The Sky Is Falling For Amtrak

Someone must have sent out a memo instructing Amtrak supporters to be at their most hyperbolic, most shrill worst earlier this week. I've seen several fairly wacky pleas on behalf of maintaining subsidies for the Hoosier State train, which runs daily between Indianapolis and Chicago.

I've ridden the Hoosier State three times in the past year or so. It's a quaint little train that tends to have two passenger coaches, and plenty of empty seats, on the average day. By Amtrak's numbers, less than 4,000 people ride per months, or 133 per day.

Think about that. We're talking about a political struggle over a train that carries 133 people a day. Glad we've nailed down all the big stuff, like the economy, the wars, our gigantic prison population, and urban decay so that at long last we can fine tune the minutia.

Two subsidies, one federal and one local, are poised to ride into the sunset. From John Ketzenberger at the Indy Star:

Now the $4 million federal subsidy is a lot of money. So is the possible $3 million state subsidy. The Hoosier State line hauls about 3,100 people up to Chicago each month, so the federal per-ticket subsidy is about $107.50. A state subsidy would amount to about $80.60 per ride.

The passenger pays between $38 and $47 for a ticket to ride the Hoosier State line. Apparently the train’s real value, though, is to haul broken cars to Beech Grove and return fixed cars to service.

In this case, Beech Grove maintains 550 good jobs and a $49 million annual payroll if the subsidy is paid. From this Indiana collects more than $1.6 million in income tax and at least twice that in income tax even if the $61 million economic impact estimate’s high.

You could argue the state realizes a net gain in the deal.

You could, but that would be a pretty lousy argument. Let's set aside for now the idea that Amtrak's main business is passenger service, and Ketzenberger concedes the strongest case is for the Hoosier State is something outside Amtrak's core business. So, I did a search on CSX's website, for the cost to transport a car from Chicago to Indianapolis. There wasn't a designation for 'Amtrak passenger coach', so I went with a plain gondola car filled with scrap metal, on the basis it would be heavier than an Amtrak coach, so I would be overestimating the cost. The Horizon coaches weigh about 80 tons, while a gon has a capacity of 110 tons, in addition to the car weight.

So- the cost? $2,443.00 per car. Unfortunately, I can't find info on how many broken cars are hauled to Beech Grove. The best I can do here is to take the cost of the subsidies, which is $7 million. That's good for 2,865 cars per year, or 8 a day. Now, maybe I travel on the wrong day, but I've never seen more than one car hauled on the Hoosier State. Maybe for each of the days I rode and failed to see more cars, there was another day each where 16 extra were lashed to the train for repair. I think I'm being generous here. Amtrak only owns 369 locomotives and 1,384 pieces of rolling stock. Am I to believe that every one of them breaks down every year?

I don't want to see the Beech Grove facilities close. I think we can do better having CSX haul broken cars to Beech Grove at $2,443 than float $7 million in subsidies- especially if we concede that passenger service isn't the best part of the passenger service.

Ketzenberger does provide a clue. If the total subsidy to each rider he cites adds up to $188.10, that's how much the fare needs to be raised to bring it to zero. No need for a political struggle, especially one that sounds so shrill.

Especially over 133 riders/day. It's nutty. That many passengers will cross I-65 in five seconds... when it's moving.

Riding the Hoosier State, wearing a t-shirt with the logo of another of rail's infamous money losers, as my daughter sleeps, blissfully unaware.

I like the Hoosier State, but nobody owes me a ride. Lose the subsidy, hike the fare, and move on.

Indiana To Put A Tax Hike On The Table?

Well, my conservative friends, what do you think about this? From Indy Star:

"If we don't see a really significant improvement from anything I see right now, it'll be extraordinarily difficult next year," Daniels said. "In the 10 months between now and the beginning of the next legislature, our number one priority is going to be to try to maintain Indiana's solvency, Indiana's AAA credit rating, Indiana's position as one of the handful of states that only nicked, as opposed to gouged, education and didn't raise taxes.

"That's going to be a tough thing to bring off."

Tough? Really? Only elected officials committed to large government, and people who take out loans to pay for snacks can talk this way.

In the Kole house, when the income slows, the spending slows. Sure we dip into the savings if it comes to that, but we will cut everything but the essentials if and when it gets desperate.

Essentials carries a strict definition here. Food, mortgage, utilities, gasoline, insurance. By utility, I mean water and electricity. Cable TV? Well, we don't have cable TV. That's a 100% cut. We don't go out to eat when it gets desperate. We don't go out for entertainment in such times. State government?

Since forecasters released new economic projections in December, state revenues have fallen short of projections by $160 million in the past two months. In fact, revenue has missed projections for 17 consecutive months, leading Gov. Mitch Daniels to order 20 percent in cuts to state agencies, a $150 million -- or 6 percent -- cut to state universities, and a $300 million -- or 3 percent -- trim to K-12 schools.

