cfloryan
Here
Cost, both for the municipality to collect and enforce collection for sales tax (going over business books isn't something they do today) and for the business which could now be audited and has to perform paperwork with an additional government.
It's far cheaper, both for the business and municipality, to have the federal government do it and send down the funds.
Smaller areas would find it essentially impossible to collect a sales tax. The amount collected would be eliminated by hiring a single collections agent and the overhead of doing that job correctly. $30,000 a year to some of these places would make a huge difference in whether that old bridge gets fixed this decade, or not.
Exactly. It's very bureaucratic and inefficient to fund transit with new forms of municipal taxation.
The correct way to fund this is for the feds to match any dollars spent by the municipality on infrastructure. This was an immensely effective method used in the US in the late 70's to get massive subway systems built in short amounts of time. Washington's and the Bay area BART came about thanks to this funding regime.
The current HSRs (high speed rails) in the US are being funded the same way and (unless America goes bankrupt) you'll see a very high rate of HSR construction in the coming decade.