He's a professional lawyer that advocates for shippers, what do you expect him to say... He also dismisses that railroads have to pay for their own right-of-way and infrastructure, something that neither trucking companies nor airlines fully compensate the government for, which you could also say about barge companies. If trucking and airlines had to fully pay for their infrastructure then it would be only the 2% that could afford to use their services.
As for the medication example, the only reason we have high prices is because the pharmacutical industry has managed to keep low cost but safer medications that are manufactured in Canada and Europe out of the U.S., though that may change with Canada.
Monopolies in and of themselves are not all bad, it depends on the type of monopoly you're talking about. A vertically integrated monopoly that controls all aspects of a particular product from top to bottom can be both good and bad, depending on whether there are other entities involved in the same business(and yes, you can have a vertically integrated monopoly that has competition). Horizontal monopolies are more along the lines of not being good because of the very fact that they either control all of the competition in the first place or exert enough pressure to keep the competition under affective control.
As it currently is the railroads are neither horizontal or vertical monopolies, even for captive shippers, though it would be smart of them to start looking at vertically integrating other complimentary services(as CN appears to be doing).
GERALD L MCFARLANE JRHe's a professional lawyer that advocates for shippers, what do you expect him to say... He also dismisses that railroads have to pay for their own right-of-way and infrastructure, something that neither trucking companies nor airlines fully compensate the government for, which you could also say about barge companies. If trucking and airlines had to fully pay for their infrastructure then it would be only the 2% that could afford to use their services.
So what? Shippers have an interest that is opposed to the railroads. They hire lawyers to represent their interests and take their case to Congress in hopes of getting new regulations to favor their interests. Railroads push back with their lawyers. It is a perpetual grievance. Part of the shippers' lawyers' job is to present their case to the people in hopes of gaining public support for their cause as they present it to Congress. There will never be a conclusion as to what it fair for everybody.
The objection that the rails own, maintain and pay taxes on infrastructure can be overcome by government ownership and maintenance of tracks as they are in almost every other country. The rails would pay access charges.
charlie hebdo You don't believe in a free market?
You don't believe in a free market?
Thanks to Chris / CopCarSS for my avatar.
charlie hebdo The objection that the rails own, maintain and pay taxes on infrastructure can be overcome by government ownership and maintenance of tracks as they are in almost every other country. The rails would pay access charges.
Murphy Siding charlie hebdo The objection that the rails own, maintain and pay taxes on infrastructure can be overcome by government ownership and maintenance of tracks as they are in almost every other country. The rails would pay access charges. Uncle Sam could just buy the railroads with all that loose change laying around?
Uncle Sam could just buy the railroads with all that loose change laying around?
It's a sound investment in our economy. We did that with the national and later Interstate highway system and our airways.
charlie hebdo Murphy Siding charlie hebdo The objection that the rails own, maintain and pay taxes on infrastructure can be overcome by government ownership and maintenance of tracks as they are in almost every other country. The rails would pay access charges. Uncle Sam could just buy the railroads with all that loose change laying around? It's a sound investment in our economy. We did that with the national and later Interstate highway system and our airways.
Murphy SidingUncle Sam could just buy the railroads with all that loose change laying around?
Works for me.
It's been fun. But it isn't much fun anymore. Signing off for now.
The opinions expressed here represent my own and not those of my employer, any other railroad, company, or person.t fun any
If you want to read a prime example of why captive shippers need some form of enhanced competition; read the story posted elsewhere on this forum about how UP is trying to jack around a customer in Saugus, CA in their attempt to implement precision scheduled nonsense.
Juniata Man If you want to read a prime example of why captive shippers need some form of enhanced competition; read the story posted elsewhere on this forum about how UP is trying to jack around a customer in Saugus, CA in their attempt to implement precision scheduled nonsense.
+1
I think some railroad CEOs need to ask what is it that they do best. The answer should be providing reliable freight transportation to customers. Maintaining an infrastructure is not their core mission.
charlie hebdoI think some railroad CEOs need to ask what is it that they do best. The answer should be providing reliable freight transportation to customers.
And this is the crux not only for railroads, but for much of diversified business in America since the 1960s.
