Should Cyclists Pay Road Tax?

Quite a common argument is the idea that cyclists should pay road tax because they use the road.

From the perspective of an economist, you could make a convincing argument that people who cycle to work should not pay tax, but be given a subsidy by the government. This is why.

Cycling creates positive externalities (Benefits to the rest of society, not felt by the personal users). This means the social benefit of cycling is greater than the private benefit. If I cycle, other people benefit in the form of less congestion, less pollution, healthier society. But, these external benefits are not taken into consideration by someone cycling. When weighing up whether to cycle or drive, we think of the the private cost, the downside of getting wet, the probability of getting run over against the benefits of lower costs, getting to work quicker, and keeping fit. Generally We don’t think “I’ll cycle to help do my bit in reducing the pressure on city centre car parking spaces.”

Cycling has many  positive externalities including:

1. Less Pollution. Bikes don’t pollute, cars and buses do. Given the importance of global warming and rise in respiratory disease, cleaner air is a significant benefit to the rest of society, More people cycling means cleaner air for all.
2. Less congestion. If more people cycled, there would be less pressure on road and parking space, especially in city centres.
3. Cyclists are moving traffic calming measures. Councils find traffic calming measures significantly reduce accidents. They reduce speed and make motorists think. When a motorist approaches a cyclist it forces them to get out of cruise control mode and (in theory) think of a careful way to pass them. In theory this should lead to safer roads.
4. Cyclists don’t damage the road. Roads need repairing frequently because they soon get worn down. However, the roads are not worn down by 10kg bicycles, but 2 tonne + lorries. Therefore, it is not cyclists who should pay the external cost of road repair. Lorries not only create the cost but also create the time and inconvenience of road works.  This is a major external cost and is a reason why HGV should pay higher road tax.  If heavy goods vehicles paid the true social cost, it would encourage more freight to be transported by rail not road. Society would benefit from a more efficient transport system.
5. Cycling Reduces Cost of NHS. Obesity and lack of physical exercise creates strain on the resources of the National Health Service. By keeping fit, cyclist are less of a burden on government spending.

Cars should pay road tax and petrol tax because they create negative externalities; the social cost is greater than the private cost. The tax system is a way of making motorists pay the true social cost.

I would argue that lorries and heavy goods vehicles should pay extra taxes because they create the most negative externalities and the social cost is higher than driving.

If cyclists were subsidised it would encourage more people to take up cycling to work. This would help city centre transport systems and the quality of life.