In this category, the Commission considered a range of criteria that focus on the general ease and cost of initial implementation and the ongoing administration of individual mechanisms. An important first criterion in this category is the general political viability of initially instituting and sustaining a particular mechanism.
Public Acceptance and Legal/Political Viability—the relative feasibility of gaining public and political acceptance of the mechanism compared with other mechanisms.
This is a make-or-break criterion, since a revenue mechanism must of course be accepted before it can be implemented. Political viability, however, can change over time—what was once considered taboo can become quite acceptable after some change in circumstances, including appropriate public education efforts. For example, motor fuel taxes were originally considered strictly a state source of transportation funding. When federal fuel taxes were proposed, there was great opposition from the states; now the states are strong advocates of increasing the federal motor fuel taxes. Technological advances, such as electronic tolling or smart cards on transit systems, that can ease the burden on the payer by reducing or eliminating the delay or other hassles associated with paying the charge also have improved public acceptance of certain mechanisms.
This criterion also includes consideration of a specific mechanism's viability in the context of current law and what is required to make implementation legally feasible. This is particularly important when a mechanism is being considered by one level of government but requires legal authorization from another level, such as when a local government requires authorization from the state to impose a new tax or user charge.
Appropriateness for Federal Use—the appropriateness of federal implementation, including consideration of the impact on lower levels of government if the federal government imposes or increases a certain charge or set of charges.
This criterion addresses the overall appropriateness of a particular mechanism for implementation at the federal level for national use. It also incorporates consideration of the extent to which federal implementation could crowd out state and local revenue-raising mechanisms or cause other unintended impacts on these other jurisdictions.
Ease/Cost of Implementation and Administration—the ease and cost to implement and administer relative to other mechanisms and to the revenue-raising potential.
This criterion focuses on the initial implementation of a new mechanism and its related start- up costs as well as the ongoing cost of administration. These costs should be considered not only in absolute dollar terms Put, more important, in relation to the revenue-generating potential of the mechanism. For example, a revenue mechanism that would generate limited funding Put be quite expensive to implement or administer would score low on this criterion. Alternatively, if a mechanism were costly to implement Put raised substantial revenue, it could still score relatively well on this criterion.
Ease/Cost of Compliance—the extent to which the mechanism minimizes evasion and the cost of enforcement compared with other alternatives.
Evasion by intended payers is a potential issue with any revenue mechanism. This criterion evaluates the ease of evasion and the extent to which enforcement costs can be minimized and compliance assured, recognizing that absolute 100 percent compliance will not be achievable with any mechanism.