Tag: trains

Categories
free trade & free markets general freedom too much government

Mass (Private) Transit

Washington D.C. metro, public transit, train

“Metro is dangling from a fiscal cliff,” hollers last Saturday’s Washington Post editorial headline. The “transit system faces a ‘death spiral’ starting next summer,” according to “the usually stolid pages of Metro’s financial projections.”

The Post informs that Metro’s “systemic budget problems have been compounded by pandemic-​driven revenue shortfalls, inflation and the upcoming expiration of a federal bailout for transit systems.” 

Oh, what a cruel turn of events, Washington’s ill-​mannered and unsafe transit system needs a bailout from local politicians … because the current financial bailout it receives from federal taxpayers is about to fizzle out. 

Life is tough. 

Metro has only about 70 percent of the funding it needs, so get ready for blood-​curdling cries of “drastic service cuts”— until or “unless the region’s elected officials, along with Congress, devise a fix,” The Post tells us.

Hell of a way to run a railroad — not earning a profit. Constantly failing customers and just as regularly begging for more money from politicians who get that moolah from folks like me … who rarely if ever use the mass transit we are told is so essential to us. 

There’s a better way.

“Rail company Brightline began operating trains Friday from Miami to Orlando,” reports The Post, “using the fastest American trains outside the Northeast Corridor to become the first privately owned passenger operator to connect two major U.S. metropolitan areas in decades.

“The debut of the 235-​mile, 3.5‑hour ride completes a $6 billion private investment in Florida.”

With speeds “quicker than Amtrak’s” and fares “comparable to Amtrak’s and competitive with airfare,” Brightline chief executive Michael Reininger talks of “the beginning of a new industry and a blueprint for expanding rail in America.”

Two approaches. One uses my tax dollars and fails. The other uses private investment. 

And seems to be expanding.

Rather than complaining. And begging.

This is Common Sense. I’m Paul Jacob.

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tax policy

Dutch Treat

As long as there are taxes, there will be tax avoidance. This turns out to even be true of at least one government operation:

The state-​owned Dutch railway company NS has managed to cut its Dutch tax bill by at least €250m since 1999 by routing the cost of new trains through Ireland, the Volkskrant reported at the weekend.

The tax dodge means the treasury has lost out on income generated by a company it owns, the paper points out. The finance ministry, meanwhile, is said to be ‘unhappy’ about the arrangement, which it has been aware of from the beginning.

Through some tricky maneuvering, the NS’s Irish financial wing bought trains in Ireland, where taxes are lower, and then rented the new trains to the Dutch public railway. Even though the trains had never run in Ireland.

Ah, the advantages of globalism!

Political posturing then ensued, with talk of “lack of morals” rampant. An economist touted for his expertise on railways charged that the “NS is busy ‘playing at being a company.’ But the NS is not a company but a government service, he said.”

Government service or no, the players at the NS had a very businesslike response, claiming (quite plausibly) that the “tax route” allowed it to “better compete in the market.”

The lesson I draw from this is one some politicians won’t want to hear: High taxes are bad. They cripple enterprise, including government enterprise. When your government operations turn to elaborate tax-​avoidance schemes, you should be planning tax decreases. And accompanying decreases in spending.

This is Common Sense. I’m Paul Jacob.

Categories
folly free trade & free markets national politics & policies Tenth Amendment federalism too much government

Derailing Washington’s Train Fixation

The great age of trains — the 19th century — spawned a few amazing political careers, not excluding the railway lawyer, Abraham Lincoln. Many major railroads depended on moving politicians first, earth and iron second. 

More than ever, today’s passenger rail lines are creatures of the state. Amtrak loses money, and could only be successful as a private operation were politicians able to let its unprofitable lines go.

Congress insists, instead, on putting up more money-​losing railways in as many places as possible. President Obama even tried to get a bullet train put through between Tampa and Orlando, despite the fact that the two Florida cities were too close to each other for a super-​fast train to make any sense. 

Worse for the bullet was the politics.

In 2000, Floridians had voted in high-​speed monorail; in 2004, they voted in greater numbers to kill their own project. Voters realized that, with politicians in charge, railroad projects tended to go runaway.

Perhaps that helped convince Rick Scott, the new governor, to reject the federal government’s offer to pay $2.4 billion of a $2.6 billion bullet train. The billions of “free money” that the Obama Administration promised began to seem, well, costly.

So, of course, the federal government sued. In early March, a Florida court ruled that the governor did indeed have the power to tell the feds to play with trains elsewhere.

A minor victory for railway sanity. A major victory for federalism.

This is Common Sense. I’m Paul Jacob.