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Most of those who support high speed rail (HSR) appear to overlook its cost or only make an oblique reference to it.  I wonder how many of the people who support HSR are aware of its true cost (capital and operating) and how it will impact them as taxpayers?California has one of the highest state income tax rates of any state in the union.  It ranges from 1 per cent on taxable income of $6,287 to 9.3 per cent on taxable income of $44,819.  In 2006 the median family income in California was $64,563.  It is likely that at least half the families paid the maximum tax, except for those with a taxable income of more than $1 million, who pay a 1 per cent surcharge.  Adding $40 billion to the state budget, less what can be obtained from the federal government, plus operating subsidies will probably increase the pressure on state officials to raise taxes, unless they can find cuts to offset the state's share of funding HSR.  Fares are another subject that has not been discussed.  How much will it cost to ride on the high speed system?  The fares for the Acela provide a clue.  The average cost to ride the Acela from Washington to New York is approximately 74 cents per mile, whilst the average cost from Philadelphia is approximately $1.39 per mile.  These fares, together with the regional fares, don't cover the complete cost of the NEC.  It would take another 16 to 23 cents per mile to recover the other charges (interest, depreciation, etc.) applicable to the NEC, depending on the percentage of these charges worn by the NEC.  The average cost to fly commercially from Washington to New York is approximately 54 cents per mile, whilst the average cost to fly from Philadelphia to New York, which very few people do except when they are connecting to another flight, is approximately $1.84 per mile.  The average cost to drive my Corolla is 31.5 cents per mile.  If the cost of gasoline rose to $6 per gallon, the cost to drive my car would be 39 cents per mile, which is well below the cost of taking the Acela, even after figuring in tolls and parking.    If the California HSR fare is the same per mile as the Acela fare per mile between New York and Washington, the cost to travel from Los Angeles to San Francisco would be approximately $281.  If another 16 cents per mile was added to the fare, the cost would be approximately $342.  This assumes the rail distance between Lost Angeles is roughly 380 miles.The average cost to fly from Los Angeles, which takes 1 hour and 15 minutes, is approximately 34 cents per mile or $129 on Southwest Airlines.  This is for a standard fare.  There are cheaper fares that could lower the cost by five cents a mile.  Whether building HSR in California would save the state $128 billion in highway construction costs is problematic.  I am keen to see the independently audited numbers.  Missing in the laudatory discussion of Europe's HSR is a discussion of the taxes paid by most Europeans compared to those paid by Americans.  Taxes as opposed to fares cover a significant portion of the cost of Europe's HSR.  According to the Organization for Economic Cooperation and Development (OECD), the total tax burden in the United States (including state and local taxes) was 25.4 per cent of income in 2006.  This is before the inclusion of the taxes embedded in the cost of goods and services, i.e. corporate taxes, employer's portion of the payroll tax, etc.  As one might imagine, the rate varies from state to state because of the different state tax schemes.  In the European countries with supposedly flash high speed rail systems, the tax burden ranges from an average of 35.1 per cent in Spain to 50.7 per cent in Sweden.  Again, this is before any pass through taxes.  I don't hear many people who support HSR discuss the tax implications of building and operating HSR.  Based on the numbers shown above, it is no wonder.
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