According to USA Today this past Friday on the front page…
Running out of gas on the Freeway is embarrising but over a airport is a little more complicated…
and while we are at it…what is this about Airlines not paying tax on there gas?
Off road use of fuel is not subject to the Federal Highway fuel taxes. Railroads do not pay Federal Highway fuel taxes on their diesel fuel. When railroads fuel their over the road trucks for maintenance personnel they pay the Federal taxes just like anyone else.
Yes, and don’t the RR co’s pay property tax for every bit of ROW? The air is free.
BUT–airports aren’t. You don’t find the airlines building airports. That’s partly federal money and partly civic money or general revenue bonding. IOW you, me and the little girl who lives down the lane pay for airports whether we use them or not. I do realize that many Amtrak depots are funded partially by state taxpayer money (don’t know about DOT). It seems to work well into things like an overall intermodal plan.
ALSO–Air traffic control is on the govt’s dime IIRC. Suppose STB got ahold of gobs of money and decided to undertake a ten-year program to conform all Class One lines’ signals to a uniform standard. Or extend crossing gates and signals if a route has such-and-such amount of traffic to warrant it (or extend gates at busier crossings). People would be crying “socialism” all over the place.
I am not advocating federal takeover of anything that hasn’t already been “took”. But I do think the federal government plays a very active role in subsidizing air and auto (and truck) on the general assumption that a more mobile society is necessary in a more sophisticated economy. [And individual states or transport “region” subsidize commuter rail.] (In the middle ages, if you were a peasant like eighty percent of the populace, “commuting” meant going out your bac
Property Taxes are State and Local taxes, not Federal.
Not sure about airports ( I assume its all determined by who owns them which is usually some government authority) but trucking company land and buildings pay property taxes same as RR’s for their property. However, when it copmes to over-the-road trucking they almost always aren’t paying their true costs for the initial highway and bridge construction cost as well as the stress and damage the loaded ones cause to the roadway, particularly in colder climates. Haven’t discussed this lately with the university transportation researchers I know, but they told me several years ago that the depth of the concrete used in the interstate system should be doubled from what the Fed government required due to the modern day truck loads.
Alphas,
I don’t have any hard figures in front of me, but I can tell you that commercial trucks pay more than their share of the costs of the roadway systems compared to autos. Trucks pay Highway taxes based on the Licensed weight of the vehicle and the miles driven, not at the pump as do autos. The last figure that I heard was several years ago, and if you think it has gone down any, when do taxes ever go down? At that time the average truck was paying in EXCESS of $7000.00 per year just in Highway Taxes. This does NOT include the F.E.T. (Federal Excise Tax) that is also charged on many items such as tires( buy 18 tires, and this tax is substantial by itself) I have heard this “Trucks don’t Pay their Fair Share” many times from people whose only experience with the trucking industry is getting stuck behind a slow truck in the Mountains.
IF YOU’VE GOT IT, A TRUCK BROUGHT IT. And probably hauled it at least three times before you got it. There are few other industries that could bring this country to it’s knees faster than trucks completely stopping. Pray that it never happens, and be Thankful that there are to many independents and not enough Professional Unity to likely ever see it happen.
Doug
The latest figures I saw stated SUVs cause 1/140 the wear and compact cars 1/240 of the wear of a loaded truck on our highways. Bet the I-35 collaspe would not have happened if only cars crossed that bridge. Trucks do not pay their fair share.
Let’s keep it civil. We all love TRAINS, that’s why we’re here. Let’s agree, at least, that more rail service, be it freight, commuter or intercity, would be welcome to reducing the amount of fuel consummed and the wear and tear on overall infrastructure.
Does anyone know if domestic airlines pay airspace flyover charges in the U.S. the way they do in other countries?
~Ignatius
I would be very interested in how these figures were calculated. The average SUV is between 4-6000 pounds, carried by 4 tires with an average tire loading of 1000-1500 pounds per tire. An 18 wheel 5 axle tractor/trailer at MAXIMUM GROSS is 80,000 pounds which averages a maximum of 4,444 pounds per tire on the roadway. Steer tires are allowed 6,000 pounds unless over-sized for which there is a formula to calculate allowable weight. On average the truck tire loading is less than 5 to 1 compared to the SUV, but the study that you are citing claims a damage ratio of 140 times, while only exerting 5 times the weight, that math doesn’t add up. Trucks ARE HEAVIER and DO CAUSE MORE WEAR, I don’t dispute that, but the the taxes paid by trucks IS HIGHER PROPORTIONATELY to the damage caused than what autos pay. This is especially true in areas that allow studded tires, which are illegal on vehicles over 10,000 GVWR.
