The Boston Globe ran a feature editorial with a photo of a derailed Amtrak locomotive (on its side), using the recent grade crossing tragedy as an opportunity to recommend eliminating all long distance services as a good step in reducing the Federal Budget deficite. Some people reading this will agree, of course. The writer was a political leader from New Hampshire, now retired.
I thought of writing a letter rebuttal, but realized a Jerusalem address would not be particularly approrpriate, for the Boston Globe in particular, which has only one columist with whom I agree on matters regarding life and death here. (The columnist is Jeff Jacoby, and he might just agree with the New Hampshire political leader!) They certainly never printed any other letter I sent them.
So to review, without restating the Globe editorial position in full, which has been stated many times on this forum by others, I would remind railfans that good long distance passenger service is essential for
Maximizing foreign and domestic tourism
Giving elderly and handicapped better mobility throughout the county
Tieing the essential corredor services together into a regional system
Providing emergency transportation in events like Katrina
In certain cases providing the only mobility for specific areas, as the Empre Builder does in winter.
I also think that the editorial in the latest issue of Passenger Train Journal made a good point in that all forms of passenger transportation, auto transportation more than any, receive subsidies, and that if none received subsidies, at least some of the subsidized Amtrak services could be profitable.
Questioning my assertion about auto transportation? What other USA industry has 95% of its real estate free of real-estate taxes?
And then of course there is the hidden subsidy, part of the FAA budget, that subsidizes every passenger at small airports, usually in excess of $1000 per ticket!
If all commercial transport subsidies were eliminated, i.e. direct payments such as those received by Amtrak, the Essential Air Service Program, etc., and the true cost of driving, i.e. cost of protecting overseas oil flows, cost of state and local streets, etc., was reflected in the price of fuel, passenger rail might be able to stand on its farebox take in relatively short, high density corridors. But the long distance passenger train, which accounted for 76% of Amtrak's FY10 operating loss before interest and depreciation, would not be able to make it, with the possible exception of a tourist train or two operated like a cruise ship.
Amtrak's FY10 federal and state operating subsidy was 21.13 cents per passenger mile compared to a federal subsidy of less than a penny per passenger mile for commerical airline passengers and highway users. The airline passenger and motorist subsidies do not include state and local subsidies, which would close the gap between the subsidies received by passenger rail and the other modes of transport. However, the gap would still be significant. Its because of the numbers.
The problem for passengers trains is in the numbers of people carried and, therefore, the number of revenue units that can be spread over the fixed costs. It is a matter of economies of scale. In FY10 Amtrak carried 28.9 million passengers 6.3 billion passenger miles. The airlines, by comparison carried 578.3 million domestic passengers 509.2 billion passenger miles. If one adds in the overseas passengers, the numbers go up significantly. The nation's approximately 210 million licensed drivers racked up more than 3 trillion vehicle miles.
Highways don't pay real estate taxes. True! Neither do waterways, universities, places of worship, airports, public schools, police stations, fire houses, etc. It would not make any sense for most of them to do so, since they are creatures of a government entity. In most instances the entity would be paying taxes to itself, which might make some accountants happy, i.e it would give them a job, but it would not be very efficient.
Amtrak does not pay any taxes; it does not even pay fuel taxes. The rents Amtrak pays the freight railroads to hoist its long distance trains, as well as other short services, would include a small portion of the freight carriers tax burden, which of course would include real estate taxes, but it would not be a material cost. By the same token, I don't believe that any of the commuter railroads in the U.S. pay real estate taxes.
In FY10 Amtrak was only able to cover the Acel and Washingtion to Lynchburg service operating expenses. The other services lost money, even those run on Amtrak's lines that attract no taxes. So, if highways, waterways, and airways should attract real estate taxes, the same should apply for Amtrak, as well as all passenger rail carriers, which would not significantly close the cost gap between it and other modes of transport.
The nation would be better served if Amtak discontinued the long distance trains and concentrated its efforts, as well as the taypayers monies, on operations that at least have a chance of breaking even. That's relatively short, high density corridors.
But I still say that if the government had cultivated passenger rail with the pasion and money it cultivated air and highways for passengers over the same period of time, the subsidy paid to Amtrak would be comperable to air and highway....and all might be higher than they are now and more even with each other.
