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Something between a Sleeper and Overnight Coach

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<p>[quote user="dakotafred"]</p> <p> </p> <div class="quote-header"> </div> <blockquote class="quote"> <div class="quote-user">Sam1</div> <div class="quote-content"> <div class="quote-header"> <span style="font-family:'Arial',sans-serif;font-size:10pt;">Railroads do not pay property taxes.  Or any other tax for that matter!  Like all businesses they pass them through in their rates. The shipper pays the taxes and, in turn, passes them, as well as his business taxes, onto the end user in the price of the goods. </span></div> <div> </div> <div> </div> </div> </blockquote> <div>This is fallacious as applied to railroads vs. their competition. Because -- if the railroads don't "really" pay property taxes, their competition (trucks, airplanes, barges) doesn't really pay property taxes TWICE.</div> <div> </div> <div>This is so because trucks, airplanes and barges don't have to build into their rates that which the rails do -- the cost of that check written to the county treasurer. (Or, in our state, a check written to the state, which prorates it through the subdivisions.)</div> <div> </div> <div>In short, they're forced to pass on to the customer one fewer tax than the rails are, giving them that much of a rate advantage. [/quote]</div> <div> </div> <div>Railroads pay (collect) property taxes.  But they don't pay federal fuel taxes on the diesel burned in their locomotives: I may be wrong on this point, in which case someone will correct me, I am sure.  In a few states they pay sales taxes on their locomotive fuel.  </div> <div> </div> <div>Railroads don't pay to use their rights-of-way. They pay for the construction and maintenance of them. The infrastructure is depreciable.  </div> <div>Depreciation is a deductible expense for income tax purposes. It reduces an entity's tax expense.  In the case of a railroad, which is capital intensive, the reduction of the federal and state corporate tax liabilities due to depreciation expense is significant.    </div> <div> </div> <div>Truckers, airlines, barge lines, bus companies, etc. pay user fees (fuel taxes, license fees, etc.) to cover their proportional share of building and maintain the common facilities that they use, i.e. highways, airways, etc. The user fees are a proxy for the property taxes and infrastructure costs that the railroads pay.  Users of the airways, highways, waterways, etc. cannot take any depreciation for the common facilities that they use to reducre their tax expense.      </div> <div> </div> <div>Whether the commercial users of the common facilities, i.e. airways, highways, waterways, etc. pay their fair share has been debated ad nauseam.  And it is likely to continue without resolution.</div> <div> </div> <div>If the total tax liabilities of the commercial users of the common facilities are taken into consideration, I believe that the commercial users, i.e. truckers, airlines, etc. pay close to their fair share of the cost of facilities that they use. </div> <div> </div> <div>Corporate taxation is complex.  Many people have a tendency to only look at a portion of the tax picture, i.e. higheway user fees, and miss the tax implications of depreciation, corporate income taxes that flow to the general funds, etc. A thorough discussion of taxation and its implications is beyond the scope of these forums.  </div> <div> </div>
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