The criterion used, and taught in business schools, is 'maximizing stakeholder value' (changed for essentially PC reasons from the old 'maximizing shareholder value'). I think of this as no different from William H. Vanderbilt's explanation of 'the public be damned' (and the shippers be charged what the traffic will bear) -- maximize the return to the owners, and provide whatever level of service does this safely. (To the stream of return to the owners.)
I have argued for years in teaching consultants that companies aren't in the business of 'making money' (only the Treasury or a few select organization can do that): they're in the business of executing their 'core competencies' (insert buzzwords of choice here) and if they do that in a sufficiently agile and responsible way, they'll make as much money out of the supposedly market-driven economy as possible.
Of course this hasn't applied to railroads recently, and in fact I find it hasn't applied during a remarkable number of years or to a remarkable number of railroads over those years. The problem here is that there's a kind of Gresham's law that applies to corp fi in a three-month-analyst's-report driven world: expedient management drives out responsible. When a firm like Mantle Ridge puts opportunity capital in a railroad, it's no surprise they'll work things to get it out, and as much as they can thereafter. This is what passes for "investment" for all too many who could care less where their investment is 'diversified' or 'conglomerated' as long as it produces the greatest nominal dollar return (or associated tax credit or whatever).
In contrast to this is Buffett's theory of value investing, which was critical in his acquisition of BNSF. Watch how upper-level management decisions trickle down to operating procedures and policies there, in light of what you know about Buffett and his management style.
Yes, and the rest of my rather pointed statement?
I agree with what you say, except the term stakeholder•• actually is a softer way of saying that workers and customers should matter in decisions, too, not just shareholders or the executive ranks.
•• a euphemism designed to avoid sounding like socialism
charlie hebdo I think some railroad CEOs need to ask what is it that they do best. The answer should be providing reliable freight transportation to customers. Maintaining an infrastructure is not their core mission.
CSSHEGEWISCH charlie hebdo I think some railroad CEOs need to ask what is it that they do best. The answer should be providing reliable freight transportation to customers. Maintaining an infrastructure is not their core mission. Maintaining the infrastructure is necessary for providing reliable freight transportation as long as railroads own their own infrastructure.
I'm saying they would be serving customers better and make more profits if they did not have the infrastructure cost center. Think of the huge capital infusion as well as a net reduction in operating expenses to maintain it and pay property taxes. On the latter, I would like to see how much they actually pay in official statements. It shouldn't be a secret.
They would pay rental know the form of access fees and the infrastructure could be upgraded. Just think, we might actually have dedicated passenger ROWs.
RE: railroad property taxes. There is a receipt in the County - Parrish records when property taxes are remitted. I came from a small County in CO that had a mention in the weekly newspaper every time the RR taxes were received. It was acknowleged that the RR was, by far, the largest taxpayer in the County.
Sure, but nobody is going to look through county records which in Illinois are by property ID #. The railroads should show this on their reports, but do not. I wonder why?
charlie hebdo Sure, but nobody is going to look through county records which in Illinois are by property ID #. The railroads should show this on their reports, but do not.
Sure, but nobody is going to look through county records which in Illinois are by property ID #. The railroads should show this on their reports, but do not.
My county has mapping that shows all parcels, with their ID number. It's a short jump to the tax records. I figured out how much CSX was paying here a few years ago, but I don't recall the number.
Property taxes were a major reason for abandonments at one point. Minimal traffic, high taxes, it's gone.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
When the B&O was chartered in the 19th Century it was granted property tax exemption in the City of Baltimore for as long as the corporated identity 'Baltimore and Ohio Railroad' continued to exist.
When CSX was forming CSX Transportation in the middle 1980's the bean counters decided to give up that tax exemption and end the corporate identity of the Baltimore and Ohio Railroad, mergeing into the C&O which was then merged into Seaboard (which had been formed with the merger of the Seaboard Coast Line and the Louisville and Nashville) and the total entity became CSX Transportation.
I have no idea how much property tax CSX Transportation is paying for what it owns in Baltimore City.