RIDEWITHMEHENRY is the name for our almost monthly day of riding trains and transit in either the NYCity or Philadelphia areas including all commuter lines, Amtrak, subways, light rail and trolleys, bus and ferries when warranted. No fees, just let us know you want to join the ride and pay your fares. Ask to be on our email list or find us on FB as RIDEWITHMEHENRY (all caps) to get descriptions of each outing.
Comparing rail to air is an apples and oranges red herring. They are two different markets. Very few rail passengers ride end point to end point. A single train serves numerous cities along it's route. Serving all those cities with a single crew and a single aircraft is not feasible. Many of the cities served by rail do not have ANY air service. Rail passenger counts are greatly impacted by the fact that most long distance trains only run once a day and many are frequently not even close to on time. That is not useful transportation.
By the same logic, transportation between distant endpoints cannot be done anywhere near as fast or efficiently by rail as by air. If you use the fact that the long distant train cannot compete between the endpoint cities as an argument to end the service you will be taking the best mass transit option away from the smaller cities along the route who are not served by air.
Dave
Lackawanna Route of the Phoebe Snow
The long distance trains are used by approximately 4/10s of 1 per cent of intercity travelers. If they were discontinued, few people would miss them.
If there is market (need) for public transportation in a community, i.e. smaller towns and cities, it could be met with buses. In fact, many of the smaller communities in California are served by Amtrak's connecting buses.
If the argument is that Amtrak's long distance trains meet a vital public transport need in towns and cities without adequate air or intercity bus service, then the system should be extend to the hundreds of cities in the country that are not currently served by Amtrak. In Texas these would include Abilene, San Angelo, Brownwood, Corpus Christie, Brownsville, etc., etc., etc. These cities have little or no air service. Of course, doing so would be prohibitively expensive, especially given the debt problems of the federal and state governments.
I agree that the system should be extended and that often buses are more cost effective both as connectors to major hub airports instead of subsidizing small airports, and as connectors to both long distance and corridor pssenger trains. Most communter railroads and Amtrak also do pay some contributions to the communities they run through in lieu of real-estate taxes. It is usually a fee for fire and police protection to supplement what their own police and fire fighting servies provide. But of course it is a fraction of what a frieght railroad would pay for the identacle property. But some frieght railroads (short lines) get breaks from local communities also.
I think that it every mode of transportation payed all its costs, certain long distance passenger trains would be profitable. But they might have to be somewhat be redesgned and marketed specifically for the markets they best serve, on an indivdiual route by route basis.
I am living in Jerualem at the present time. Responsibilities and a medical problem prevent visits back to the USA in for the near future. When the time arrives that I can make the trip, the length of stay would probably depend largely on whether Amtrak long distance sevices were still available and permit me to enjoy the wonderful panoramas that a transcontinental trip can provide.
We allowed for the dismantling and the total disregard or our passenger rail system beyond commuter and densly populated corridors (by luck, not by private enterprise business decisions) mainly in the Post War years of the jet plane and the Eisenhower Highway program. (Freight rail suffered by the highway system and the St.Lawerence Seaway). To say the concept of passenger rail in any way is not as good or comperable to the air and highway pracatics of today ignores our lack of intrest and developing the system in a like manner. Now we are at a point in our economy where the whole of the transportation system has to be, and in fact is being, reviewed and studied, and rationalized by envirnomental, economics, and fuel availablities of the future. If intellegence rather than politics pervails, a transportaton system utilizing highway, air, and rail to their individual strengths is possible. In other words, virtually starting from scratch. Air and highway are only so successful because that is what we invested in while ignoring water and rail. By understanding each and using each for its strengths can...and should....mean greater use of rail.
NKP guy If Amtrak eliminates its long-distance routes, there will be no reason for any Congressional support for Amtrak outside of the few states in the Northeast Corridor. Absent that support, Amtrak will die in a few short years, leaving transportation chaos in its wake. Is that good for the country? Is that what some contributors to this Forum want? Will that put the country on a sound fiscal footing?
I have long wondered what the difference is between California, Illinois, North Carolina and others who subsidize significant regional services and the states of the Northest Corridor who bear little/no burden for Corridor infrastructure and operation. Other than history, I know little justification for making the Corridor a special case.
Not necessarily! The Congress is a collection of horse traders. Figuratively speaking! Members from states where passenger rail corridors make sense could trade support, i.e. we will support additional highway, waterway, air services, etc. in your states if you support expanded passenger rail in our states where it makes sense.
