FY12 ridership was 31.2 million

[NAVYBLUE]

Apparently one reason airlines like raising fees instead of fares is that the former are not taxed -- thus increasing our subsidies to the airlines.

As airlines raise fees instead of fares, taxpayers pick up the tab

There's a 7.5 percent federal tax on every airline ticket. The money goes into a fund that pays for the air transportation system: airports, capital improvements and the operation of the Federal Aviation Administration.

But in nine of the past 11 years, the amount of money flowing into that fund — mostly ticket-tax revenues — has fallen short of projections. When that happens, Congress can increase general fund contributions to cover the FAA's budget. In both fiscal 2009 and 2010, Congress appropriated an additional amount of almost $1 billion.

When the airlines kept ticket prices down by shifting $12.8 billion to baggage fees, they also saved almost $964 million in federal taxes they would have owed if they had hiked ticket prices by that amount.

"Fortunately" AMTRAK does not earn a profit so they don't pay corporate income tax. They used to pay state and local taxes. Does anyone know if they still do ?

N AVYBLUE

 

[AlanB]

Apparently one reason airlines like raising fees instead of fares is that the former are not taxed -- thus increasing our subsidies to the airlines.

As airlines raise fees instead of fares, taxpayers pick up the tab

There's a 7.5 percent federal tax on every airline ticket. The money goes into a fund that pays for the air transportation system: airports, capital improvements and the operation of the Federal Aviation Administration.

But in nine of the past 11 years, the amount of money flowing into that fund — mostly ticket-tax revenues — has fallen short of projections. When that happens, Congress can increase general fund contributions to cover the FAA's budget. In both fiscal 2009 and 2010, Congress appropriated an additional amount of almost $1 billion.

When the airlines kept ticket prices down by shifting $12.8 billion to baggage fees, they also saved almost $964 million in federal taxes they would have owed if they had hiked ticket prices by that amount.

"Fortunately" AMTRAK does not earn a profit so they don't pay corporate income tax. They used to pay state and local taxes. Does anyone know if they still do ?

N AVYBLUE

You need to reread things more carefully, that wasn't corporate income tax that was being talked about in that story the Charlie linked to. That's a ticket tax that gets paid based upon the price of the ticket, by the airline to the Fed. So by having a lower base fee, and making it up with misc. charges, the airlines are now dumping more of the costs of the FAA onto the taxpayers.

And regarding that story you found on the new cars, it was correct at the time it was written earlier this year. But thanks to a stop work order that slowed production for a bit, the first car delivery date has now slipped to next year.

 

[Anderson]

Alan and Charlie,

Thank you for revealing the last chapter of that mystery novel for me. I feel as though a mustachioed villain has suddenly been revealed lurking in the corner...and of course, it's inept federal regulations that are the ultimate culprit. When it it not?

I hadn't realized that the fees weren't subject to taxes that fares were. Mind you, this comes across as a loophole that ought to be fixed...but it does make things make a bit more sense in context (and it explains why they'd pick "variable items" such as baggage to slam with this, since I suspect they'd be slapped down if they tried to have a $1 fare and put everything else in as a set of "fees".

 

[NAVYBLUE]

Apparently one reason airlines like raising fees instead of fares is that the former are not taxed -- thus increasing our subsidies to the airlines.

As airlines raise fees instead of fares, taxpayers pick up the tab

There's a 7.5 percent federal tax on every airline ticket. The money goes into a fund that pays for the air transportation system: airports, capital improvements and the operation of the Federal Aviation Administration.

But in nine of the past 11 years, the amount of money flowing into that fund — mostly ticket-tax revenues — has fallen short of projections. When that happens, Congress can increase general fund contributions to cover the FAA's budget. In both fiscal 2009 and 2010, Congress appropriated an additional amount of almost $1 billion.

When the airlines kept ticket prices down by shifting $12.8 billion to baggage fees, they also saved almost $964 million in federal taxes they would have owed if they had hiked ticket prices by that amount.

"Fortunately" AMTRAK does not earn a profit so they don't pay corporate income tax. They used to pay state and local taxes. Does anyone know if they still do ?

N AVYBLUE

You need to reread things more carefully, that wasn't corporate income tax that was being talked about in that story the Charlie linked to. That's a ticket tax that gets paid based upon the price of the ticket, by the airline to the Fed. So by having a lower base fee, and making it up with misc. charges, the airlines are now dumping more of the costs of the FAA onto the taxpayers.

And regarding that story you found on the new cars, it was correct at the time it was written earlier this year. But thanks to a stop work order that slowed production for a bit, the first car delivery date has now slipped to next year.