Never too old to have a happy childhood!
charlie hebdo CSSHEGEWISCH charlie hebdo I think some railroad CEOs need to ask what is it that they do best. The answer should be providing reliable freight transportation to customers. Maintaining an infrastructure is not their core mission. Maintaining the infrastructure is necessary for providing reliable freight transportation as long as railroads own their own infrastructure. I'm saying they would be serving customers better and make more profits if they did not have the infrastructure cost center. Think of the huge capital infusion as well as a net reduction in operating expenses to maintain it and pay property taxes. On the latter, I would like to see how much they actually pay in official statements. It shouldn't be a secret. They would pay rental know the form of access fees and the infrastructure could be upgraded. Just think, we might actually have dedicated passenger ROWs.
Not owning infrastructure doesn’t automatically translate into better customer service, or lower cost... Our RoW is fine being privatized. Tax exemption, credits would do just fine.
charlie hebdo Sure, but nobody is going to look through county records which in Illinois are by property ID #. The railroads should show this on their reports, but do not. I wonder why?
(1) Railroads pay taxes to the states and then the states disburse the railroad taxes paid to the county/borough entities and then the smaller groups.
(2) The reports given to the counties are from the state's financial system. The taxes the railroad does pay directly to any local government are for non-operating properties. (County/Local government has been precluded from collecting taxes for over 100 years, for good reason - they were corrupt and/or inept. Still see some of the local bubbas get in trouble with the feds over the rules )
3.) The railroads (All the Cls. 1's and some of the smarter smaller roads since 1983) have a better idea of what they own and operate over than the county and state highway people do. (They've been checked and audited by the ICC/STB for over 100 years.)....Ever heard of the federal Uniform System of Accounts?
4.) County assessor and GIS people are typically clueless when it comes to railroads. Because they do not directly assess the railroads, they really don't care. (But watch them scream if the federal disbursement check is even late one day.)
CH - Went down the wrong rabbit hole on this one.
Railroads have a stewardship obligation that has to be taken seriously. The PSR folks with the sole "we run trains, period" attitude won't last long if some of the anti-trust or federal exemption rules get pulled. (STB has an obligation, too.)
Yes, I suppose you know best. So tell us then, how much one of the big six pay in property taxes in one year?
charlie hebdo Yes, I suppose you know best. So tell us then, how much one of the big six pay in property taxes in one year?
I'm not MC, but I can look up the info for the county where I live. Total assessed value for CSX is $14,089,318. The 2019 tax bill was $173,629.34.
That's 50 miles of single track main, plus an eight track yard and a ten mile spur, or about $3,500 per mile.
I noted as I was pulling numbers that the property class was "ceiling RR," which I take to mean that there's a limit to what they can assess/charge.
The tax rate works out to roughly 8 cents per thousand.
Cheap. But I also wonder whether or not this is a "deferred" item.
I just skimmed through the CSX 10-K. Nowhere did I see anything concerning property taxes paid out as expenses or deferred as a liability. Perhaps I missed something but it seems odd.
charlie hebdo I just skimmed through the CSX 10-K. Nowhere did I see anything concerning property taxes paid out as expenses or deferred as a liability. Perhaps I missed something but it seems odd.
They're probably a sub-category of a sub-account of a heading you wouldn't think to look in.
tree68 charlie hebdo I just skimmed through the CSX 10-K. Nowhere did I see anything concerning property taxes paid out as expenses or deferred as a liability. Perhaps I missed something but it seems odd. They're probably a sub-category of a sub-account of a heading you wouldn't think to look in.
I looked pretty carefully. Nothing. I noticed the same thing once on another railroad. They list a lot of stuff in great detail. There's not even an OtherTaxes item.
charlie hebdoI looked pretty carefully. Nothing. I noticed the same thing once on another railroad. They list a lot of stuff in great detail. There's not even an OtherTaxes item.
I'm betting that if they were trying to make an issue of how much they pay in property taxes, those numbers would be front and center. As it is, they're paying a lot less that I do per $1,000, and based on what I saw, contribute nothing to any special districts. Just basic county/town/city/village taxes.
tree68 I'm betting that if they were trying to make an issue of how much they pay in property taxes, those numbers would be front and center.
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