Dakguy201 I have long wondered what the difference is between California, Illinois, North Carolina and others who subsidize significant regional services and the states of the Northest Corridor who bear little/no burden for Corridor infrastructure and operation. Other than history, I know little justification for making the Corridor a special case.
You do know that "The Corridor" from Boston to the RI state line IS OWNED by the Commonwealth of Massachusetts and is also used for MBTA Commuter Service. That "The Corridor" from New Haven to the New York State line IS OWNED by the State of Connecticut and used for both MNRR and ConnDOT Commuter Service. And the tax payers like to use the trains. For trips within The Corridor Amtrak is the first choice over Air Travel. It's not just the 30 year old highways into Northeast cities that are a problem, it's the lack of parking spaces at any cost. (try $40 a day to park your car in Boston or New York) Modern, Clean, Electric, take the train
Don U. TCA 73-5735
The question of difference may not be between the two coasts but the perception of those in the middle of the country. I find this is so in politics and, reading between the lines here, in understanding transportation, environmental, and space congestion problems. In the east, rail transportation involves the legacy, philosophies, and physical attributes of the incorporated railroads of the past. On the West Coast there was quicker and more active government approach to environmental concerns both in the air an on the ground. I remember reports of airline pilots about how at night the lights from Boston, MA to Richmond, VA presented one, continuous merger of population centers. Going back 40 or so years, each pair of these centers were controlled by different corporation and governments involving three to six private enterprises and nine states plus the District of Columbia and the Federal government.. The same distance in CA, say, would only be one corporation and no more than a half dozen political entities including state, county and municipal governments. California's smog lead to an early fight against air pollution and congestion and they knew they had to (re)embrace rail. Likewise, the long distances and narrow low lands of the Northwest got them invloved in rail transportation. In the east, too many entities working at cross purposes and not knowing what the other was doing. Eastern industrial population was moving south and west leading some to think that there was no need for expansion and renewal either. In the middle of the country....say from the eastern slopes of the Appalachians to the western slopes of the Rockies into the desserts...these have never been problems to be dealt with with the exceptions of a few industrial corridors in the Mississippi and Ohio valleys. The reverse notation that proves the point is the famound New Yorker Magazine cover dipicting Manhatten Island, the Hudson River, a sliver of land called New Jersey and the USA with California at the uppermost part of the painting followed by the Pacific Ocean: we really don't understand the geography, economy, and sociology of our country at all.
With some people (in Washington), It's all about money, not people!
NKP guy Sam1: Do you see much evidence lately that "horse trading" occurs in Congress? No Ohio Congressman is going to vote for one cent of rail improvement anywhere if he has no dog in that fight. Why should he? And will the GOP members vote for anything the people in Democratic-governed states want? Heck, they even want to end FEMA aid. Sorry, but I think you're practicing wishful thinking. Ain't gonna happen. Fuggeddaboutit.
The annual federal transportation bill, which can be seen in a variety of places, including the debates that are recorded in the Congressional Record, show hundreds of compromises. Unfortunately, given the acrimonious political environment in Washington, they seldom make it into the press.
henry6 If intellegence rather than politics pervails, a transportaton system utilizing highway, air, and rail to their individual strengths is possible. In other words, virtually starting from scratch. Air and highway are only so successful because that is what we invested in while ignoring water and rail. By understanding each and using each for its strengths can...and should....mean greater use of rail.
If intellegence rather than politics pervails, a transportaton system utilizing highway, air, and rail to their individual strengths is possible. In other words, virtually starting from scratch. Air and highway are only so successful because that is what we invested in while ignoring water and rail. By understanding each and using each for its strengths can...and should....mean greater use of rail.
Henry very good short analysis of what happened. If RR improvements had been included in the interstate system who knows what would have happened. Of course an overhaul of the ICC AT THE SAME TIME WOULD HAVE BEEN NECESSARY.
An overhaul of the ICC was long overdue at that time! It should have been done before or immediately after WWII at least. Once the highway system of FDR's CCC was built, the auto and truck took so much away from the railroads followed by air services, especially the PostWar jet age.
henry6 The question of difference may not be between the two coasts but the perception of those in the middle of the country.
The question of difference may not be between the two coasts but the perception of those in the middle of the country.