How did this man get the nickname, "The Blade". Call him "The Penknife", or "The Fingernail File". These are more appropriate.

If the objective is to maintain solvency, then get to some serious cutting. I haven't seen any departments closed. Some items have been merged, but I am unaware of anything eliminated. At the very least, if the money isn't there, departments that survive can be cut to 50%, and schools can be cut at least 10%.

Our state government is made up of a bunch of babies. If Daniels and state legislators lack the fortitude, they should get out of the way and let those who have it step in.

"After five years of building a $1.3 billion reserve, it's been shrunk by half in the past eight months, and that's after cutting $800 million of spending," said Ryan Kitchell, director of the state's Office of Management and Budget.

"With revenue continuing to decline at unprecedented double-digit rates, our toughest decisions are still ahead of us."

Bollocks. Libertarians in the statehouse would have maintained the entire reserve. Cutting is not a tough decision, especially when economic forces make it such that explaining the cuts is child's play.

Back From New York

I spent the better part of last week in New York City, helping my friend Steve move. The City is still fun for me, but it appeals to me a lot less than it once did. I'm sure having two little kids at home makes Indiana more appealing than NYC, but there were trends I noticed that I didn't like.

The City is getting dirty again. I noticed a lot more litter everywhere I went.

The panhandling is increasing. Several times, people got on the train for the sole purpose of loudly announcing their personal tale of woe, and trying to pull the heart strings & purse strings. I hadn't seen this in more than 10 years.

Then, after going to a great Indian restaurant, the Jackson Diner in Jackson Heights- one an Indiana recommended to me- I realized that there is an Indian restaurant every bit as good in Fishers (India Sizzling).

I love the full-on ethnic diversity in places like Jackson Heights, in Queens. Indiana positively lacks this. But the tradeoffs? Noise, foul smells, dog crap on every sidewalk, hellish traffic, crowded slow trains, high prices... Feh.

Had a great exchange with a receptionist at the Museum of American Finance, on Wall Street. We got to talking and it came out that I am from Indiana. With the Jets-Colts game coming up, it went like this:

Her: Are you ready for the big game?
Me: What big game?
Her: What do you mean, 'what big game'? My Jets and your Colts!
Me: (Ignoring that they aren't 'ours') Big game? That's in three weeks.
Her: What's the matter with you? The game is this Sunday.
Me: Yeah, but that's not the big game. The Super Bowl is in three weeks. The Jets are a nice tune-up for the Colts.
Her: Uh, hey!

Good museum. Indiana also lacks the sheer volume and range of museums NYC has, and I couldn't have had this banter here at home. Still- nice place to visit, but no longer any desire to live there.

We Vote With Our Feet

This is a theme I have returned to many times over the years, because I myself have done it a few times.

I once lived in Cleveland and worked in suburban Parma, OH. Each city had a municipal income tax of 2%. When I finally gave up on my rough, decaying Cleveland neighborhood and moved to Parma, I gave myself a 2% raise. I got to thinking that I had to be an idiot to stay where the schools sucked, the crime rate was high, my auto and homeowners insurance rates were higher, and my commute was longer besides.

Later, I moved to Indianapolis. The Indiana tate income tax was lower than Ohio's, 3.1% to 7%; the sales tax was lower, then 6% to 8%; the property taxes were then about a third of what Ohio's were. Again, I thought what an idiot I would have to be choose Ohio.

Then we moved to Fishers. Again, the schools are better, the crime lower, the property taxes lower, the county income taxes lower, the insurance rates lower. Yet again, the thought of what kind of idiot I would have to be to choose Indy over Fishers came to mind, and continues to every time I learn of a violent crime in our previous neighborhood.

I expect to see a lot of migration in the next few years, as high tax jurisdictions are exposed for their empty rewards. From an AP report:

The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period — more than any other state, according to census estimates. That is about equal to the population of Syracuse, N.Y.

The state with the next-highest net loss through migration between states was New York, which lost just over 126,000 residents.

Two high-tax states lose population- before the economy really began to tank! It isn't news to me. We're going to see a lot more of it. Just wait until the legacy costs of those states and their cities do to them what they've done to GM, Ford, and Chrysler.

Among other things: California's unemployment rate hit 8.4 percent in November, the third-highest in the nation, and it is expected to get worse. A record 236,000 foreclosures are projected for 2008, more than the prior nine years combined, according to research firm MDA DataQuick. Personal income was about flat last year.

With state government facing a $41.6 billion budget hole over 18 months, residents are bracing for higher taxes, cuts in education and postponed tax rebates. A multibillion-dollar plan to remake downtown Los Angeles has stalled, and office vacancy rates there and in San Diego and San Jose surpass the 10.2 percent national average.

