TL;DRAbstract
Horst Seehofer, Bavaria’s prime minister, seems to be close to his objective of implementing a road toll for foreign cars in Germany. As German road infrastructure suffers from large deficits, a new fiscal instrument seems to be inevitable. Thus, Seehofer’s initiative points in the right direction, however, applying a suboptimal vignette model is not the right approach. The opportunity should be used to establish a toll model which creates efficient allocation and fiscal effects. This article sets out three simple principles which allow the implementation of such a system.
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Horst Seehofer, Bavaria’s prime minister, seems to be close to his objective of implementing a road toll for foreign cars in Germany. As German road infrastructure suffers from large deficits, a new fiscal instrument seems to be inevitable. Thus, Seehofer’s initiative points in the right direction, however, applying a suboptimal vignette model is not the right approach. The opportunity should be used to establish a toll model which creates efficient allocation and fiscal effects. This article sets out three simple principles which allow the implementation of such a system.
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