The reason Menck would probably know is that he was head of one of the major players involved in the formation of Amtrak. If you honestly think that only members of Congress and the Nixon Administration had anything to do with the NRPC's beginnings, and that all of the decision process is on the public record, then you are ignorant of how Washington generally works.
C&NW, CA&E, MILW, CGW and IC fan
The California Zephyr has not run east of Denver for two or three weeks now, although I believe it is scheduled to resume shortly. It would be interesting to study what effect, if any, its absence has has on the communities along the line. Also, Amtrak was bussing Zephyr passengers to/from the Chief in Colorado, and I wonder what numbers chose that alternative.
And Privatize the Interstate Highways and I am with you.
henry6 But Sam, Amtrak is not a private business and cannot operate as a private business as long as Congress keeps things the way they are. If they would set it up as they did Conrail, allow it to make decisions and investments in property, equipment and operations as a business things would be different and you might be able to compare it to a private airline or bus company. But Congress keeps a strangle hold on Amtrak, its finances and it's decision making process, so that it cannot be judged as a company but as another piece of Legislation which is controlled by politics and not sound application of operations and business. As for school lunches....what passenger service can do for an economy just might have bought a lot of lunches for school kids and the whole town, too. Why keep removing passenger trains from the mainstream economy when it can be, and often is, a major part of it. Discussions about Amtrak are mere extensions of discussions about politics and are more often based on political pursuasion rather than real business or even real railroading..
But Sam, Amtrak is not a private business and cannot operate as a private business as long as Congress keeps things the way they are. If they would set it up as they did Conrail, allow it to make decisions and investments in property, equipment and operations as a business things would be different and you might be able to compare it to a private airline or bus company. But Congress keeps a strangle hold on Amtrak, its finances and it's decision making process, so that it cannot be judged as a company but as another piece of Legislation which is controlled by politics and not sound application of operations and business. As for school lunches....what passenger service can do for an economy just might have bought a lot of lunches for school kids and the whole town, too. Why keep removing passenger trains from the mainstream economy when it can be, and often is, a major part of it. Discussions about Amtrak are mere extensions of discussions about politics and are more often based on political pursuasion rather than real business or even real railroading..
Much in all as I love to ride trains (i.e. just came back from a round trip on the Texas Eagle to Dallas), government should not run a commercial business. Amtrak is a commercial business, i.e. a quasi governmental organization similar to the U.S. Postal Service. It is a failed business, to be sure, but it is a commercial business. It competes with other commercial businesses, i.e. airlines, bus companies, etc.
Amtrak is saddled with excessive Congressional oversight. It is to be expected. Congressional authorization pays more than a third of Amtrak's costs. To believe that it will authorize the money for Amtrak and then take a hands off stance is not realistic.
The federal government is not in the airline business. It is not in the bus business or trucking business or barge business. It should not be in the railroad business. If the market for intercity passenger rail will not support it, it should be allowed to die. It should have been allowed to dies in 1971. You and I will never see eye to eye on what is and is not in the public interest or what is the proper role of government in commerce.
Obviously, many of the people who participate in these forums disagree with me. Some have wondered why I participate. In fact, a few have crudely suggested that I butt out. Well, here is the reason.
Drop the long distance trains and rationalize Amtrak. It probably could break even in a few high density, relatively short corridors. Moreover, as the population of the nation continues to grow, there will be more opportunities for passenger rail. I would like to see different competitors put it together on the bases of competitive bidding. And run it like a business.
If this is not sufficient controversy for you, here is some more. I would privatize Amtrak in a heartbeat. Then I would privatize air traffic control, the U.S. Postal Service, etc. And a few others. I would sell the airports to the highest bidder. And I would bid out the operation of commuter rail and local transit systems, with the understanding the government would subsidize them. All with the appropriate regulatory oversight. Sound unreasonable?
