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(erielack) Re: Taxes

The high tax rates tended to disproportionately affect EL and other RR's because they couldn't just pack up and relocate (other than by disinvestment) the way other other industries could (and did). This not only shifted more of the tax burden to RR's (higher tax payments each year) but of course also shrank the revenue base as customers fled. A vicious cycle and double-edged sword. I believe it's true that some states taxed facilities as well as acreage, which gave RR's incentive to rip out yards and sidings, sometimes degrading operating capability.

Paul B

From: "Bill K." <pontiac_@_dreamscape.com>
Subject: (erielack) Re: Taxes

Over on the Lehigh Valley, without commuter service to deal with, with a lot
less property to tax but also a lot less revenue, they managed to show a
small profit the first quarter of 1975 by their own accounting methods.
Given they hadn't made any money since 1956, it was pretty insignifgant, but
it does point in the direction that a lower tax burden might have allowed
the EL to make a profit.


I think you'll find that Conrail dumped the cutoff as much because of the
taxes on it as anything else, doesn't seem like being owned by the
government made them immune to that problem.  Anyone know what the tax rates
actually were, or how it was calculated?  I know some states based them on
not only property but even the number and length of tracks on the property -


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