If the cost/benefit factor was to be figured in the ratio is even more favorable to the trucks, as unnecessary mileage is avoided when possible, as opposed the the average auto trip, how many could be combined or eliminated altogether? How many single occupant autos do you see every day commuting to and from work? Could/Should be A LOT fewer, trucks are filled to capacity whenever possible, which BTW doesn’t necessarily mean that they are AT MAX GVW. 18 tires/5 axles and in 5 1/2 years has NEVER EXCEEDED 54,000# GVW. Using specialized equipment on my Nampa, ID run, which compresses the product into the trailer, I get what on a standard trailer would take approximately 3 1/2 53’ trailers, when was the last time you saw 14 people in a KIA RIO.
Trucks are HEAVIER, they DO CAUSE MORE W
From prior past by Ignatius: “Does anyone know if domestic airlines pay airspace flyover charges in the U.S. the way they do in other countries?”
I don’t think so; we all know there are restricted no-fly areas but the skies are open as far as I know. This is not counting approaches and take-offs because there are places which the airline has to avoid or abate. Out of O’Hare some jets “abate,” basically pull back on the thruster as soon as the airplane has a trajectory in the air, glide hurtle upwards past the sensitive zone and then hope the thrusters kick in again at full power.
Aviation fuel attracts a federal tax. It is 19.3 cents per gallon on general aviation fuel and 21.8 cents per gallon on jet fuel, which is the stuff the commercial airlines burn. This tax, as well as a variety of excise and ticket taxes, funds approximately 80 per cent of the Aviation Trust Fund, which supports a variety of FAA activities. The biggest budget item is air traffic control operations. The remainder of the budget, which is shown as an intergovernmental transfer, comes from the general fund.
Most airport facilities, i.e. runways, taxiways, terminals, support buildings, etc., in the United States were built using municipal or authority bond funds. The interest on these bonds is exempt from federal income tax and, in most instances, from state income tax for residents in the home state of the issuer. The issuer incurs a lower interest rate, as does the buyer, than would otherwise be the case. This means that the cost of the airport is less than it would have been if it was funded by fully taxable bonds, but it is only less by the spread between taxable and non-taxable bonds. The spread is not as great as might be assumed. For example, in today’s environment, the average spread between a fully taxable and non-taxable AAA bond is about 1.30 per cent.
Most nontaxable bonds are purchased by individuals and institutions with a high marginal tax burden. Buying them is a tax mitigation strategy. The cost of the financing is not passed on to the general public, except to the extent that the federal government would have to increase the general tax rates to cover any revenue shortfall caused by tax free financing. The amount of municipal bonds probably is not large enough to cause a shift in general tax rates. It is small compared to the subsidy that home owners get, i.e. ability to deduct mortgage interest, property taxes, etc. from their federal and, in some instances, state income taxes.
I
Airlines should pay road taxes as well as Airports and Airlines should fund improvements to local roads and to rail transit connections to there airports…
Funds for subways and Light rail to the airport should be tapped out of the FAA trust fund in addition to FTA funding…Futhermore Amtrak feeder lines and stations to the airports should be cross susbsidized by the airlines as a matter of social justice
You lose me on WHY airlines/airports should be paying road taxes on something that they don’t USE. The Passengers and Employees that use/work at the airports/airlines DO PAY highway taxes for their trips to and from the Airports in the fuel taxes collected at the fuel pump. The trucks that are a part of servicing the Airports/Airlines are paying Highway taxes based on a weight/miles system explained in my earlier post. Highway taxes are meant to offset the costs of the highways by making those who use them help pay for them, so why Should the Airports/Airlines pay for something more than they already are for the extent that they use them? I guess that Grocery Stores, Movie Theaters, Restaurants and Sports Arenas should also be pay additional Highway Taxes too.
Doug
ignatius:
Only overflights or those in US oceanic airspace if they did not pay fuel taxes.
By FAA regulations, any aircraft flying IFR (instrument flight rules - which includes ALL airline flights) must have sufficient fuel to travel to a designated alternate airport and an still have enough left over to fly for another 45 minutes.
Samantha:
I understand everything you wrote. wow. But I have questions and comments.
1.) Are you studying accounting or tax law?
She/He who asserts must prove, so:
2.) How do you know 80 percent of the Aviation Trust Fund originates in excise and ticket taxes?
3.) Federal/State tax policy on muni-bonds is relevant only to the point that it gives investors an incentive to purchase bonds from governments which do not have the resources without higher property taxes to pay big yields on bonds. From where does your average 1.3 % spread between AAA munis and AAA corporate come?
