For starters, I didn’t vote for Trump.
I either didn’t like or was skeptical of practically everything he promised. Though, when he won in November, I may have been relieved that the White House wasn’t falling into the hands of another spend-happy liberal, promising everyone a special unicorn. But, I wasn’t happy about the idea of a Trump presidency. After about a month, while pleased with a lot he has done, I remain skeptical or flat-out opposed to other things he has done or promises to do.
One of the things I was a particularly staunch critic of, was Trump’s infrastructure plan. At first, it appeared to be a nightmarish sequel to Obama’s stimulus package, which essentially used tax revenue in an attempt to stimulate the economy. Not only did this have little effect on the economy, actually causing one of the slowest recoveries since WWII, it also wasted thousands of U.S. tax dollars in mismanaged projects.
I didn’t think Trump was foolish enough to try to tax this country into prosperity and increase the national debt further (like our former president attempted to), but can anyone really predict what Trump will do?
Therefore, you can color me shocked when I did a little digging into Trump’s specific infrastructure plan and completely fell in love with the idea. If Trump keeps this campaign promise and executes the plan as designed, this could set a precedent for all future presidents, changing the way we address infrastructure.
Trump’s infrastructure plan is pretty simple, the main selling point behind the plan is that the private sector will fund it.
Trump plans on accomplishing this in two ways: first, he will offer nearly $137 billion in tax credits to private investors who participate; and second, by removing a lot of the regulation that impedes current infrastructure projects.
Critics were quick to voice their opinions on the infrastructure plan. They argued that private companies would only invest in projects that yield a return, leaving projects that don’t require tolls to be neglected. Other critics stated that rural communities will go unnoticed, due to the lack of private investment in those areas. Lastly, critics don’t necessarily like giving tax credits to private businesses.
There are several reasons why a private company would invest in infrastructure other than receiving a direct return for that project in the form of tolls. For instance, if there is a road riddled with potholes, it would be in the best interest of surrounding businesses to pay for the repair and maintenance of that road in order to receive more customers. Furthermore, all aspects of infrastructure, in that area, would be important to the businesses. Just like the actual storefront, the area surrounding the business must be carefully maintained to maximize customer potential. The buyer dictates the market and the location and upkeep of that area usually generates higher revenue for businesses.
Furthermore, all aspects of infrastructure, in that area, would be important to the businesses. Just like the actual storefront, the area surrounding the business must be carefully maintained to maximize customer potential. The buyer dictates the market and the location and upkeep of that area usually generates higher revenue for businesses.
While some fear rural areas will be neglected, I don’t believe that will be the case. For starters, businesses are everywhere, and the same rules apply. One of the most important decisions for business to make is choosing its location. Therefore, it may be less costly to improve upon an area rather than move to a nicer area, where competition will be far more fierce and expensive.
Logically, the reverse applies as well. Companies that are having difficulty in an area, due to competition, have the option to invest and improve other areas in order to plant their businesses there, tap into a new market, and face less competition. In addition, businesses constantly spend money for public relations purposes, why would infrastructure be any different? Companies would likely invest in areas they may not be located in, simply for the publicity. This, of course, would become more likely if the government removes itself from infrastructure and rescinds all the regulation that deters private investments in infrastructure.
Lastly, I personally don’t see any problem in providing tax credits to businesses as an incentive to invest in the infrastructure. Being of the belief that tax is generally bad (in most forms), I view tax credits as simply giving money back to the person you took it from. As long as the credit given doesn’t exceed what the company pays in taxes, then essentially all Trump is doing is telling companies they can keep a little more of their money if they invest in infrastructure.
Trump’s plan is the best chance at having a privately funded infrastructure project. Not only will this result in faster and higher quality work, but the cost won’t come from tax revenue. There also won’t be discrepancies between the amount paid and services provided, as there would have been if it were covered by taxes. Those that live in areas with well-maintained infrastructure will be forking as much of the bill for areas that are run down even if the government continues to run infrastructure.
The issue today is that the government has completely monopolized infrastructure. Because of regulation, lack of accountability, and endless funds through taxation, they are able to drive the private sector out of infrastructure. They do this by (1) providing tax exemptions to the state and local governments on municipal bond interest; (2) allowing no income taxes for government facilities, and tax exemptions for state-owned airports, while the private sector is still forced to pay both federal and state taxes; (3) government facilities receiving aid while that aid has to be repaid in full if privatized.
As of now, the government has made it impossible for the private sector to handle infrastructure. What is needed, is a president who changes the norm, making it so that in the future the government isn’t as involved in infrastructure as it has been; naturally, the private sector will fill the gap, making it higher quality and less expensive.
A normative shift needs to happen and, as of right now, Trump’s plan may be the best option for that.
Braden Paynter is your average Joe Schmoe, who loves his country and all the freedom it entails. He has received an education in political science and international politics and regularly contributes articles to libertarian sites.
Featured image: Crooks and Liars
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