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Correct. A gas tax is an imperfect measure of road use, but it's one we have, and it's pretty good - much better than anything else that is likely in the next few years, and free to implement since it exists already. You are right that ultimately it would need to become a fuel tax, or road miles tax, or something like that.
Sure - they depend on accurate information about costs, which is what this system (more or less) does.

Surely you mean that it is one of the results of a perfect market?
I don't think so. By passing on the cost of roads on a per liter or per mile charge you are making consumers sensitive to the costs of choices. Whether or not they drive or choose some other way to get the job done is informed by the full costs of their choice, making it a more perfect market, no?

It makes a more perfect market for roads.

The result of that would be a less perfect market for the industries that relied on the free (subsidized) use of roads.

Well I'm looking at this as a market for the world of transport choices. Let's take an example of the kind of thing that full cost pricing of roads into gas costs would allow: Right now, much of the costs of roads is built into general taxation. This effectively means that there is a hidden subsidy for travel. Goods that travel a long way actually cost more than we think they do, because the costs of that travel are paid for from general taxation. The market does not have all the information it needs to make the most efficient allocation of resources.
Passing on the full cost would allow local production (of agricultural products, for example) to compete on a more level playing field - this is what I mean by creating a more perfect market. The consumer has more information about the true costs.
Taking away subsidies from industries always gives more information, which helps create a more perfect market. Direct subsidies always distort markets, and make them less perfect.

You're focusing on market distortion to the point of ignoring the other factors that go into a perfect market.

One of those factors is competition.

I can't disagree with the fact that subsidized roads knock the playing field off level for local production, but do you disagree that subsidized roads make a market open to more competition?

It seems to me this boils down to a math problem. How much do you pay in subsidy vs. how much do you save from more competition?

I'll be honest, the only reasons I can give for thinking you save more from competition is because that's what makes sense to me, and most people seem to agree. Neither of these are acceptable arguments.

So I can't prove my position without running some numbers (which I'll do). If you have some numbers that prove your position, I am keenly interested...

Really. An actual provable answer to this, whatever that may be, is far more useful to me than my supposition.

Regardless of how right I think I am.

Let me get this right, you're talking about competition between companies who use roads, rather than competition between companies who use roads, and companies who use rail, air, or more efficient distribution mechanisms?
So your argument is that if roads are subsidized, this somehow improves the competitiveness of companies who use them? I'm not sure I follow. It's not like it makes things cheaper - you're paying the cost of the transport from taxes, you just can't choose whether you want to or not. It certainly harms competition from non-road companies and solutions.
A more mundane example of this distortion is the choice of whether to drive, bike or take the bus somewhere. Driving (and to a lesser extent taking the bus) is artificially cheaper because of this subsidy.

Well, subsidizing anything makes it cheaper to compete within that subsidy area, but ultimately harms competition. If you take the broad view of transport and distribution, subsidizing one solution ultimately prevents the market from finding the 'highest and best' solution.
I don't really accept your argument that subsidy creates competition. Taken to it's logical extreme, would giving all companies completely free transport at the public expense increase competition? Maybe, but the cost of subsidy would outweigh the benefit of reduced transport costs.
Right - the political reality is that people want cheap gas and transport, and in a democracy politicians are liable to pander to that. It's a bad idea from an economic perspective though, and we have to do a better job of explaining to the voters why that is the case.

Well, there are a lot of theoretical and experimental proofs of this in the realm of other subsidies, particularly in trade support. The problem is that the system is so complex that it's hard to 'prove'. The premise that the government can make the system more efficient by targeted subsidy than people making choices themselves using all the information they can is pretty dubious though.

peeb, I wanted to share this commentary with you and the others.

I do hope you'll read it all.

Subsidies Don't Explain Energy Market

RALEIGH – No government should give special tax breaks or subsidies to oil and coal companies. Can we all get agreement on that?

Good. Now, let’s get real. Tax breaks and subsidies for the energy mainstays of our economy are unwise. But they don’t get anywhere close to an explanation of why oil is the primary driver of transportation and coal is the primary driver of electricity generation. For that, the best resource is to study the physics and economics of power generation, as I have previously advised.

A good reason to discount the “government favoritism” explanation for our current energy mix is that alternative energy is vastly more subsidized per unit of output. As the Wall Street Journal observed in a Monday editorial, a recent report from the U.S. Energy Information Administration estimated that tax breaks and subsidies for traditional coal technology amounted to about 44 cents per megawatt hour of power produced. The subsidy per megawatt hour of natural gas was even lower, 25 cents. And that taxpayer-sheltered, wildly expensive option of nuclear power has us on the hook for $1.59 per megawatt hour.

