Paging Water Block: Rand Paul and Barbara Boxer Announce the 'Invest in Transportation Act"

By Robert Wenzel

Rand Paul just took three steps in the direction away from libertarianism.

Along with Barbara Boxer, he today announced that they will be introducing the "Invest in Transportation Act of 2015. "This bipartisan legislation would extend the Highway Trust Fund.

Rand said:

We can help fund new construction and repair by lowering the repatriation rate and bringing money held by U.S. companies back home. This would mean no new taxes, but more revenue, and it is a solution that should win support from both political parties,

Got that? No new taxes, but more revenue.

Just how would you pull that off? Well you can't.

What is really going on is that Rand would like to set a tax low enough that multi-nationals bring their money back into the United States. It is not zero tax. It is a tax that would actually result in generating more revenue for the government.

Of course, the libertarian solution would be no tax on multi-nationals that want to move their cash balances into the US, where they would most likely invest the capital in domestic operations that would increase American productivity. In other words, it is a wealth destruction government scam to grab a part of this money.,

The Act would also halt the shrinking of the state from another direction. As the statement Rand put out says:

All tax revenues from the repatriation program would be transferred into the Highway Trust Fund, helping to address the urgent federal funding crisis facing America’s highways, bridges, and transit systems.

The authorization for surface transportation programs will expire on May 31st and the Highway Trust Fund is projected to face insolvency shortly after that. If Congress does not provide additional revenue to the Highway Trust Fund before that time, states will face cash-flow problems during the extremely busy summer construction season. Already Arkansas and Tennessee have delayed or canceled construction projects due to the uncertainty in federal transportation funding. 

In other words, without this Act. the government might actually shrink a bit. Passage of the Paul-Boxer Act will prevent this from occurring.

Again, a direction opposite from the direction a libertarian would take. A libertarian wants to shrink, shrink and shrink government, always and everywhere, not find new revenue sources so that state projects can be kept alive.

Finally, Rand's statement promotes the myth that government needs to be involved in the highway and transportation industry. His statement reads:

I am pleased to be working with Senator Boxer on a bipartisan solution to a tax and highway spending problem. The interstate highway system is of vital importance to our economy. All across the country, bridges and roads are deficient and in need of replacement...[A]  viable and bipartisan transportation funding solution would have a real economic impact across the country, providing funding stability for state and local governments and businesses that rely on federal transportation funding,

But Walter Block has shown in The Privatization of Roads and Highways: Human and Economic Factors  that there is no need for government to be involved in roads and highways to have a smoothly functioning road and highway system. Indeed, Block makes a sound argument that government involvement in the sector makes the system much more dangerous in terms of likely bodily injuries.

From the blurb to the book:

 [The book] is bold, innovative, radical, compelling, and shows how free-market economic theory is the clarifying lens through which to see the failures of the state and see the alternative that is consistent with human liberty. He shows that even the worst, off-the-cuff scenario of life under private ownership of roads would be fantastic by comparison to the existing reality of government-ownership of roads, which is awful in ways we don't entirely realize until Block fully explains it (think: highway deaths). But that is only the beginning of what Professor Block has done. He has made a lengthy, detailed, and positive case that the privatization of roads would be socially optimal in every way. It would save lives, curtail pollution, save us (as individuals!) money, save us massive time, introduce accountability, and make transportation a pleasure instead of a huge pain in the neck. Because this is the first-ever complete book on this topic, the length and detail are absolutely necessary. He shows that this is not some libertarian pipe dream but the most practical application of free-market logic. 

Bottom line: Rand's introduction of the "Invest in Transportation Act of 2015" is a major multi-car pile up from a libertarian perspective.

 Robert Wenzel is Editor & Publisher at EconomicPolicyJournal.com and at Target Liberty. He is also author of The Fed Flunks: My Speech at the New York Federal Reserve Bank. Follow him on twitter:@wenzeleconomics.