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Sunday, September 30, 2007


Bicycle Tax Fund

The 2007 Colorado Springs budget outlines a 115,000 dollar budget for "providing a funding source for bikeway improvements throughout the city." The source of revenue is a sales tax on the purchase of all new and used bicycles.

This is a good example of a continual distortion of local knowledge because of intervention. I have no doubt that the group of morons that came up with a bicycle tax thought it would be a great idea BIKES ARE SUPERDUPER AFTER ALL!!! but what it really demonstrates is an almost repulsive ignorance of basic human interaction. Furthermore, these oh-so sagacious legislators expose their flippant attitude to an individuals liberty.

What is the optimal amount of bikeways in a city? Most people with an IQ north of Quasimodo realize you cant answer the question in a concrete quantifiable number of units. Apparently though, there happens to be an optimal amount. The idea is that we can maintain more bikeways (a good thing) with this source of revenue (bike tax). However, what it does it create a change in the price of bikes and bikeways. People who previously owned bikes now get this bikeway for a reduced price since they don't burden the bike tax. Because of these manipulations in prices, prices lack the same "knowledge communicating" efficacy they previously had in a natural system. Ergo, distortions in the use of bikes, bikeways, their substitutes, inputs, complements; in a word, everything in the economy, is shifted ever so slightly away from efficient (in the proper sense of the word) allocation.

Furthermore, what a simple minded "tax and allocate" and its nonchalant use shows is a lack of respect for other persons property on the part of its advocates. What it means is that, the government of Colorado Springs knows how to use the money of people who buy and sell bikes than the people themselves. Taking money to pay for unwanted projects is no less theft.

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