It can never really be determined whether all transport companies "pay their entire way". The difference is that those companies, and Amtrak corridor services, are used by many people and so are a vital component of our transportation system. Amtrak LD trains aren't. Some things are done for the public good but LD trains don't qualify.
As far as the one poster being outraged that railfans would want to end (some) Amtrak services, there's a difference between liking something as a hobby and looking at in a business sense.
MidlandMike Tolls assumingly go to the roads. Property taxs primarily go to schools, police, fire, etc., and local roads. Its the sales taxes and income taxes that come largely from the general population that is helping to subsidize part of buses, taxis, uber, etc.
Property taxes also support county roads. And in some states, in addition to the state and federal fuel tax, fuel draws sales tax.
Ninety-two percent of American households have at least one licensed motorist. They pay the lion's share of the federal and state income taxes, as well as general sales taxes, that find their way into the general fund(s). And from the general funds that monies flow to roadway funds to cover the direct revenue shortfalls.
Although it is practically impossible to trace all the money flows, Greyhound as an example, because of all the taxes it pays, probably pays its fair share of the costs of the roadways it uses. It may pay more than its fair share.
Rio Grande Valley, CFI,CFII
MidlandMike PJS1 Nothing the court said changes of the nature of Amtrak's activities and structure. If you read its financials, etc. carefully, it behaves like a business. It is a commercial enterprise; it has all of the attributes of a business.
My undersranding is that there is a general shortfall in most states and with the interstate highway system (a few states are exceptions), and in both state and Federal cases, the shortfall is made up from the general revenue.
But look at it another way: Iighway transportation is an industry. It is an industry that does not pay real-estae taxes on most of the property devoted to that industry. Freight railroads do pay real-estate taxes. Look at the huge highway interchange in downtown LA and think of all the useful tax-paying commercial property that cloverleaf-plus replaces.
In some states, highway patrol policemen are paid out of highway funds but in others from general police funds.
Instead of endless arguing about Amtrak through a profit-making business lens, perhaps it makes more sense to consider it a non-profit service. And from that perspective, the question is which of its subsidiaries (groupings) and lines (routes) are providing the most service, rprovides the most benefits to the most people? For Amtrak, the mission (service) was and is to provide transportation for people to get from one place to another in a rational manner. The mission was not to provide land cruises, restaurant experiences, hotels or other services not essential to that mission. The question of subsidies is hard to truly measure and thus rather moot. Given the current level of technology and effective speed and timings in the US, most people will either fly or go on highways for distances of much more than 350 miles/5-6 hours. That distance limit will increase with truly high speed rail services (speeds greater than 120 mph on existing lines or 160 mph on new, dedicated construction).
PJS1Amtrak is a commercial (business) enterprise.
There is the crux of the dicotomy!
Amtrak is a quazi govermental service; not a for profit business. Were it a for profit business, the IRS would have shut it down after 5 years for not making a profit and classified it as hobby. It hasn't made a profit in its first 47 years and is unlikely to make a profit in its next 47 years.
Never too old to have a happy childhood!
daveklepper ....the shortfall is made up from the general revenue.........highway transportation is an industry.
And where do most of the monies in the general funds (general revenues) come from? Mostly motorists! They are paying for the roadways that they use, but they don't see the complete cost at the price point, which is an issue.
Highways are infrastructure. With the exception of toll roads, they don't earn a return; they are not expected to.
More than 90 percent of the vehicles using the nation's highways are not engaged in a commercial activity. Those that are pay to use them. Whether they pay their fair share is a legitimate question.
The nation does not tax dams, airports, harbors, schools, universities, etc. for a good reason. It would be a case of government taxing itself, which would be dysfunctional.
Although it would be nearly impossible to improve, the taxable property displaced for the nation’s roadways, e.g. the I-30 mix master in Dallas, etc., probably has spawned a tax base that is greater than the taxable value of the property displaced.
In Texas, where I live, highways have spawned thousands of businesses, i.e. motels, hotels, restaurants, service stations, shopping malls, etc., that pay billions in property taxes. Without them most of the property would have remained scrub land with little if any taxable basis.
Until someone can show that the per capita allocation to Amtrak is more than the pper capita allocation to roads and bridges from general tax funds Amtrak will seem to be a good return. That is general tax funds not gas, diesel taxes license fees, sales taxes on vehicles . No figures have come out in a long time but in this state 30 - 50 % of road funds used to come from general tax revenues.