I'm not quoting your entire passage because it is more of the same lack of understanding of the US between the Appalachians and the Rockies. You lump all those states together as though they were all the same. Perhaps they are in your parochial East Coast mindset. In fact Illinois and Michigan have been in the forefront of the state-subsidized Amtrak services for years. Interest and financial support for realistic and needed corridor passenger rail services (as opposed to the senseless LD trains) are not limited to the coasts.
C&NW, CA&E, MILW, CGW and IC fan
Senseless except for tourism, emergencies, tieing the corredors into a national system, and handicapped and elderly access to the breadth of the country.
schlimm In fact Illinois and Michigan have been in the forefront of the state-subsidized Amtrak services for years. Interest and financial support for realistic and needed corridor passenger rail services (as opposed to the senseless LD trains) are not limited to the coasts.
In fact Illinois and Michigan have been in the forefront of the state-subsidized Amtrak services for years. Interest and financial support for realistic and needed corridor passenger rail services (as opposed to the senseless LD trains) are not limited to the coasts.
So since the GOP want to cancel all short distance trains where does that leave us????
DMUinCT With some people (in Washington), It's all about money, not people!
Ultimately, its about money for everyone. If you think this is not true, try messing with Social Security benefits, military retiree benefits, or teacher retirement pay.
Given the size of the debt, there are many people in the U.S., including this rail traveler, who are concerned about how stuff, including passenger rail, is paid for. I have a legitimate concern about the debt because at the end of the day, if we don't get a handle on it, it could have an even greater deleterious impact on the well being of our society.
Long distance trains are not a serious transport option. They serve less than one per cent of intercity travelers. And they cost American tax payers more than half a billion dollars annually in subsidies. They are wasteful. Advocating the discontinuance of the long distance trains, as I have for years, is not to say that I care more about money than people. I am comfortable in calling for the abolition of the long distance trains because there are suitable alternatives for people who need alternative modes of commercial transport.
Long distance trains are used by less than one per cent of intercity travelers. Implying that one train a day between Chicago and San Antonio or three trains a week between Los Angeles and New Orleans, as examples of the long distance train network, is a serious transport option is a bit of a stretch. Given the paucity of riders on the long distance trains, the argument that the public wants them is not borne out by the per cent of the population that use them. Moreover, the people that use them are not willing to pay for them through the fare box.
There are heaps of activities that the federal government can cut that would have a greater impact on the deficit than cutting out Amtrak's long distance trains. But one does not put out a grass fire, as least in Texas, by throwing a little more gasoline on it. The question is what passenger rail operations in the United States are potentially viable. Whatever else the government does is irrelevant to that question.
In FY10 Amtrak's long distance trains lost $575 million before interest and depreciation. Amtrak claims that it would save approximately $300 million per year if it dropped the long distance trains. A sharp manager, especially one in a competitive business, probably could find greater savings. But lets go with the $300 million. Over 40 years the amount of the savings could grow to $49.2 billion, using the U.S. Treasury's average ten year note interest rate for the last 40 years, which would pay for a lot of equipment that could be used on corridors where passengers trains make sense.
I would end the farm subsidies, as well as many middle class tax expenditures, e.g. the mortgage interest deduction, the homestead property tax deduction, etc. that are harvested by millions of Americans.
Corporations don't pay taxes. Therefore, they don't get tax breaks. Corporate taxes are paid first by the customers that buy their goods and services, or if they cannot be passed on to the customers, which is rare, they are paid by the shareholders and possibly the workers. When a corporation gets a tax break, it flows back to the customers, shareholders, or workers, depending on a variety of competitive constraints.
Amtrak is not a workfare program. It is supposedly a passenger transport company. If the long distance trains were discontinued, many of the employees associated with them probably could find other work within Amtrak or a similar organization. For some of them, at least, Amtrak could give them an early retirement option. Many others could find jobs on an expanded passenger rail network where passenger trains make sense, i.e. relatively short, high density corridors.
I take back seat to no one in my support of trains where they make sense. In August I took the train from Pittsburgh to New York, as well as New York to Hartford, and New York to Washington. But I don't support long distance trains, although I ride them on occasion.
If we can find 40 Billion for Highway System and 15 Billion on the Airlines every year we can find 1.5 or 2 billion a year for Amtrak. 300 MIllion go's to Retirement Fund for other Railroads people into a big pot. We need a Fair and Balance choice in the USA with all three Amtrak, Airplanes, and Bus. It called choice for the people.