4.) You wrote:
“In 2007 commercial airline passengers realized an average federal subsidy of ¾ of one cent per passenger mile. This does not include the subsidy embedded in the nation’s airports as a result of tax free financing. Most of it is a sunk cost. It may be relevant in addressing the question of whether the government should have promoted the development of air travel at the supposed expense of passenger rail, but it is not relevant in measuring the amount of government subsidy received by competing modes of transportation. However, even if one doubled or tripled the federal subsidy received by airline passengers, it would still be much less than Amtrak’s average 2007 federal subsidy of 18.60 cents per passenger mile.”
Please clarify using real money and percentages.
I see the point you are trying to make, but I want to see if fleshed out with the figures. Amtrak receives something less than $1 Billion a year directly from Congress. What is that figure compared to the total allotment given to airlines in subsidy form.
When you calculate the subsidy, does it only include direct cash aid, or in-kind benefits like the tax policy on munis?
Just as important, what percentage does the subsidy make of the selected entities’ operating cash. As far as I knew, Amtrak needs much of the mone
Ignatius
I am a retired CPA and Internal Audit Director. I spent most of my working life in banking and an electric utility. They were Fortune 500 companies.
The FAA budget and financial results are on-line. The budget for 2007 was approximately $14.5 billion, of which approximately $2.8 billion or 19.3 per cent of the total budget was an intergovernmental transfer. Actual expenditures for the year ended September 30, 2007, were $14.8 billion, of which $2.3 billion or 15.5 per cent of the total expenditures were transferred from the general fund. This is a fancy way of saying that the feds transferred $2.3 billion from general revenues to the Aviation Trust Fund. Some people appear to think that the transfer exclusively benefited the commercial airlines. This is not true. Controlling airline operations accounts for approximately 30.2 per cent of FAA control activities, i.e. airport and Enroute control. The remainder of the activities is for general aviation and military aviation operating in civilian airspace. Assuming that the intergovernmental transfer was allocated across all FAA activities, the amount of the transfer benefiting the commercial airlines would have been approximately $696 million. In addition, although the FAA supports a variety of airport enhancement initiatives through its small airport improvement program, not all of them have commercial airline service.
Determining the true amount of subsidy received by Amtrak depends on how the data is interpreted. For example, NARP hosted a recent CBS video claiming that Amtrak received a federal subsidy of $1.3 billion for the fiscal year ended September 30, 2007. According to Amtrak’s Monthly Performance Reported for September 2007, which is year end report, Amtrak had a net operating loss of $1.05 billion, which would have been covered by an infusion of federal money. But Amtrak actually received a total of $1.4 in federal paid in ca
That’s domestic overland. A long over water trip will require the alternate plus 30 minutes at 1500 feet (a bunch of gas) and 10% of plan burn on top of that.
Also not mentioned here is that airports charge airlines for weight-based landing fees, storage fees and a fee for every passenger. And fees for all space rented (ops offices, freight offices, counter space, etc) As the high price of gas forces the carriers to consolidate, and offer less seats at a much higher price, pax loads will drop off and the port authorities will have to scramble to keep revenues up. Trains just might become able to compete in price but they are very slow - here in America - for now anyway.
Calling the tax-free advantage of Muni bonds a subsidy is some kind of political statement from someone that loves high taxes, probably. . The “no double taxation” issue was settled ages ago and without it local authorities couldn’t finance anything!
bakupolo:
Glad you didn’t go into supplemental vs scheduled. dispatch w/o alternate, redispatch, part 91 vs 121, ETOPS Would have confused everyoneetc
The deductability of municipal bond interest in the taxpayer’s federal income tax return is not a political statement. It is fiscal policy that is part of the federal tax code. It has been there for many decades, and it is supported by both political parties.
If an individual or group of individuals or an entity can deduct an item from their federal tax return, or take the item as a credit, they pay less tax than would otherwise be the case. Most people view ‘their’ tax breaks as legitimate deductions designed to help meet a valuable social goal. However, when viewed from a distance, deductions and credits look a lot like subsidies in that they underwrite an activity that the beneficiary otherwise might not be able to undertake.
If local governments were not able to issue tax free bonds, they might have to raise local taxes. Theoretically, there would be a corresponding offset because of an increase in federal revenues, which could be passed on to the taxpayers in the form of slightly lower rates. The lower tax rates would apply across the board, as opposed to only the local taxing jurisdiction, and they would tend to be received disproportionately by the wealthy since they pay the greatest share of the federal income tax burden. Or the locals may scale back some of their projects. Tax subsidies frequently cause the recipients to build larger projects than otherwise would be the case.
Double taxation of dividends refers to those paid by business organizations and applies only if they pay federal