The Australians have done it, with the exception of Australia Post. As a result, they have one of the most dynamic economies in the world. Privatization is not the only reason. But it sure helped. And they are not the only ones. But a discussion of the dynamics of privatization is beyond the scope of these forums.
schlimm Sam1: Several people who post to these forums claim that the sponsors of Amtrak designed it to fail. To know that they would have to have access to the minds of the individuals involved. Which means they would need access to the individuals thoughts, which could only be captured by a personal interview or on written documents, i.e. diaries, letters, Congressional Record, etc. No one to my knowledge has produced evidence of these intentions. Loving, Jr., Rush (March 2009). "Trains formula for fixing Amtrak". Trains. In that article, the author mentions that after Fortune magazine exposed the manufactured mismanagement in 1974, Louis W. Menk, chairman of the Burlington Northern Railroad remarked that the story was undermining the scheme to dismantle Amtrak. If you can get hold of a copy of Fortune from 1974, check it out.
Sam1: Several people who post to these forums claim that the sponsors of Amtrak designed it to fail. To know that they would have to have access to the minds of the individuals involved. Which means they would need access to the individuals thoughts, which could only be captured by a personal interview or on written documents, i.e. diaries, letters, Congressional Record, etc. No one to my knowledge has produced evidence of these intentions.
Several people who post to these forums claim that the sponsors of Amtrak designed it to fail. To know that they would have to have access to the minds of the individuals involved. Which means they would need access to the individuals thoughts, which could only be captured by a personal interview or on written documents, i.e. diaries, letters, Congressional Record, etc. No one to my knowledge has produced evidence of these intentions.
Loving, Jr., Rush (March 2009). "Trains formula for fixing Amtrak". Trains.
In that article, the author mentions that after Fortune magazine exposed the manufactured mismanagement in 1974, Louis W. Menk, chairman of the Burlington Northern Railroad remarked that the story was undermining the scheme to dismantle Amtrak.
If you can get hold of a copy of Fortune from 1974, check it out.
Was Louis Menk part of the Nixon Administration that supported the formation of the National Railroad Passenger Corporation (NRPC). Was he a member of the Congressional committee that recommend the legislation that resulted in the formation of the NRPC? If he wasn't, how does he know that the key players formed the NRPC with the intent to have it fail and thereby kill intercity passenger rail in the U.S.?
The only people who would know whether the Nixon Administration formed the NRPC as a sham, with the express intent of killing it off, would be a member of the Nixon Administration or someone on the relevant Congressional committee who intended for NRPC to be a sham. And the only way one would know if that was their intent would be from interview notes or documents that revealed their mind set. It would be a challenge to get that information. If Mr. Menk was not part of the decision making processes, then his views would be hearsay. And if the matter was in court, his views would be dismissed.
Many Americans love a conspiracy. Forming Amtrak as a ruse to destroy intercity passenger rail is grist for their mill. However, there is little evidence to support the theory that Amtrak was formed with the intention to kill it off.
Sam1 Several people who post to these forums claim that the sponsors of Amtrak designed it to fail. To know that they would have to have access to the minds of the individuals involved. Which means they would need access to the individuals thoughts, which could only be captured by a personal interview or on written documents, i.e. diaries, letters, Congressional Record, etc. No one to my knowledge has produced evidence of these intentions.
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.
Unlike defense or education or internal security, Amtrak is a commercial enterprise. It was expected to function as a business and as such pay its way.
If Amtrak, which is an intercity carrier, is a public service, then so too are the airlines, intercity bus companies, etc. They are not. They are commercial businesses that are expected to cover their costs and provide a return to their shareholders. When they fail to do so, as heaps of them have, they go out of business.
Amtrak's budget is indeed a rounding error compared to the federal budget. But that is a poor benchmark. Amtrak's competitors are expected to cover their costs. Why should intercity passenger rail be off the hook? What makes it so different? Moreover, what the government spends on other activities is irrelevant to what it should devote to intercity passenger rail.