AlanB,

I did read it very carefully and understood very well as I did "tax avoidance" as an asst revenue manager for a McDonalds franchise consortium in Northeast Pennsylvania. You always try to shift as many expenses as possible in to tax credit column and as many profit points in to the "tax avoidance" column.

I also understand what the airlines have been doing because I did it. Legal ? Yes. Moral ? That's for others to decide. That is why I am 100% against lobbyists being allowed to meet with Federal legislators on federal property and believe in the flat tax versus the thousands of loophole in the lobbyist inspired tax code. There is $1,000,000,000+ in the "underground" (off the books"} economy that would capture $150-300 BILLION dollars (depending on who you believe) using a 15% flat tax paid at point of sale. If AMTRAK ever was to make a profit they would be at a disadvantage as all their profits would be taxable UNLESS they did a Capital Investment Fee ($50) for revenue enhancement IF the tax code doesn't change. INCOMING !!!!!!

What could we do with that additional income ?

NAVYBLUE

 

[AlanB]

"Fortunately" AMTRAK does not earn a profit so they don't pay corporate income tax. They used to pay state and local taxes. Does anyone know if they still do ?

You need to reread things more carefully, that wasn't corporate income tax that was being talked about in that story the Charlie linked to. That's a ticket tax that gets paid based upon the price of the ticket, by the airline to the Fed. So by having a lower base fee, and making it up with misc. charges, the airlines are now dumping more of the costs of the FAA onto the taxpayers.

And regarding that story you found on the new cars, it was correct at the time it was written earlier this year. But thanks to a stop work order that slowed production for a bit, the first car delivery date has now slipped to next year.

AlanB,

I did read it very carefully and understood very well as I did "tax avoidance" as an asst revenue manager for a McDonalds franchise consortium in Northeast Pennsylvania. You always try to shift as many expenses as possible in to tax credit column and as many profit points in to the "tax avoidance" column.

I also understand what the airlines have been doing because I did it. Legal ? Yes. Moral ? That's for others to decide. That is why I am 100% against lobbyists being allowed to meet with Federal legislators on federal property and believe in the flat tax versus the thousands of loophole in the lobbyist inspired tax code. There is $1,000,000,000+ in the "underground" (off the books"} economy that would capture $150-300 BILLION dollars (depending on who you believe) using a 15% flat tax paid at point of sale. If AMTRAK ever was to make a profit they would be at a disadvantage as all their profits would be taxable UNLESS they did a Capital Investment Fee ($50) for revenue enhancement IF the tax code doesn't change. INCOMING !!!!!!

What could we do with that additional income ?

NAVYBLUE

Ok, Mike, just wanted to be sure since all you mentioned in your post was corporate income tax and Charlie's post had nothing to do with that. So it appeared that you might have misread things.

 

[Anderson]

Apparently one reason airlines like raising fees instead of fares is that the former are not taxed -- thus increasing our subsidies to the airlines.

As airlines raise fees instead of fares, taxpayers pick up the tab

There's a 7.5 percent federal tax on every airline ticket. The money goes into a fund that pays for the air transportation system: airports, capital improvements and the operation of the Federal Aviation Administration.

But in nine of the past 11 years, the amount of money flowing into that fund — mostly ticket-tax revenues — has fallen short of projections. When that happens, Congress can increase general fund contributions to cover the FAA's budget. In both fiscal 2009 and 2010, Congress appropriated an additional amount of almost $1 billion.

When the airlines kept ticket prices down by shifting $12.8 billion to baggage fees, they also saved almost $964 million in federal taxes they would have owed if they had hiked ticket prices by that amount.

"Fortunately" AMTRAK does not earn a profit so they don't pay corporate income tax. They used to pay state and local taxes. Does anyone know if they still do ?

N AVYBLUE

You need to reread things more carefully, that wasn't corporate income tax that was being talked about in that story the Charlie linked to. That's a ticket tax that gets paid based upon the price of the ticket, by the airline to the Fed. So by having a lower base fee, and making it up with misc. charges, the airlines are now dumping more of the costs of the FAA onto the taxpayers.

And regarding that story you found on the new cars, it was correct at the time it was written earlier this year. But thanks to a stop work order that slowed production for a bit, the first car delivery date has now slipped to next year.

AlanB,

I did read it very carefully and understood very well as I did "tax avoidance" as an asst revenue manager for a McDonalds franchise consortium in Northeast Pennsylvania. You always try to shift as many expenses as possible in to tax credit column and as many profit points in to the "tax avoidance" column.