How about so-called renewables? They are major-league rip-offs of the taxpayers. Solar energy receives a subsidy of $24 per hour. Wind is slightly less abusive at $23. “Clean coal” technology is even more abusive at $30.

---- I'll stop quoting there, go and read, please.

vmarks, I'll go take a read of that later - in the meantime, I presume you're chiming in to support the idea of a gas tax that reflects the full cost of government spending to support road infrastructure?
---
edit. Oh goodness. I just sat down with a cup of coffee to read that 'article' (all of half a page of unsourced opinion). Boy was I disapointed. You've quoted a right-wing blogger who is plucking figures out of the air (they're plain wrong, not that we can check them, because he doesn't day which hole he pulled the out of) and quoting press releases from his own foundation as if they are sources. If you want them to be taken seriously, you'll have to provide some evidence. Meanwhile, we established very firmly the degree of subsidy that the govt gives Big Carbon is enormous.

Maybe I'm missing something, but this question gives me the impression you're saying that the market distortion due to road subsidies is large enough to make trucking genuinely competitive with rail.

Is this even remotely true? What's the average cost per ton per mile with a truck and a train? Isn't it something like two dollars for a truck and two cents for a train?

My understanding is that rail is a so much cheaper means of transportation that the only reason a business would choose road over rail is because of time or access.

Well more or less, yes, but we're dealing with the margin, which is where interesting financial choices happen. This affects business decisions to locate closer to railheads or to consumers and producers. It's a systematic distortion that probably shows itself up most clearly in whether it is cheaper to centralize and mass produce or decentralize and locally produce.

We're talking a difference between them of two orders of magnitude. How big can this margin be?

The margin is the point where the two curves meet. Your two orders of magnitude figure applies only to situations where you are moving through a rail corridor. 80% of freight is transported by road, despite these cost differentials.

The margin is the point on the graph where it is about the same cost to transport by rail or by road (or to source locally) small changes at this margin can produce large effects that are difficult to predict.

Short answer: I don't know how big the margin is. I suspect it is substantial.

A simpler case would be to compare road transport against local production, since with rail it depends so much on the locations relative to railheads. In this case, for every increase in fuel cost (or transfer of cost from general tax subsidy to actual gas tax cost) additional businesses would move from the more expensive side of the graph to the less expensive (when compared to trucking from a distant factory). There won't be a simple linear relationship between any of these factors though.

Does that make sense?

Really? Then why are trucks so popular and trains so unpopular?

As I mentioned - it's because rail only operates on fixed corridors. If you want to transport where it goes, it's much cheaper. Look at the amount of money from taxation that goes into supporting a road network over a rail network.

I'm not an expert, but it seems logical that they would prefer trucks because those can go on roads while trains can't, and we have a lot more road than rail in this country.

What I said in what you quoted. Time (faster) and access (more places you can get to).

The point, dear peeb, is that you keep advocating for huge tax increases in order to push the cost up, in order to push usage down, no matter what the cost to people's lives and livlihoods, when doing so will have no appreciable result.

If everyone in the USA did everything that you asked (by some miracle) then the carbon dioxide output at 2020 would be about equal to that of 1990. This is not significant.

Finally, if by some miracle every country in the world met the same target, which in places like India and China would result in human suffering on a massive scale (because their energy production under such constraints couldn’t come close to serving the needs of their teeming billions), the resulting effect on the climate might, indeed, be discernible but still so small – roughly two-tenths of a degree by 2100 – that few if any tangible benefits would flow from the “accomplishment.”

My Nobel Moment - WSJ.com -- john christy said that "California and some Northeastern states have decided to force their residents to buy cars that average 43 miles-per-gallon within the next decade. Even if you applied this law to the entire world, the net effect would reduce projected warming by about 0.05 degrees Fahrenheit by 2100, an amount so minuscule as to be undetectable. Global temperatures vary more than that from day to day."

Your notion of making energy so expensive that people cannot use it, cost to human lives be damned, is a dangerous one. That's right, you're dangerous. You're plans would cause disaster and death, with no real benefit.

No, I'm asking for people to pay their way and stop asking for subsidies. The gas tax should pay for road infrastructure. It's not a question of pushing usage down, it's about stopping welfare scrounging.

Energy is already expensive, I'm asking that people pay the actual cost for it, not expect subsidies from the state and other taxpayers for their subsidized energy.
The idea that if I don't subsidize your gas use it will cause armageddon is laughable.