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Something between a Sleeper and Overnight Coach

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<p>[quote user="daveklepper"]</p> <p>The coaches would have given a different story, of course, with lots of ons and offs at wayside stations in comparison.</p> <p>Sam1 still doesn't wish to address the arguments for LDs that I present.   Suppose a law was passed:</p> <p>A freight railroad line that provides a decent level of good passenger service is exempt from real-estate taxes.</p> <p>What are the figures?  Would the savings be enough for freight railroads to justify subsidizing a high level of passenger service financially? [/quote]</p> <div><span style="font-size:10.0pt;font-family:'Arial',sans-serif;">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><span style="font-size:10.0pt;font-family:'Arial',sans-serif;">Business taxes are paid ultimately by the people who buy the final output, unless the entity lacks the market power to pass them through, in which case the shareholders and/or workers may have to eat some of them.  This is rare. </span></div> <div> </div> <div><span style="font-size:10.0pt;font-family:'Arial',sans-serif;">Most people don’t understand business taxation. They don't know that they are paying the taxes, which are embedded in the price of the goods and services that they buy.  Paranthetically, when I hear politicians claim that corporations must pay their fair share of taxes, or the government needs to close corporate tax loop holes, it is all that I can do to keep from screaming.  Corporations don't pay taxes.</span></div> <p style="margin-top:12.0pt;margin-right:0in;margin-bottom:12.0pt;margin-left:0in;text-align:justify;"><span style="font-size:10.0pt;font-family:'Arial',sans-serif;">According to the Association of American Railroads, the nation’s Class 1 carriers passed through $960 million in property taxes in 2012.  According to the Tax Foundation, the nation’s property tax bill in 2012 was $440.1 billion, which means the railroads collected 22/100s of one per cent of the total 2012 property taxes.  </span></p> <p><span style="font-size:10.0pt;font-family:'Arial',sans-serif;color:#222222;">In 2012 the average revenue per carload for the Class 1s was $2,390. The average property tax burden per carload was $33.84 or 1.42 per cent of revenue.  The average property tax burden per ton loaded was 55 cents, and the average property tax burden per ton mile was .00056 cents. </span></p> <p><span style="font-size:10.0pt;font-family:'Arial',sans-serif;color:#222222;">In FY14 the long distance trains lost $529.6 million before depreciation and interest.  Amtrak does not allocate these items by route.  Assuming, however, the long distance trains wear 10 per cent of depreciation and interest, which appears to be a resonable albeit educated guess, the fully allocated loss would have been $602 million.  </span></p> <p><span style="font-size:10.0pt;font-family:'Arial',sans-serif;color:#222222;">If the Class 1s were relieved of their property tax burden, which is minimal, and the amount in FY14 was the same as FY12, the property taxes could cover the current long distance train deficit and leave $358 million for new routes or enhancements to existing routes.</span></p> <p><span style="font-size:10.0pt;font-family:'Arial',sans-serif;color:#222222;">Shifting the Class I property tax burden to cover the long distance trains deficits would be robbing Peter to pay Paul.  Instead of paying property taxes to various taxing authorities, the railroads would embed the cost of covering the long distance train deficit, as well as any enhancements, in their shipping rates. The long distance train deficit would be covered by the end users,  who buy goods shipped by rail, instead of the federal taxpayers.   </span></p> <p><span style="font-size:10.0pt;font-family:'Arial',sans-serif;color:#222222;">If the Class 1s were relieved of their property tax burden, the taxing authorities that collect property taxes from the railroad probably would raise other taxes or implement new ones to cover their tax revenue deficit.  </span></p> <p> </p> <p><span style="font-size:10.0pt;font-family:'Arial',sans-serif;color:#222222;"> </span></p>
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