Rounding errors have a way of compounding. Amtrak has lost an average of $56.6 million a month since its start-up in 1971. Using the average 10 year Treasury Note interest rate, which is the best indicator of the cost of public funds, had the money that has been lost by Amtrak been invested in Treasury notes, it would be worth $133.7 billion today. And that, amongst other things, would have bought a lot of school lunches.
henry6 But if a tax is determined as a percentage of income or price of product, then the higher the income or cost of product means the higher the tax figure Thus increasing price of product to cover cost of tax is self defeating! Or am I missing something?
But if a tax is determined as a percentage of income or price of product, then the higher the income or cost of product means the higher the tax figure Thus increasing price of product to cover cost of tax is self defeating! Or am I missing something?
Whether a business tax can be passed on to the consumer in the price of the goods and services depends on the elasticity of the demand/price curve. Most business organizations, of which a corporation is just one form, first attempt to pass their tax burden on to their customers. If the market is highly competitive, they may not be able to pass some or all of the tax on to their customers, in which case some or all of it may be passed through to the shareholders or as some studies suggest, to labor.
Frankly, in previous posts, I have outlined in general terms the features of corporate taxation and the economics of taxation. Clearly, doing so was a mistake. Many of the people who post to this or other threads don't understand either.
How corporate taxes function is not political. Deciding who pays the taxes, at what rates, and on what basis, is a political decision. I have never dealt with this issue. I have simply tried to point out, when the issues is raised by someone else, that corporations don't pay taxes.
Deggesty schlimm: "Corporations don't pay any income tax. They just pass it on." Yet another of the pieces of dis-information passed on.... First, I hope that this thread does not degenerate into a political discussion. What is the source of corporations' income on which they would pay tax? The product that they sell to their customers. If a tax is levied on their income, are the stockholders happy that the profits of the corporation are reduced? To attempt to keep the stockholders happy, the corporation calculates how much must be added to the price of the product to compensate for the expense of the tax. To me, this is simple economics. I have no idea as to how the cost of attempting to reduce taxes compares with what the taxes would be if no such attempt were made. Does anyone else contributing to this thread know?
schlimm: "Corporations don't pay any income tax. They just pass it on." Yet another of the pieces of dis-information passed on....
"Corporations don't pay any income tax. They just pass it on."
Yet another of the pieces of dis-information passed on....
First, I hope that this thread does not degenerate into a political discussion.
What is the source of corporations' income on which they would pay tax? The product that they sell to their customers. If a tax is levied on their income, are the stockholders happy that the profits of the corporation are reduced? To attempt to keep the stockholders happy, the corporation calculates how much must be added to the price of the product to compensate for the expense of the tax. To me, this is simple economics.
I have no idea as to how the cost of attempting to reduce taxes compares with what the taxes would be if no such attempt were made. Does anyone else contributing to this thread know?
1. The initial comments about corporate taxes were very political.
2. If every cost or expense can be merely added onto the price of products, I guess that means you don't believe in the free market to determine prices.
NKP guy I ride Amtrak long distance trains just about whenever I travel and I don't appreciate being told they "are not a serious transport option." They certainly are to me and many thousands of others! Sam1, your concern for the deficit is touching. But how does that square with the thousands of Amtrak employees who would be thrown out of work if the long distance trains would be dropped? How much would their unemployment cost taxpayers in many ways? The equipment would need to be sold off, the real estate, too, and for what good purpose? How would this help the USA in a time of recession? What miserably small amount of money would be saved, at the price of permanently destroying a travel option that has taken forty years to build and that the public, by every measure, wants and needs? With Amtrak destroyed (see my earlier comment about the lack of any future support for Amtrak if the long distance trains are axed), and airlines increasingly abandoning small-town America, just how would this serve our nation? It saddens me beyond words to see so-called railfans wanting to destroy long distance passenger trains because they believe they "are not a serious transport option." Tell that to the customers who have to buy their tickets 6 or 8 months ahead of travel in order to get a seat or room. Want to save the real federal government some real money? How about ending the farm subsidies or corporate tax breaks which cost taxpayers infinitely more than Amtrak's pathetic subsidy? Are you in favor of that? Or just killing my and the public's remaining interest in trains?