I also understand what the airlines have been doing because I did it. Legal ? Yes. Moral ? That's for others to decide. That is why I am 100% against lobbyists being allowed to meet with Federal legislators on federal property and believe in the flat tax versus the thousands of loophole in the lobbyist inspired tax code. There is $1,000,000,000+ in the "underground" (off the books"} economy that would capture $150-300 BILLION dollars (depending on who you believe) using a 15% flat tax paid at point of sale. If AMTRAK ever was to make a profit they would be at a disadvantage as all their profits would be taxable UNLESS they did a Capital Investment Fee ($50) for revenue enhancement IF the tax code doesn't change. INCOMING !!!!!!

What could we do with that additional income ?

NAVYBLUE

In the department of tax avoidance, I've actually informed one or two groups that I donate to not to bother me for an end-of-year donation, but to talk to me after Jan. 1 instead. Why? If tax rates go up, I want my donations on next year's form, not on this year's.

With that said, I haven't taken tax accounting, but I think Amtrak is carrying about $28 billion in accumulated losses on their books. Even ejecting old losses, Amtrak would presumably have a couple of billion carried forward from the preceding years to "eat through". They'd then have to overcome depreciation on the fleet, on the NEC, etc. first, so you'd need an operating profit somewhere in the range of $600 million first (versus a loss of $350 million or so for last FY and of probably about $250 million once you "dispose of" short corridor losses). Good luck finding that anytime soon, and the Viewliner II order should add another $5-10 million to the depreciation pile, while any government-sponsored car rehabs, car purchases, and/or RoW improvements will also go onto that heap. Every dime of capital funding that Amtrak gets now is depreciation fodder, even if completely funded by the federal government and even if the replacement(s) are expected to be similarly funded.

As to the point of sale bit you raise (horridly off-topic though this is), I don't buy it. I agree that there's a large underground market (I assume you were going for trillions of dollars...you missed a set of zeroes there), but I don't agree that going to a sales tax would capture it. Somehow, I don't think your friendly neighborhood dope peddler is going to file for a TIN for his "operation" and assess sales tax just because of a change in the law...he probably doesn't pay it to the state now, so why would a change in federal law cause him to do so? Likewise, I agree that you'd focus on several million businesses instead of hundreds of millions of taxpayers...but how do you deal with a mostly cash garage sale under these circumstances? Require people to file papers with the federal government to sell old clothes?

 

[trainman74]

Those guns that the TSA have are not used to ensure that someone who steps into an airport buys a plane ticket.

Just wanted to note for the record that TSA agents are not armed.

 

[user 1215]

Those guns that the TSA have are not used to ensure that someone who steps into an airport buys a plane ticket.

Just wanted to note for the record that TSA agents are not armed.

TSA Airport Cops

 

[NAVYBLUE]

Apparently one reason airlines like raising fees instead of fares is that the former are not taxed -- thus increasing our subsidies to the airlines.

As airlines raise fees instead of fares, taxpayers pick up the tab

There's a 7.5 percent federal tax on every airline ticket. The money goes into a fund that pays for the air transportation system: airports, capital improvements and the operation of the Federal Aviation Administration.

But in nine of the past 11 years, the amount of money flowing into that fund — mostly ticket-tax revenues — has fallen short of projections. When that happens, Congress can increase general fund contributions to cover the FAA's budget. In both fiscal 2009 and 2010, Congress appropriated an additional amount of almost $1 billion.

When the airlines kept ticket prices down by shifting $12.8 billion to baggage fees, they also saved almost $964 million in federal taxes they would have owed if they had hiked ticket prices by that amount.

"Fortunately" AMTRAK does not earn a profit so they don't pay corporate income tax. They used to pay state and local taxes. Does anyone know if they still do ?

N AVYBLUE

You need to reread things more carefully, that wasn't corporate income tax that was being talked about in that story the Charlie linked to. That's a ticket tax that gets paid based upon the price of the ticket, by the airline to the Fed. So by having a lower base fee, and making it up with misc. charges, the airlines are now dumping more of the costs of the FAA onto the taxpayers.

And regarding that story you found on the new cars, it was correct at the time it was written earlier this year. But thanks to a stop work order that slowed production for a bit, the first car delivery date has now slipped to next year.

AlanB,

I did read it very carefully and understood very well as I did "tax avoidance" as an asst revenue manager for a McDonalds franchise consortium in Northeast Pennsylvania. You always try to shift as many expenses as possible in to tax credit column and as many profit points in to the "tax avoidance" column.

