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..envelope please...
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<P mce_keep="true">A commercial enterprise is defined by its activities, not by its corporate form. Amtrak is a government owned corporation. The preferred stock is owned by the federal government. The common stock was issued in 1971 to the railroads that contributed capital and equipment; these shares convey almost no benefits, but their current holders declined a buy-out offer by Amtrak. </P> <P mce_keep="true">The objective of Amtrak at its formation was to earn a profit, although it has never come close; in fact, it cannot even cover its operating expenses. It is a government sponsored commercial activity, just like the TVA, Bonneville Power Authority, Lower Colorado River Authority, etc., which are owned by federal or state government authorities. They sell power, often times in competition with investor owned electric utilities, at commercial rates. They are commercial power sellers. </P> <P mce_keep="true">The nation's commercial airlines account for approximately 30 per cent of FAA operations. They pay fuel taxes, licensing fees, etc. to cover their share of the FAA's costs. They also pay landing fees, gate fees, and TSA assessments. They pay federal income taxes, state and local income taxes, inventory taxes and property taxes. In 2008 these taxes and fees did not cover all of the FAA's costs driven by airline operations, thereby necessitating an average federal subsidy of .43 cents per passenger mile. This compares to an average Amtrak subsidy of 22.61 cents per passenger mile. The notion that the airlines do not pay their share of the cost of the federal airways is wrong. The numbers can be found at FAA, USDOT, TSA, OMB, CBO, etc. Anyone is welcome to dig them out. I do so every year and post them to a spreadsheet.</P> <P mce_keep="true">All motorists, including truckers and bus operators, pay a variety of direct user taxes that cover most of the cost of federal and state highways. They also pay federal income taxes, state and local income taxes where applicable, inventory taxes if they are a business, state licensing fees, and property taxes. Whether they pay their proportional share is debatable, but as I have shown in more detail in other postings, most of them cover the tab one way or the other. Only passenger rail requires a large subsidy that is largely paid by nonusers.</P> <P mce_keep="true">As one example, in 2008 J.B. Hunt, one of the nations most successful truckers, in addition to its fuel tax bill, had federal income tax expense of $121.6 million plus $32.2 million in other taxes and license fees. The amount of inventory and property taxes is not set out separately in the company's annual report, but they are probably embedded in the $32.2 million. This is just one trucking company. </P> <P mce_keep="true">Whether the government(s) should fund high speed rail, which was the presenting issue for this thread, or any form of passenger rail, has nothing to do with airlines, trucks, etc. The question is what problem is high speed rail addressing, is it the optimum solution, and can the country afford it? </P>
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