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[quote user="henry6"] The airline industry is in fact heavily subsidized by all levels of governent. The obvious is nationwide air traffic control followed by municipally owned and operated airports.  But also the US military's investment in air and space research and development and purchase these products takes the financial burden off private airline companies by them being able to buy an already researched and proven product without financial risk.  Then there are the safety guidlines for operation and employee responsiblity, all spelled out and enforced by the government.  There's probably a lot more.  But you cannot say the airline industry is not subsidized.[/quote] Your claim is long on generalizations and short on facts.  The airline industry is not heavily subsidized, whatever heavy means, NARP's claims to the contrary not with standing.  In fact, although it would take an enormous amount of time to demonstrate it, the Net Present Value (NPV) of the subsidies received by the airlines could pale compared to the NPV of the local, state, and federal subsidies (low cost bonds, land grants, etc.) given to the railroads.   Most airports in the United States were built by the military (turned over to civilian operators) or local government authorities.  They are paid for by landing fees, hangar fees, vendor fees, parking fees, etc.  Most of them are self-supporting. Nation wide the airlines use about 30 to 35 per cent of the U.S. aviation infrastructure.  The remainder is used by general aviation and the military operating in civilian airspace.  Not all of the monies transferred from the general fund (approximately $2.2 billion in FY08), which is a federal subsidy, go to the airlines.  They only benefit from a proportional share of it. Most airports in the U.S. were built with tax free municipal bonds.  The difference between the interest paid on these bonds and the interest that would have been paid on fully taxable bonds could be seen as a federal subsidy.  Moreover, they may or may not qualify for a state subsidy, depending on whether the state has an income tax and treats the interest on the tax free bonds the same way that it is treated by the federal government.  Historically, the rate spread between a AAA municipal bond and AAA corporate bond has been less than one per cent.  For example, the spread between a AAA corporate (there are very few corporates with this high of a rating) and U.S. Treasury long bonds, which are a good emulator for municiple rates, was 90 basis points between 2000 and 2008.  By using tax free financing, airports are able to charge slightly lower fees than would be the case if they had to resort to taxable financing.  However, because the airlines, as well as other commercial users, pay slightly lower fees than would otherwise be the case, they have high income, assuming that they have any income at all, which results in higher taxes, which in turn means that a portion of the so-called subsidy is actually paid back to the federal government in higher income taxes. But this is irrelevant.  The key question is how to fund passenger rail, if funding it at all is appropriate, and what transport problem is it addressing.  It does not matter how or why the government funds other activities.
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