I also understand what the airlines have been doing because I did it. Legal ? Yes. Moral ? That's for others to decide. That is why I am 100% against lobbyists being allowed to meet with Federal legislators on federal property and believe in the flat tax versus the thousands of loophole in the lobbyist inspired tax code. There is $1,000,000,000+ in the "underground" (off the books"} economy that would capture $150-300 BILLION dollars (depending on who you believe) using a 15% flat tax paid at point of sale. If AMTRAK ever was to make a profit they would be at a disadvantage as all their profits would be taxable UNLESS they did a Capital Investment Fee ($50) for revenue enhancement IF the tax code doesn't change. INCOMING !!!!!!

What could we do with that additional income ?

NAVYBLUE

In the department of tax avoidance, I've actually informed one or two groups that I donate to not to bother me for an end-of-year donation, but to talk to me after Jan. 1 instead. Why? If tax rates go up, I want my donations on next year's form, not on this year's.

With that said, I haven't taken tax accounting, but I think Amtrak is carrying about $28 billion in accumulated losses on their books. Even ejecting old losses, Amtrak would presumably have a couple of billion carried forward from the preceding years to "eat through". They'd then have to overcome depreciation on the fleet, on the NEC, etc. first, so you'd need an operating profit somewhere in the range of $600 million first (versus a loss of $350 million or so for last FY and of probably about $250 million once you "dispose of" short corridor losses). Good luck finding that anytime soon, and the Viewliner II order should add another $5-10 million to the depreciation pile, while any government-sponsored car rehabs, car purchases, and/or RoW improvements will also go onto that heap. Every dime of capital funding that Amtrak gets now is depreciation fodder, even if completely funded by the federal government and even if the replacement(s) are expected to be similarly funded.

As to the point of sale bit you raise (horridly off-topic though this is), I don't buy it. I agree that there's a large underground market (I assume you were going for trillions of dollars...you missed a set of zeroes there), but I don't agree that going to a sales tax would capture it. Somehow, I don't think your friendly neighborhood dope peddler is going to file for a TIN for his "operation" and assess sales tax just because of a change in the law...he probably doesn't pay it to the state now, so why would a change in federal law cause him to do so? Likewise, I agree that you'd focus on several million businesses instead of hundreds of millions of taxpayers...but how do you deal with a mostly cash garage sale under these circumstances? Require people to file papers with the federal government to sell old clothes?

The point of sale scenario has to do with consumer purchases. When said drug dealer buys a new Cadillac Escalade he pays New State sales tax. With a point of sales 15% Federal Income Tax he pays $9,000 federal tax on a $60,000 Escalade at the time of purchase from his ill got money. It only works with a legitimate business like Sears, car dealer, McDonalds, etc who have to send sales tax into the states. No way to capture garage sales, Mom and Pop store who operate out of a cash box, etc who don't pay sales tax as a lot operate off the grid. BUT, the out of cash box people still need to make consumer purchases themselves as we would get the tax revenue from them at the end. It's for the regular retail business that you would capture most the revenue.

Smart move on the tax deferral. If the Bush tax cut and the Obama payroll tax decrease are allowed to expire it is estimated that people over $100,000 will pay about $6,000 more per year and those under $100,000 will pay about $600-$3,000 depending on income, tax bracket and deductions.

Back to AMTRAK. Although I am not an airline OR AMTRAK expert, I would think AMTRAK is at a disadvantage as to maintenance upkeep. While in the Navy, I qualified as an Aviation Warfare Specialist which required me to know the basics of all aircraft systems. I know a little about basic maintenance upkeep and it would seem that AMTRAK trains take a bigger beating than commercial aircraft.. Now I do understand the stress on the airframe, but was the most stress at take off and landing, I would think AMTRAK cars are stressed continuously and at a severe maintenance advantage as far as upkeep. Am I wrong here. ANY FAA certified A&P people out there or diesel train mechs who can help me out. It appears AMTARK will always behind the bubble, unless the new Viewliner and/or Superliners are better maintenance wise.

NAVYBLUE

 

[Nathanael]

It's not a terribly hard statement to back up. The long distance trains don't serve a transit function that cannot be better served, for cheaper, by subsidizing bus service from said communities to airports (with or without EAS funded service).

You are are making blatantly false statements, you should be educated enough to know that they are false.

There are lots and lots and lots and lots of people who cannot fly, should not fly, or will not fly. In fact, that number has been *increasing* thanks to our new fascist grope-and-abuse procedure. But even if that were ended, my fiancee (for example) literally can't walk after an airplane flight, thanks to her arthritis. After a train trip? She's fine.

It's not like those in sleeper or even coach can't afford airfare on those long distance hops.

It's not about the money.

