign, constriction and accident.
Besides our faulty road plan, our deficient nameplating of streets, our bad roundabouts, our neglect of pedestrian subways, our narrow streets, etc., all increase vehicle delays, their mileage and wear of roads.
Hardly appreciable road wear is due to the uniform rolling of pneumatic tyres on smooth surfaces—and our roads are very smooth. What causes much wear on them is the accumulated rubbing by perpetual brakings, swervings and accelerations which motor drivers must carry out by reason of the innumerable bends, cross junctions, constrictions, crowdings and devious routes of an unredeemed road pattern. Why should motor users pay for this road wear? It is not they who are responsible for the continuance of such road defects. They neither control road expenditure nor direct the layout, although they pay £40,000,000 a year more than • the total road costs.
Compare with this the way the money is spent on the permanent way of the railways. This is la,id out for
teli.e direct purpose of profitably working trains with the
Mast avoidable waste of coal, tyres, rails and time, and with the minimum of risks; it is far otherwise with expenditure on roads. Any road moneys not diverted to the Treasury are controlled by those who pay highway rates as property owners. Ratepayers elect highway authorities who cannot be reproved for having higher _regard for the just interests of their electors than for the costs of road transporters who mostly come from else where. Their conscience, although often sensitive about the local accident record, is not at all quickened by the cost of the ton-mile, or the wear of tyres, the waste of fuel or the loss of profits to the motors users.
Here is a recent example, a straw to show the wind : No public Order had been made against surfacing any roads with sharp flint chippings that have been destroy
ing rubber tyres for 40 years. When the rubber shortage came in 1942, the Minister suddenly showed concern and issued the Order, but motor users had been suffering all along from excessive wear of tyres.
The difference 'between the disinterested official control of roads and the interested private control of railways
makes rubbish of the analogy by which we are told that motor vehicles should be taxedto the extent of their road wear because railways pay for the whole of their rail wear. The cases are widely different.
Diversion of Taxation Proceeds Has Robbed the Nation of Motorways
Motor owners were -taxed in 1939, before the War, at such a rate that in three years they would have contributed not only all road costs, but enough more to have paid for 2,000 miles of motorways costing £120,000,000. These would have reduced the running costs of their through traffic by 40 per cent. and have reduced the road wear by some important amount. The County Surveyors' Society has asked for motorways, and this was endorsed recently• by the Institution of Municipal and County Engineers; the premier group of motor users has asked for motorways, the Parliamentary Delegation to Germany made the same request, but the result so far has been nil.
Here is a paradox: It is never possible so to tax a productive machine or operation that the vendor of the product shall not increase his charges pro tanto to his clients. He thereby passes on the tax to the public— nevertheless his business is damaged by it—fewer motors are sold, therefore production is less, consequently they are more costly to manufacture, the running costs of road transport are put up, the turnover of freight is diminished, and it becomes more costly to carry. The vehicles are not only dearer, they are distorted in design
to meet the, tax formula. They become less acceptable for export, on the scores of both price and design. At every stage of this .descent, output and profits are reduced, and, therefore, the revenue suffers.
, Not only the motor user and the revenue suffer. This taxation of £97,000,000 is no trifle. It is distributed over the public. If is badly and unevenly allocated and not according to ability to pay. It is wrong to tax the population in proportion as individuals or businesses happen to be domiciled farther away from _untaxed .transport, i.e., from a railway station. The tendency to crowd near to a station is thus accentuated. This is the tendency that makes for urbanization and for quitting the country-side and agriculture. Apart from this, uneven taxation lowers'the standard of living more than if it were justly distributed according to ability to pay.
These considerations are not small when we realize that they are persistent. They would not be deemed small if we .were to ask Parliament for an income tax to produce an extra £97,000,000 a year—more fairly distributed, perhaps, but the burden would not be. considered-as negligible.
The Greater Use of Suitable Highways Would Enrich the Nation Truly, roads are a great public property, but, of
themselves, roads are inert and costly even when unused. A good part of their maintenance cost is due to land movement, to the .effects of sun and frost and to vegetation. It is only by being utilized that roads acquire their value and enrich the Nation. That enrichment accrues in the better accessibility to riparian property given by the road users-l—a fact recognized in the past by the incidence of highway rates.
Every road user contributes to this creation of value— save only in one case, viz., when his 'behaviour impedes the fruitful use of the road by blocking the vitalizing flow of traffic afoot or awheel. This often occurs.
There are road users who bring to fruition the road asset of the Nation and others who diminish this gain— mostly by being stationary or slow moving, unforeseeably or obstructively. The former create road value, the latter absorb it. If anyone, other than the real beneficiaries, should contribute to road costs it is certainly those who absorb road value, not those who create it. In truth, the population at large does so, in its status as pedestrians, by' calling for limitations of speed, beacons, surface croSsing lanes, by unforeseeable movements into the carriageway, by the use made of the electric, gas, water and other underground conduits', the road trenches of which impede the traffic. The Nation thus absorbs the road value and should pay the road costs, or at least such part as is not justifiably ascribed to highway-rate payers.
I am aware all this sounds rather explosive. I call it T.N.T., or Tax no transport and let the people prosper." Do not ask "Where is the money to come from? " I ant putting to you how to increase the national revenue by encouraging the intelligent use of a public asset—£2,000,000,000 worth of roads.