"Corporate taxes are paid first by the customers that buy their goods and services"
Another silly red herring. By that logic, I don't pay any taxes either, my taxes are paid with the money I get from my employer, so he must be paying my taxes.
Phoebe Vet "Corporate taxes are paid first by the customers that buy their goods and services" Another silly red herring. By that logic, I don't pay any taxes either, my taxes are paid with the money I get from my employer, so he must be paying my taxes.
I don't know what you mean by red herring. I was responding to a previous post asserting that corporations get tax breaks. They don't because they don't pay taxes.
You are paid by an employer. You are required to file a federal income tax and perhaps a state income tax return if your income is above the stated thresholds.
Most corporations are S Chapter corporations. The profits flow through to the owners, who are required to include them in their income tax returns, just as you would if you owned a piece of the corporation. Most larger corporations file income tax returns on behalf of the owners (shareholders). The taxes appear to be paid by the corporation, but in fact are absorbed by the sources mentioned in my previous post. Likening you personal tax situation to a corporate tax return is incorrect.
This is not the forum for a lesson on taxation. If you are interested, there are numerous articles on the Internet that will walk you through the dynamics of corporate taxation.
By Warren Vieth, Los Angeles Times | April 11, 2004
WASHINGTON -- More than half of US corporations paid no federal income taxes during the boom years of the late 1990s, and those that did were able to shelter much of their income, according to congressional accountants.
The report by the General Accounting Office raises questions about whether the corporate income tax burden is too light and distributed unequally. It could undermine arguments that US companies are overtaxed and provide ammunition to politicians and activists who claim companies are using loopholes to avoid paying their fair share.
By Pat Garofalo on Aug 31, 2011 at 9:20 am
Last year, as Americans across the country grappled with the widespread effects of the Great Recession, tax dodging by corporations and the wealthy cost the average U.S. taxpayer $434, even as corporate profits soared 81 percent. In fact, according to a new report from the Institute for Policy Studies, “corporate tax dodging has gone so out of control that 25 major U.S. corporations last year paid their chief executives more than they paid Uncle Sam in federal income taxes”:
Phoebe Vet By Pat Garofalo on Aug 31, 2011 at 9:20 am Last year, as Americans across the country grappled with the widespread effects of the Great Recession, tax dodging by corporations and the wealthy cost the average U.S. taxpayer $434, even as corporate profits soared 81 percent. In fact, according to a new report from the Institute for Policy Studies, “corporate tax dodging has gone so out of control that 25 major U.S. corporations last year paid their chief executives more than they paid Uncle Sam in federal income taxes”:
Neither this post nor your previous post has anything to do with the point that I was making You cherry pick articles from the popular press and post them as if they are a meaningful response. They are not.
Who is Pat Garofalo? Is he a tax expert? I am a CPA. I have a reasonable working knowledge of taxation, especially corporate taxation. I also have a masters degree in business and economics, which gives me a better than average understanding of the economic consequences of taxation. .
In any given year the stakeholders in a corporation may not incur a federal income tax liability for a variety of reasons. The two most prevalent ones are the company lost money or has loss carry forwards from. In a typical year 25 to 30 per cent of the Fortune 500 lose money. Frequently it is substantial. When a business loses money, it does not pay any federal income taxes, and if the loses are substantial, it can carry the losses forward for many years in accordance with the tax code. Dodging the tax law is not an issue.
Corporations, like individuals, manage their tax liability. Stakeholders in corporations don't pay any more tax than is required by the tax code. The same is true of home owners. Most of them, as far as I know, deduct their mortgage interest and property taxes on their tax returns. So why is managing a corporate tax liability a tax dodge, but managing your personal income tax liability smart tax planning and management?
Executive pay has nothing to do with who pays corporate taxes. Clearly, one can argue that executive compensation, which consists of relatively small amounts of cash and large amounts of performance based stock options, is excessive. But it has nothing to do with corporate taxation, other than to say that it may or may not be a deductible business expense.
The writer of the Boston Globe editorial was former NH Governor Sununu. He was the forerunner of the current shady Republicans. He took millions of dollars from the State workers Retirement fund to mislead the public that he was balancing the budget, but the NH Supreme Court ruled that his move was illegal and the funds had to be returned. He was told to resign as White House Chief of Staff by President George H, W. Bush after it iwas disclosed he spent over $515,000 using military planes for often personal travel, instead of flying commercial. Take no stock in his Amtrak comments.
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