But isn't our current system--a combination gas taxes, vehicle registration, and general tax funds--a reasonable way to hedge against free riders? It sets a kind of low and high bar for usage. There are a number of examples outside of transportation that use this type of hybrid model (public universities, for one). I think they work better in some areas than others. I would agree if you said that many of these public subsidies (for transportation, e.g.) can work to the benefit of corporations at the expense of payers. It would be an interesting world if the price of a t-shirt at a big box store included the full cost of shipping as well as workers' heath care and housing. I don't know if that world would be better or worse for more people on average.
A free rider is someone who can increase consumption of a service without incurring additional cost. My proposal aims to link consumption and cost as closely as possible, minimizing free riders. I think any alternative would increase free riders. Consider vehicle registration. It's typically not a flat rate per vehicle. Antique vehicles and motorcycles get a discount. Heavier vehicles and commercial vehicles pay more. These crude adjustments make the registration fee more closely match the usage cost the drivers will impose on the roads. A gas tax is a closer but still approximate measure of road usage. A general tax is completely disconnected. Why should a New York City resident without a car subsidize Alaskan highways? No system will be perfect. A kid on the back seat is literally a free rider (unless a toll operator charges for passengers). But the weight of an extra kid does not add much wear and tear to a highway. I think that the incentives work out best when those who have a stake in the operation make the decisions, rather than distant planners making inflexible one-size-fits-all rules for others. I believe the price of a t-shirt does include the full cost of shipping (how else would the container ship lease get paid?). If the t-shirt factory worker pays for housing or health care with their salary, then the price of the t-shirt also includes these costs. Of course public subsidies can work to the benefit of corporations at the expense of taxpayers; do I need to say it?