PJS1 MidlandMike Tolls assumingly go to the roads. Property taxs primarily go to schools, police, fire, etc., and local roads. Its the sales taxes and income taxes that come largely from the general population that is helping to subsidize part of buses, taxis, uber, etc. Property taxes also support county roads. And in some states, in addition to the state and federal fuel tax, fuel draws sales tax. Ninety-two percent of American households have at least one licensed motorist. They pay the lion's share of the federal and state income taxes, as well as general sales taxes, that find their way into the general fund(s). And from the general funds that monies flow to roadway funds to cover the direct revenue shortfalls. Although it is practically impossible to trace all the money flows, Greyhound as an example, because of all the taxes it pays, probably pays its fair share of the costs of the roadways it uses. It may pay more than its fair share.
I was counting county roads as local. Michigan also has a state gas tax that helps county roads along with state highways.
The problem with state and federal gas taxes is that they have not kept up with inflation. The gas taxes used to be more than enough to cover the roads, and even kicked in some for transit. While many household have licensed motorist, not every one drives the same amount. User fees such as gas tax insure that the driver pays in proportion to their usage of the roads. Anything else is subsidy by users and non users alike.
PJS1Another way to put it is Amtrak is a quasi-government corporation, as defined in its charter, that would have gone out of business a long time ago if it were not for large federal and state subsidies. This is a form over substance issue. The form of the company is that of a government sponsored corporation. The substance is it is structured and functions like a commercial enterprise (business).
Yes it's a form over substance issue. Its structure as a business is also part of the form. This corporation has the government as the only voting block and underwriter of all losses. It's actual function is that of a publicly controlled transportation service.
MidlandMike It's actual function is that of a publicly controlled transportation service.
Its function is to rent space in railroad cars to carry passengers from one point to another for a fare.
Amtrak's audited financial statements show that its accounting practices are governed by GAAP, which governs the accounting for businesses. Its capital structure is akin to that found in businesses.
Amtrak has been recording deferred federal income tax liabilities since 2012. If it ever turns a profit, it will have to pay federal income taxes. Government agencies don't pay federal income taxes, so deferring them is never an issue.
If Amtrak were structured as a government agency, its accounting practices would be governed by the Governmental Accounting Standards Board.
Irrespective of its organizational intent and structure, Amtrak has lost more than $34.6 billion since its inception. The long-distance trains have been a major factor in the accumulated losses, which have contributed to the perceived deterioration of service.
PJS1Its function is to rent space in railroad cars to carry passengers from one point to another for a fare.
That statement is nuteral to either a business or a gov't agency. Perhaps you are trying to equate Amtrak to a concessionaire. I don't know of any private businesses where the government picks the entire board and controlls all corporate votes. The business structure may be an artifact of an original hope for its eventual self sufficiency.
MidlandMike PJS1 Its function is to rent space in railroad cars to carry passengers from one point to another for a fare. That statement is nuteral to either a business or a gov't agency. Perhaps you are trying to equate Amtrak to a concessionaire. I don't know of any private businesses where the government picks the entire board and controlls all corporate votes. The business structure may be an artifact of an original hope for its eventual self sufficiency.
Not the point!
We will have to agree to disagree. Amtrak functions as a commercial enterprise and accounts for its activities as a business in accordance with GAAP. A deep dive into the company's audited financial reports makes this fact clear.
Irrespective of who holds the voting shares or appoints the Board of Directors, a close look at its capital structure, as well as the need to account for deferred income tax liabilities, among other line items, indicates that it is structured to function like a business as opposed to a governemtn agency or not-for-profit.
To put it mildly it is a failed business. If it were not for the substantial that it has harvested for all of it 47 years, it would have gone out of business many years ago.
