Bush Budget to Scrap Subsidy for Amtrak

[DSchmitt]

QUOTE: Originally posted by oltmannd

QUOTE: Originally posted by DSchmitt

QUOTE: Originally posted by conrailman

To: Osogrande.
Amtrak Carried 25 Million People last Year, Amtrak is not Dead at all. If Congress gave Amtrak money like the Highway and Airlines 35 Billion for Highways and 15 Billion for Airlines this Year 2005. Amtrak would be in Great Shape. [:)][:D]

Congress does not "give" 35 billion to highways. The Federal government takes money from highway users and redistributes it. The federal highway budget is 100% user fee financed. Most of the highway user fees are spent on highways but some goes to other modes including rail.

However, a subsidy for one mode does not justify a subsidy for another mode. If it did perhaps we should subsidize roller skates.[:o)]

If something is user fee supported, shouldn't it be able to make it as a free enterprise?

What of all the fed gas tax collected on gas that is not burned on fed highways? Is that truly a "user fee"?

Isn't the gas tax just a tax like my property tax?

Should there be a relationship of some sort between where tax is collected and where it's spent?

WWI was paid for with an income tax - what's the relationship?

Where I live, a sales tax is used to build new schools. A property tax is used to pay teachers. A lottery is used to pay for colleges. I don't see any relationship between source and sink in any of these.

I just want to get the most for what I pay in taxes. Which hand Uncle Sam uses to collect it and which pocket he stores it in matter not a bit to me.

There are no Federal owned highways in the public highway system. The highways, roads and streets are owned by the states and local government. The Federal government collects federal user fees and re-distributes the money to the states to be used for highway, road and street projects.

A small amount of the revenue does come from equipment not used on the highway system (highways, streets, and roads) but fuel used in off-road equipment ( farm tractors, contractors equipment, railroad locomotives, etc) is exempt from the highway user fees.

A small amount of the revenue also comes from fuel burned while on on private roads, but there are very few vehicle users who never use a public highway.

There actually are some Federally owned roads. They are in national parks, national forests, national monuments, and military bases. Although owned buy the govermment, they are technically private roads not public highways. They are usually not funded from the budget of the owning agency, not highway taxes.

The Federal Highway taxes are not just another tax they are user fees specifically designated for transportation funding.

"What Is the Highway Trust Fund?
The Highway Trust Fund (HTF) was created by the Highway Revenue Act of 1956 (Pub. L. 84-627), primarily to ensure a dependable source of financing for the National System of Interstate and Defense Highways and also as the source of funding for the remainder of the Federal-aid Highway Program. Prior to the creation of the HTF, federal financial assistance to support highway programs came from the General Fund of the U.S. Treasury. While federal motor fuel and motor vehicle taxes did exist before the creation of the HTF, the receipts were directed to the General Fund, and there was no relationship between the receipts from these taxes and federal funding for highways. The Highway Revenue Act authorized that revenues from certain highway-user taxes could be credited to the HTF to finance a greatly expanded highway program enacted in the Federal-Aid Highway Act of 1956. In the original Highway Revenue Act of 1956, the crediting of user taxes to the HTF was set to expire at the end of fiscal year 1972, but since then, legislation has been passed to extend the imposition of the taxes and their transfer to the HTF through September 30, 2005.
Like other federal trust funds, the HTF is a financing mechanism established by law to account for tax receipts that are collected by the federal government and are dedicated or "earmarked" for expenditure on special purposes. Originally, the HTF focused solely on highways, but later Congress determined that a portion of the revenues from highway-user taxes dedicated to the HTF should be used to fund transit needs, resulting in a 5 cent increase in the gas tax (to 9 cents), of which 1 cent would go towards transit, to help fund the new account. As a result, the Mass Transit Account was created within the HTF effective April 1, 1983. Although never formally described and named, the portion of the Highway Trust Fund outside the Mass Transit Account has come to be called the Highway Account and receives all HTF receipts not specifically designated for the Mass Transit Account.
How is the HTF funded?
Tax revenues directed to the HTF are derived from excise taxes on highway motor fuel and truck-related taxes on truck tires, sales of trucks and trailers, and heavy vehicle use. The Mass Transit Account receives a portion of the motor fuel taxes, usually 2.86 cents per gallon, as does the Leaking Underground Storage Tank Trust Fund, usually 0.1 cent per gallon. The General Fund receives 2.5 cents per gallon of the tax on gasohol and some other alcohol fuels plus an additional 0.6 cent per gallon for fuels that are at least 10 percent ethanol. The Highway Account receives the remaining portion of the fuel tax proceeds.
How are the Taxes Collected?
Most excise taxes credited to the trust fund are not collected directly by the federal government from the consumer. They are, instead, paid to the Internal Revenue Service by the producer or importer of the taxable product (except for the tax on trucks and trailers, which is paid by the retailer, and for the heavy vehicle use tax, which is paid by the heavy vehicle owner.). Hence, the 18.3-cent federal gasoline tax and the 24.3-cent diesel tax included in the price at the pump are, in effect, a reimbursement to the producers and distributors for taxes they have already paid. "

This is the link to the Federal site where more up to date info may be found.

http://www.fhwa.dot.gov/

[oltmannd]

So, since the fed gas tax is collected on each gallon and then redistributed to the states to use for projects, it is even less a "user fee" than I thought.

States like NJ with many gallons of gas purchased, but with few federally funded highway projects are subsidizing states like Kansas, with fewer gallons purchased but massive Interstate reconstruction going on. Those NJ "users" are paying for those Kansas "consumers".

Also, down here in GA, the state gas tax only covers about 50% of the annual state highway budget - the rest comes from income & sales tax revenue - hardly a "user fee".

If a gas tax is an efficient way to fund and maintain roads, then so be it. But there is nothing sacred, true or even fair about money collected from one mode only being used for that mode. If the use is a true "public good" then the funding source should be irrelevant. Revenue source and expenditures can be completely uncoupled. The only issues would be the "fairness" of contribution and "public good" of the spending.

[Anonymous]

QUOTE: Originally posted by oltmannd

So, since the fed gas tax is collected on each gallon and then redistributed to the states to use for projects, it is even less a "user fee" than I thought.

States like NJ with many gallons of gas purchased, but with few federally funded highway projects are subsidizing states like Kansas, with fewer gallons purchased but massive Interstate reconstruction going on. Those NJ "users" are paying for those Kansas "consumers".

Also, down here in GA, the state gas tax only covers about 50% of the annual state highway budget - the rest comes from income & sales tax revenue - hardly a "user fee".

If a gas tax is an efficient way to fund and maintain roads, then so be it. But there is nothing sacred, true or even fair about money collected from one mode only being used for that mode. If the use is a true "public good" then the funding source should be irrelevant. Revenue source and expenditures can be completely uncoupled. The only issues would be the "fairness" of contribution and "public good" of the spending.

oltmannd, I don't follow your logic. You say that a tax collected from one mode and returned for use for that mode is not "fair". You are certainly entitled to your opinion, but you'r completely off base when analyzing the attributes of fairness. User fees are the fairest form of taxation there is because the payer is also the primaray beneficiary. "Progressive" income taxation is the most unfair, because it forces one segment of society to pay most of the benefits of another segment with little guarantee of a beneficial return. Most general taxes (flat taxes, sales taxes, property taxes) lie somewhere in between, with each payer recieving at least a portion of a benefit in return.

If our nation ever takes an active course in tax reform, the first thing to do would be to identify those sectors in which a user fee can be implemented. The "pay as you go" system is the most accountable form for determining if people are willing to pay for things such as passenger rail services.