Taxing roadways would in effect require the government to tax itself. It would be akin to school districts, municipal governments, etc. taxing themselves. It does not make any sense. It is not going to happen.
An electric utility, for example, has a large, taxable property base. The taxing authorities have a difficult time assessing it for tax purposes.
In the Fortune 250 company that I worked for, we had 10 tax professionals that spent most of their time fussing with the tax appraisers over the fair market value of our property for tax purposes. It is not a simple exercise.
Agreed, taxing roadways would require the government to tax itself. That already happens in various other minor ways, and of course ends up as zero net. But ignoring it entirely means that the full cost of roads is underestimated. Determine what the tax base should be, and then forgive it. That forgiven amount is the subsidy to road users that it truly is.
Looking at a major urban interchange from the air makes very clear how much taxable land has been removed from the rolls. That is a significant lost opportunity cost which should be captured in the balance sheet. Accountants can pretend it doesn’t exist by never including it in any cost/benefit calculations.
The costs for a rail network includes property tax, the costs for your electric utility network includes property tax, and I expect the same applies to pipelines. Only the road users get a free ride. This may be perfectly justified for the private automobile (you and I) but gives a competitive advantage to commercial users.
As to the matter of supplying funds for the maintenance of public roads, it is evident that gasoline tax revenue has fallen because of the increase in the use of cars that rely on electricity for propulsion. Recently, there was a letter to the editor in the local paper wherein the writer was priding himself on reducing pollution by driving either a hybrid vehicle or all-electric vehicle (I do not remember which)–and either ignoring or not realizing that he was not paying his proportional cost towards maintaining the roads he traveled on because he did not buy as much gasoline as someone who relied on gasoline alone does. He rejected the idea of a higher registration tax on his vehicle which would go towards paying his share of road maintenance.
I can’t help but think that having a LD passenger train depart and arrive on time is a heck of a lot more important to business travelers than an accomodation between sleepers and coach and a few dollars saved. Don’t many business people travel on a company expense account?
I don’t think 4 or 6-person compartments or the like would work here, either. Face it, most Americans weigh 50% more than their European counterparts. In the USA we like BIG; it doesn’t have to be good or luxurious, but it has to be big. We simply wouldn’t fit in European-sized rooms on trains.
Also, I can’t believe that single women of any age traveling alone in the USA would want to sleep in a small room in their street clothes with strangers, even of the same gender.
As far as CityNightLine and LD sleeper service, I can attest that they no longer serve Paris or some other big cities. The food service onboard their trains is non-existant or not worth talking about. It seems to me that train travel in Europe is not what it was just a few short, say 2 or 4, years ago. The day trains are fast and on time, but clearly not the experience most older Yankee railfans recall with nostalgia.
Slumbercoach travel years ago was something one did just a few times. After that, one somehow found the money for a roomette. Slumbercoaches were nice to have for variety, but I don’t miss them.
I think what is killing the overnight sleeper trains in Europe is the increase in train speed on those routes. When a 400 mile journey took 8 hours they made sense. But if it now takes only 3 hours most people will opt to take an evening train and enjoy the comforts of a hotel room with full facilities (or reach home).
I once rode a slumbercoach on the Burlington’s Blackhawk in 1969. It was comfortable and reasonable. I thought it was as comfortable as an Amtrak economy sleeper. The sleepy hollow seats in the coaches used on some long distance passenger trains in the 1950’s along with pillow service seems a better idea than couchettes.
I feel the primary traveler in an Amtrak sleeper is a pleasure traveler; not a business traveler. On the last trip I took on the Empire Builder virtually all the sleeping car passengers boarded in either Chicago, Milwaukee, LaCrosse or St Paul. No other sleeping car passengers boarded until Glacier National Park. Nearly all the sleeping car passengers were bound for either Seattle or Portland.
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.
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.
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.
This is fallacious as applied to railroads vs. their competition. Because – if the railroads don’t “really” pay property taxes, their competition (trucks, airplanes, barges) doesn’t really pay property taxes TWICE.
This is so because trucks, airplanes and barges don’t have to build into their rates that which the rails do – the cost of that check written to the county treasurer. (Or, in our state, a check written to the state, which prorates it through the subdivisions.)
In short, they’re forced to pass on to the customer one fewer tax than the rails are, giving them that much of a rate advantage.
Railroads pay (collect) property taxes. But they don’t pay federal fuel taxes on the diesel burned in their locomotives: I may be wrong on this point, in which case someone will correct me, I am sure. In a few states they pay sales taxes on their locomotive fuel.
Railroads don’t pay to use their rights-of-way. They pay for the construction and maintenance of them. The infrastructure is depreciable.
Depreciation is a deductible expense for income tax purposes. It reduces an entity’s tax expense. In the case of a railroad, which is capital intensive, the reduct
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.
This is fallacious as applied to railroads vs. their competition. Because – if the railroads don’t “really” pay property taxes, their competition (trucks, airplanes, barges) doesn’t really pay property taxes TWICE.
This is so because trucks, airplanes and barges don’t have to build into their rates that which the rails do – the cost of that check written to the county treasurer. (Or, in our state, a check written to the state, which prorates it through the subdivisions.)
In short, they’re forced to pass on to the customer one fewer tax than the rails are, giving them that much of a rate advantage.