I have to agree with this - I don't travel by plane anymore, the TSA and 'security theatre' crowd has made it much too painful unless I want to pony up for charter flights or purchase my own aircraft. I drive, but sometimes that's just not practical for long distances - and can really be joyless if you have to drive really long hours and deal with traffic in large population centers.
It's become popular to adopt the 'it doesn't benefit me, so it benefits no one' attitude, locked in step with the 'everything has to be self-sustaining and profitable to do it' belief. Public services, by their nature, are not profit-makers - but are offered to make modern life easier, and larger population concentrations possible. We can't keep building more and more highways, we can't make everyone either drive or use an aircraft.
Amtrak's portion of the federal budget (if I remember right) amounts to a 'marginal error of rounding' in terms of the size in comparison to the entire budget. Of course it's wise to look at your processes, see if they can be made more efficient, trim things that are pure waste; but you can't run everything like a business; and some things really shouldn't never be.
Removing the long distance routes from Amtrak makes it a glorified transit train for the Northeastern Corridor - that's all the trains that would be left. There would be no incentive for any states not serviced by that area to pay for it - and Amtrak would perish shortly thereafter. Granted, you'd see some private players step up and cherry-pick over the good routes, but anyone else outside their 'service area' would just be fscked - to put it bluntly.
I imagine that if we were to look into making Amtrak profitable, we'd see a lot of federal mandates that have them literally 'chained to an anchor'. They can't be profitable, they can't even break even - their legacy committments are just too many. If we accept that they are a public service, and that for that service - we have a certain amount of financial responsibility for it's continued availability to ALL; we could find it easier to handle its costs.
For my part in this, it's BECAUSE of Amtrak that I have an interest in trains - and it fuels my desire to participate in model railroading. To see it die, and take the last vestiges of passenger rail transit with it would most likely see the end of model railroading for a sizable portion of the hobbies population, myself included. Transit light-rail and monorails at the zoo aren't enough to keep it alive for me.
I guess so. Then what we've been told is a recession is what I thought it was all along: an implosion of a house of cards set up by the financial community and is designed to fail under its own weight and pressures. The problem is that those of us without money get hurt the most in loss of services and monies due while those with money get government rewards so they can start blowing up the bubble all over again!
Henry,
All you are missing is the rational business man shipping the jobs to make the thing to China or Mexico and then having the politicans blaming the evil greedy investor for wanting a return on his money and increasing the taxes to pay unemployment and calling it a jobs bill.
Mac
Thank you DickH
schlimm "Corporations don't pay any income tax. They just pass it on." Yet another of the pieces of dis-information passed on....
Johnny
Yet another of the pieces of dis-information passed on by our right wing friends so frequently that it may become a settled truth, as in The Big Lie technique. If what sam1 said had even a shred of truth, shareholders would be complaining to the corporations about why they are wasting huge sums of money for lobbyists and accountants to try to get/keep/find tax breaks, depletion allowances, special credits, offsets, etc. from state and federal legislatures.
sam1 is so inconsistent. (S)he disses the writer of the article cited by Phoebe ("Who is ...?") yet says not a word about the writer of the Globe article, who was totally discredited in the GHW Bush administration.
Sam, you got it: the American "C(G?)reed is if it can be done and I will make money, then do it. If it can be done but I can't make money, then it shouldn't be done even if everybody will benefit."
Well said, Sam1. Save me a seat on the Heretic Express.
So lets see if I have the correct picture. If I believe that the best way forward for Amtrak or passenger trains in the United States is to emphasize relatively short, high density corridors, where there is a probability of being able to cover the trains operating costs, in lieu of supporting money losing long distance trains, I am a heretic. Is that correct?
Phoebe Vet You would think that we would have learned that fiscal austerity lesson in 1937.
You would think that we would have learned that fiscal austerity lesson in 1937.
Phoebe: How many people even know what you are talking about? Although I do even the older persons around here have forgotten. Persons on this thread have stated that doing something over and over is schizod but that 1937 lesson has not been learned.
Dave
Lackawanna Route of the Phoebe Snow
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.
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”:
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.
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.
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.
"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.
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.
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