 

[Nathanael]

"Cheap" is relative, but from what I've gathered, the core costs of a day train that covers several hundred miles tend to run somewhere around $10-16 million to run: The Blue Water ran $13.9m, the Adirondack lists $12.9m, the Pennsylvanian $16.4m, and the Illini $20.3m for a twice-daily train (or $10.5m/train). That's costs before farebox and OBS revenue come into the mix.

The LD routes average out at $63.58 per train-mile to run, might be a useful number for estimates.

Averages are stupidly misleading. I suggest you look at route-by-route numbers. The ones which do really badly are the three-a-weeks. Several would do better if more cars could be added.

If we're doing what are basically luxury trips rather than actual essential intercity connectivity, let's price it significantly higher and recover more of the money spent on it.

We're not; this is core intercity connectivity. Without Amtrak, my fiancee would simply have had to decide not to visit her dying father.

 

[Nathanael]

Regarding sleeper pricing, two points:

(1) Amtrak prices the sleepers as high as they can while still filling them up -- that's the stated goal of their pricing system anyway.

(2) So far Amtrak is funding new sleeper cars out of the difference between the federal government's allocation to Amtrak for operating, and the actual Amtrak operating loss (which is smaller). This difference is partly due to those large prices for sleepers, which are much higher than they were a few years ago.

This is why it doesn't make sense to add an extra fee to sleeper accomodations; basically, to put it simply, Amtrak is already charging that extra fee.

 

[Paulus]

It's not a terribly hard statement to back up. The long distance trains don't serve a transit function that cannot be better served, for cheaper, by subsidizing bus service from said communities to airports (with or without EAS funded service).

You are are making blatantly false statements, you should be educated enough to know that they are false.

I'm fairly sure that Greyhound's incremental costs are lower than those of an LD train, but do please provide some factual basis for your assertions since you're asserting that my statements are blatantly false and I should be educated enough to know better.

There are lots and lots and lots and lots of people who cannot fly, should not fly, or will not fly. In fact, that number has been *increasing* thanks to our new fascist grope-and-abuse procedure. But even if that were ended, my fiancee (for example) literally can't walk after an airplane flight, thanks to her arthritis. After a train trip? She's fine.

Physically cannot is one thing, personal unwillingness to fly is quite another.

"Cheap" is relative, but from what I've gathered, the core costs of a day train that covers several hundred miles tend to run somewhere around $10-16 million to run: The Blue Water ran $13.9m, the Adirondack lists $12.9m, the Pennsylvanian $16.4m, and the Illini $20.3m for a twice-daily train (or $10.5m/train). That's costs before farebox and OBS revenue come into the mix.

The LD routes average out at $63.58 per train-mile to run, might be a useful number for estimates.

Averages are stupidly misleading. I suggest you look at route-by-route numbers. The ones which do really badly are the three-a-weeks. Several would do better if more cars could be added.

If you had bothered yourself to click the link, you would have seen a route by route breakdown for every Amtrak route in the country, including long distance. And while the Sunset does quite poorly indeed (though the Starlight and Auto Train are even more expensive to run), the Cardinal is actually below average. Note that the numbers which I presented are highly relevant to the question of turning said thrice-weekly services into daily trains or extending day trains which is why I brought it up in the first place.

If we're doing what are basically luxury trips rather than actual essential intercity connectivity, let's price it significantly higher and recover more of the money spent on it.

We're not; this is core intercity connectivity. Without Amtrak, my fiancee would simply have had to decide not to visit her dying father.

Except that the LD trains are not core intercity connectivity and this is readily apparent by its patronage.

 

[Nathanael]

Except that the LD trains are not core intercity connectivity and this is readily apparent by its patronage.

Again, flatly false. Arguably they're only core connectivity for the physically disabled, but there are a hell of a lot of such people in the US.

Patronage is currently a function of available seats. And there aren't enough.

Greyhound? Have you every *looked* at Greyhound? Well, the trip she took would take a minimum of 4-5 hours longer on Greyhound than Amtrak, on a worse schedule, even after including the extra driving time on each end which Amtrak requires due to less geographical coverage. More transfers, too, and at least three different bus operators (Greyhound is unclear, there may be four). At least one of which *doesn't actually take reservations*, which mean you're *not guaranteed a seat*. Seriously; you show up with your Greyhound ticket and they might let you on, or they might not. And none of them actually publish their schedules, either.

This barely qualifies as connectivity at all.

Air? We've been over this before. Some people really should not fly for medical reasons, and it's a lot more than you think.

Sorry. I'm ticked off at you because your attitude is coming from what I can only call an ableist perspective.