Railroads pay (collect) property taxes. But they don’t pay federal fuel taxes on the diesel burned in their locomotives: I may be wrong on this point, in which case someone will correct me, I am sure. In a few states they pay sales taxes on their locomotive fuel.
Railroads don’t pay to use their rights-of-way. They pay for the construction and maintenance of them. The infrastruc
It is entertaining to read Sam1 mix up real estate taxes and property taxes and then attempt to use utility industry accounting methods to explain railroad accounting. I agree with you Schlimm but it does bother me a little when the two posters are talking at each other vs with each other and not realizing they are discussing two different items. So allow me a little clarification here for both posters involved in the taxation debate.
To clarify here in Texas for Commercial Entities…Real Estate Taxes are paid on the value of land and buildings or structures on them and is usually assessed externally.
Property taxes are paid on equipment within the building or structure and except for vehicles are usually estimated with a internal assessment using a rendition form as a base. So for example, a restaurant in Texas pays Property Taxes to the County for the equipment used within the building to make the end product served to the customer even though the Real Estate in which production takes place is leased and paid by the landlord. The proprietor submits a rendition form to the taxing authority (appraiser) yearly which estimates the value of the property internal to the structure to be taxed whereas the external land and building is typically appraised via recent sales in the vicinity or some other like means by the appraiser.
The relationship is simplel and refers to both property and real-estate taxes:
If there were a level playing field in ground transportation, it may be more likelyi that freight railroads would finid it useful to have a showcase of good passenger service as their best interface with the public. To me, both real-estate and property taxes on comjmon-carrier railroads to harm. They distort the competition with over-the-road trucking and buses, and they discourage the investment in iincreasing capacity to better serve the public. Even if trucks and buses paid enolugh taxes to support hightway maintenance, they would still get someowhat of a free ride compared to the railroads.
Relationship? Railroads pay property and real-estate taxes for the rigihts of way they use. Buses and trucks do not. This makes the overland transportation pciture unfair. Thus subsidization of LDs is necessary or greater than it would be with fair competition. Fairness would bring more hope for investment in the kind of passenger accomodations discussed on this thread.
The user fees paid by truck, bus, and airline companies are not analogous to real-estate taxes paid by railroads but are analoqous to the expenses of the railroads in building and maintaining the RoW and all its facilities. Truck and bus and airline companies do not pay anything analogous to real-estate taxes on the RofW they use.
Sam1’s attempt to argue rough equivalency between property taxes and user fees is ridiculous, if not deliberately misleading. The difference is as between building and maintaining a hotel and renting a hotel room for the night.
Ah, Schlimm, you wouldn’t be blowing a police whistle on us, would you? (You’d be in bad company.)
The relationship is simply the evolution of an interesting discussion out of one that was uninteresting for its remoteness from reality. What’s to complain of?
Best use of the /sarc tag I have seen in a long time.
But I, for one, am sympathetic to schlimm’s desire to return to a discussion of ‘intermediate’ sleeping arrangements. Seems to me the Chinese have recently ‘re-invented’ Pullman-like arrangements for this sort of thing, and Mr. Payne went to some length in designing bilevel sleeper arrangements that would fit Northeastern clearances. Shouldn’t we revive informed (and considerate!) discussion of things like those?
And save the tax nitpicks for people who want to read about them?
No, not part of the discussion police. I wondered if there was some connection in the topics. However, it appears to be your need to dismiss other topics with contempt (uninteresting for its remoteness from reality) any time you can hijack it for your political/ideological/economics hobbyhorse, which usually has little to do with passenger railroading.
OK, so back to topic. I think they should bring back the Tour O Luxe car the Milwaukee Road used and perhaps even coach seats that convert to beds. I suspect folks would only use or feel comfortable in them for one overnight and the whole curtains thing might not work. Would be curious to see how a modification of the Tour O Luxe would work without impacting coach hauling capacity in number of passengers.
It appears that you or Mike is going to have to explain the Tour-O-Luxe arrangement to me, as I can’t get a search engine to find anything about it …
EDIT: It’s “Touralux” for anyone following the idea. Plenty of hits when you know exactly how to spell it, none otherwise… strange. I’d expect that from 20th-century search technology, but not our ‘modern’ versions that so helpfully fill in what we “ought” to have typed on our way to feeding us the wrong answers to questions we weren’t actually asking… /sarc
GBNorman had this to say about them (Oct 5 2007, on Trainorders):
"Regarding … additional commentary of the MILW Touralux Sleepers, they were so named 1) because they were railroad operated (as distinct from Pullman) and 2) their fare basis was Coach plus Space rather than the usual Pullman First Class rail plus Pullman Space.
The cars were built at Milwaukee Shops and had attractive "light and airy’ interior mo tiff. Comprising 14 open Sections, there was wood veneer paneling, indirect fluorescent lighting, and Robin’s Egg Blue floor tiling The 14 Section cars were assigned to the Olympian, since the class of service was Coach, the Skytop obs was off limits, I’m sure there were intrepid gate crashers even back then (source; lunchtime chats with Jim Scribbins).
Since I have been removed from MILW employment for more than twenty five years, I guess I can say the Touralux business plan was flawed, even though the MILW was the only road to order all-Section cars for "econosnooze’. There simply was not recognition that the open Section was a "goner’; too many Abbott and Costello skits, too many WWII “never again’ experiences. From my compilation above, it should be noted that the 'United and American” of passenger carriage back then, namely the Central and Pennsy, did not order one open Section car.