The U.S. Should Shift From the Gas Tax to a Mileage-Based Usage Fee by 2020

/PRNewswire-USNewswire/ -- A bi-partisan Congressionally-created commission will urge lawmakers to fundamentally shift the way the federal government collects revenues to fund transportation infrastructure. Culminating nearly two years of study and deliberation, the National Surface Transportation Infrastructure Financing Commission will offer its consensus view and roadmap for sweeping reform of the nation's transportation infrastructure funding approach with the release of its final report Paying Our Way: A New Framework for Transportation Finance during a press conference on Thursday, February 26th.

The Financing Commission will offer specific recommendations for addressing the significant and widening gap between federal investment and the nation's transportation infrastructure needs, while at the same time moving the federal government away from reliance on motor fuel taxes toward more direct fees charged to transportation infrastructure users. Charging vehicle drivers a mileage fee embodies the "user pays" principle and more accurately aligns the costs and benefits of the surface transportation system to those who are using it. More transparent charges for using infrastructure may also spur drivers to use the system more efficiently, reducing the overall investment need.

"With the expected shift to more fuel efficient vehicles," said Robert Atkinson, the chair of the Financing Commission and president of the Information Technology and Innovation Foundation, "it will be increasingly difficult to rely on the gas tax to raise the funds needed to improve, let alone maintain our nation's surface transportation infrastructure."

In addition to a federal mileage-based charge, the Financing Commission calls for the federal government to facilitate state and local governments' ability to raise their share of needed revenues in ways that also spur efficient use of the system and stepped-up investment, including through tolling portions of roads and charging premiums for rush-hour travel in heavily used urban corridors, so-called congestion pricing. The Financing Commission provides detailed recommendations for lawmakers to facilitate the effective use of private investment and to provide government credit support to assist in the financing of transportation infrastructure projects to stretch the federal government's limited resources.

In order to support the transition from the gas tax to a mileage-based charge, the Financing Commission recommends a ten cent per gallon increase in the federal gas tax (15 cents for diesel) and indexing the tax to inflation going forward. The gas tax, which is not currently indexed to inflation, has lost 1/3 of its purchasing power since 1993, the last time the tax was increased. The Financing Commission urges the federal government to act swiftly. While the nearly $40 billion in transportation infrastructure spending included in the stimulus package will be helpful, it will cover only a very small share of the shortfall in highway and transit funding and will not address the systemic crisis the nation faces in its surface transportation infrastructure investment.

"We must start transitioning to a new paradigm now," says Commissioner Mike Krusee "If we don't start, we will never get there."

Illicit Financial Flows Out of the Developing World Overwhelm Foreign Aid

/PRNewswire-USNewswire/ -- Global Financial Integrity (GFI) released today a study estimating the annual value of illicit financial flows from all poor nations at approximately $900 million. Titled "Illicit Financial Flows From Developing Countries: 2002 - 2006," (http://www.gfip.org/) the ground-breaking report shows that the developing world is losing an increasing amount of money through illicit capital flight each year. Moreover, the value of the illicit flows surpasses the amount of Official Development Assistance (ODA) entering those countries by an order of magnitude.

"Illicit financial flows siphon revenue out of poor countries, robbing them of much-needed assets and forestalling economic development," said GFI director Raymond Baker. "These new figures reveal that illicit financial flows outpace ODA by a ratio of nearly 10 to 1. This is critical to understanding global poverty and developing effective poverty alleviation and economic development strategies," Baker said.

Primary findings of the report include:

-- Total capital flight exiting the developing world may be as much as $1
trillion per year,
-- The volume of capital flight is increasing at an average of 18.2% a
year,
-- Over the five-year period of this study, illicit financial flows grew
at the fastest pace in the Middle East and North Africa region (49.4
percent) followed by Europe (25.4 percent), Asia (15.7 percent), and
the Western Hemisphere (2.8 percent). Flows from Africa declined (-2.9
percent) but this is more the result of incomplete data than
supportive economic or political factors.


Illicit financial flows refer to money that is illegal in its origin, transfer or use and reflect the proceeds of corruption, crime and tax evasion. Corporate avoidance of customs duties, VAT and income taxes constitute an estimated 60% of the total outflow. The findings were based on macroeconomic trade and external debt data maintained by the International Monetary Fund and the World Bank.

"The magnitude of the flows indicates there is much the international community must do to tackle this systemic and destructive problem," Baker said.

Global Financial Integrity promotes national and multilateral policies, safeguards, and agreements aimed at curtailing the cross-border flow of illegal money in order to enhance global development and security.