Yes we can agree to disagree, but at least the Supreme Court and me are in agrement. From page 2 of the Syllabus (of the Opinion of the Court), DEPARTMENT OF TRANSPORTATION ET AL. v. ASSOCIATION OF AMERICAN RAILROADS
"... As Amtrak’s ownership and corporate structure show, the political branches control most of Amtrak’s stock and its Board of Directors, most of whom are appointed by the President, §24302(a)(1), confirmed by the Senate, ibid., and understood by the Executive Branch to be removable by the President at will. The political branches also exercise substantial, statutorily mandated supervision over Amtrak’s priorities and operations. See, e.g., §24315. Also of significance, Amtrak is required by statute to pursue broad public objectives, see, e.g., §§24101(b), 24307(a); certain aspects of Amtrak’s day-to-day operations are mandated by Congress, see, e.g., §§24101(c)(6), 24902(b); and Amtrak has been dependent on federal financial support during every year of its existence. Given the combination of these unique features and Amtrak’s significant ties to the Government, Amtrak is not an autonomous private enterprise. Amtrak was created by the Government, is controlled by the Government, and operates for the Government’s benefit. Thus, in jointly issuing the metrics and standards with the FRA, Amtrak acted as a governmental entity for separation of powers purposes. And that exercise of governmental power must be consistent with the Constitution, including those provisions relating to the separation of powers. Pp. 6–10."
https://www.supremecourt.gov/opinions/14pdf/13-1080_f29g.pdf
[quote user="MidlandMike"] Amtrak is not an autonomous private enterprise. [quote]
The National Railroad Passenger Corporation is a quasi-public corporation. Its voting stock is held by the Secretary of Transportation for the benefit of the United States.
Nobody said that Amtrak is an autonomous private enterprise. "Not an autonomous private enterprise", does not mean that the company is not a commercial enterprise.
Amtrak competes in the market place just like a commercial airline, intercity bus operator, etc. It is a business. The fact that its voting shares are owned by the federal government does not negate this fact.
A deep dive into to Amtrak's financials shows the Amtrak’s accounting and financials were set-up to record a profit. It is the only federal government controlled commercial activity that is set-up to do so. The others, e.g. TVA, PBCG, FDIC, use fund accounting to record revenues, expenses, and surpluses.
Because it owned by the federal government, Amtrak is subject to political forces that would not beset most private businesses and, therefore, it has a more difficult time adjusting its services to market demand. But doing so is not impossible.
It was able to reduce the level of services significantly during the Carter Administration, if I remember correctly, by eliminating several long-distance routes, and it has effectively pulled out of the New Orleans to Florida market even its saying doing so is temporary.
BTW, the Supreme Court is not infallible, i.e. Dred Scott vs. Sanford, Plessy vs. Ferguson, Korematsu vs. United States, etc. The decisions in these cases were reversed or most historians agree were a mistake.
PJS1BTW, the Supreme Court is not infallible, i.e. Dred Scott vs. Sanford, Plessy vs. Ferguson, Korematsu vs. United States, etc. The decisions in these cases were reversed or most historians agree were a mistake.
Those decisions were the law of the land, in some cases for years. They were changed only through due process, not because they were evil, horribly misreasoned or by the opinions of historians. Specifically, Dred Scott v. Sandford (1857) was undone by the Civil Rights Act of 1866 and the 14th Amendment of 1868. Plessy v. Ferguson (1896) was undone by the Supreme Court (Brown v. Board of Education, 1954) and legislation (Civil Rights Act 1964; Voting Rights Act, 1965). Korematsu v. United States (1944) was not repudiated until 2018 in the Supreme Court review Trump v. Hawaii.So at this time, Midland Mike is correct. Such is the nature of a living constitution.
blue streak 1 Until someone can show that the per capita allocation to Amtrak is more than the per capita allocation to roads and bridges from general tax funds, Amtrak will seem to be a good return.
PJS1Amtrak competes in the market place just like a commercial airline, intercity bus operator, etc. It is a business. The fact that its voting shares are owned by the federal government does not negate this fact.
Commuter rail and transit also competes in the marketplace. Are you saying that makes them businesses also?
endoftrackThe credit card is way too high in interest rate to be of any benefit.
BackshopWhy would you pay interest on a credit card?
You'd be surprised -- a great many cards now point out, safely down in the fine print, that they bill interest 'from posting date'. So unless you incrementally pay down the "balance" as soon as, or even 'before', the charges post, you'll be paying interest, this before any other applicable fees and charges.
This up to now has been far more observable on "special needs" cards marketed to poor or higher-credit-risk markets now that usury laws have been largely rejected. But I do expect to see the premise extended to 'special interest' cards that purport to offer enhanced "benefits" that particular fan communities might excessively value without looking too carefully with how those benefits might be monetized...
If you are not paying a credit card off in full monthly you are not using it correctly - from a consumer perspective. From the card issuer, they hope you never pay off the balance and continue to accrue interest and penalty charges.
BackshopI would think it would depend on how the entity was set up at inception.
Agree!
One way to assess the intent of Amtrak's architects is to look at its accounting and financial statements structure. They were designed at the beginning to record the transactions of a capital stock business albeit one that is owned and controlled by the federal government.
The Statement of Operations includes provisions to record profits and losses, although in Amtrak's case it has been a loss from the get go. Even more revealing, it is set-up to record income tax expense, which Amtrak has been doing since 2012.
The Balance Sheet includes an equity section showing Amtrak's capitalization structure, just like the equity section of the balance sheet of a private corporation, and a line item to record deferred income taxes, which it has been doing since 2012.
If the intent was to have the company function as a non-profit government agency, why were the accounting and financials set-up to record and show capitalization, income tax expense, etc.?
Government agencies, including transit systems and commuter railroads, use fund accounting. It does not record net income (loss), income taxes or deferred income taxes for a good reason. They have no expectations of net income and an income tax liability.
A few points require comment:
Again, highway tax revenues have not kept pace with costs of maintaining the highways. And long distance trains also spawn hosts of tax-paying private busineses.
Fairness demands retaining long distance trains. Granted the subsidy for a corredor or commuter psssenger may be less per-ride that for long-distance-train rider, but the regular corredor rider or commuter rider gets a yearly subsidy far greater than the rural long-distance train rider who rides out of necessity, the handicapped and elderly who cannot fly, and the vacation and tourist traveler, with one-to-several trips a year .
The handicapped access provisios and hard-of-hearing provisions in places of public gathering do not pay their way. In a sense, long-distance trains serve the same role with respect to the totsllity of USA transportation.
Serving the public good? Every bit as much as municipal libraries and natlonal parks. Defnition of the public good is not just that te nation's economy would be severely damged by the absence.
These arguments are repeated over and over again. We ought to agree to disagree and go on to try to reduce losses while increasing the value of the service. I am convinced that on-board food service can be profitable, buf only if part of the busines of a large nation-wide chain of excellent broad-customer-base restaurants with a healthy take-out business.
Once that is successfull, perhaps we can look at sleeping cars and somehow find a way of reducing costs by making them part of a nation-wide hotel chain?
daveklepperAnd long distance trains also spawn hosts of tax-paying private businesses.
Just for grins, what are some of these, and what profit is specifically from LD train operations?
PJS1BTW, the Supreme Court is not infallible, ...
And neither was the National Railroad Passenger Corporation when they set up the business accounting plan for Amtrak. Still, whereas the Supreme Court has reversed itself in consideration of new evidence, Amtrak still dutifully records its losses and lack of profits as it has done from day one as if it were a profit making business, despite all evidence to the contrary.
Overmod daveklepper And long distance trains also spawn hosts of tax-paying private businesses. Just for grins, what are some of these, and what profit is specifically from LD train operations?
daveklepper And long distance trains also spawn hosts of tax-paying private businesses.
I can only think of a few and they're generally not related to just LD trains, specifically. Contract Mechanical services and car cleaners for turning trains at outlying points. Any others?
-Don (Random stuff, mostly about trains - what else? http://blerfblog.blogspot.com/)
sorry to read all of this, as I love riding trains and plan to do that as long as I can. I did notice it took more points to book sleeper on City of NOLA this year as it did in 2016 and asked about it. Does not matter if you are senior, they don't use that in the formula any longer. And does not seem to get enough points for other stuff, Chase Card gave points for anything you spent anywhere, now it seems like it needs to be a partner with Amtrak. I was able to get 2 trips for free to NOLA, not sure what will happen the next time I go. I do not like "propeller head" and his ideas and agree with those who think he was put in charge to ruin Amtrak. It employs a lot of people who have worked there for years, but lately I've run into conductors and staff who have only been there 2-3 years, not like 20-30 as previously, I guess the older ones are getting out while they can. Sad situation
BaltACD If you are not paying a credit card off in full monthly you are not using it correctly - from a consumer perspective. From the card issuer, they hope you never pay off the balance and continue to accrue interest and penalty charges.
For the most part yes but there are times when the interest rate charged on a Credit Card is lower than the expected return of an item you can purchase with it.
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