What I observed first-hand about Cleveland seems to hold true anywhere: The combination of high taxes and lousy schools is lethal. People of means and high values flee. Cities become magnets for the poor and the stupid.

In 1950, Cleveland's population was a shade under 915,000. By 2006, Cleveland had lost more than half its population. Chart.

Cities don't learn. Rather than lowering the taxes so as to attract people of means, they are wed to the glories that are their 'services', so they raise taxes evermore in order to keep revenues up, thereby chasing evermore people from their jurisdiction. The population gets poorer and dumber.

There are exceptions. Places like New York can get away with it because of the incredible cultural offerings. But, Detroit? Cleveland? Indianapolis? I think when the legacy costs come home to roost, you will see an exodus from NYC as well.

Blame the highways. Blame 'white flight'- although blacks with means flee all the same. Blame anything, but unless you start looking at tax policy and ask people of means just how much they value the 'services' provided by government, you're going to miss the mark. Notice that people of means leave the places with the most services, and taxes. They prefer to leave what they built behind for others, starting completely new in another area, just to be left alone, away from the greedy hands that gobble taxes.

I will probably vote with my feet again, if Fishers continues to grow, and add services, and employees, and legacy costs. I don't want any of that stuff, but the Bigger Brains create it and fatten it, so I'll eventually flee it.

It should become an environmental cause to lower taxes. Hey- it would prevent sprawl!

(h/t: Duncan Adams, for the California article)

Smoking, Again

It appears that Indiana is poised to consider a statewide ban on smoking in places of public accommodation. No sir, I don't like it.

I don't smoke. Never have. I detest the smell of tobacco smoke. What I do like are property rights.

There's no doubt that smoking can kill you, and that secondhand smoke can also kill you. I'm not advocating smoking or hanging around in smoky bars. But people engage in this behavior, using a legal product, for a variety of reasons, none of which especially needs to be justified to me.

I trust business owners to set their own policies. Some restaurant owners long ago set smoke-free policies as a matter of their business plan, hoping to attract a clientele that prefers a smoke-free atmosphere. But there is clearly also a market for restaurants that permit a post-meal smoke. If the owner permits it, and you chose to walk in, who is harmed?

Some say that the people who work there are harmed. Sure they are, if they choose to work in a smoky environment. Who is taking what gun and pointing it to their heads, forcing them to be there? But, it's their job!

Well, no. It isn't their job. The job, like the building, belong to the employer. The employee is one who agrees to be there, on an agreed-to set of terms. Now, there may be some stupid employees out there, who didn't bother to discuss the terms, or who were somehow non-observant of the conditions of the workplace when they accepted the job of their own volition.

If the employer permits smoking by employees, the smoker isn't 'intervening' into the non-smoker's space. He is smoking in the space provided by the employer. The life, liberty of the property owner comes before the non-property owner who is invited into the building. It's the primacy of the property owner over the visitor that is important.

Consider your home for a minute. Would you not consider it absurd to invite guests over and then have them determine the policies of your home? So, why is a place of business any different?

America is really losing its' way with regards to freedom, and understanding freedom. When anybody but the property owner can dictate the policies affecting that property, there is no freedom, but fascism.

But, since it's clear that there are health risks associated with the use of tobacco, it seems prudent for those offering smoking policies to warn their potential guests. We have warning labels on cigarette packages. There is no reason why we can't have the smoking policy of various establishments clearly posted at all entrances so that informed choices can be made. This way, those who hate smoke, like me, can figure out if we want to enter or not. those who smoke can go where they want to as well.

Seems like a nice, King Solomon compromise solution- One that respects freedom.

Corporate Taxes In America - Too Low?

I frequently hear my friends on the left complaining that corporations are not taxed fairly, which means, not highly enough. The reasoning is that business can afford higher taxes, while individuals struggle.

Let's put that second thought on the shelf for a moment, and look at whether or not corporate taxes in the USA are high or low.

According to The Tax Foundation, the US corporate tax rate is 35%. That's highest in the world, with France right behind at 34.43% and Belgium at 33.99%. Ireland is lowest, at 12.5%.

But those are just federal taxes. Let's not forget that our states add their own corporate taxes. After the state corporate taxes are added, corporations in 24 states by higher taxes than anywhere else in the world. Indiana is among these 24. Only 3 states add zero corporate tax: Nevada, South Dakota, and Wyoming. Wonder no longer why so many corporations are registered in those states. Here's a link to the rankings.

My wife has been urging me to incorporate my business. I have been hesitant. Can you blame me?

Can business afford the taxes? No, but then, they really don't pay them. Individuals do, in the marked-up price that covers these (and so many other) taxes.

Even still, can they afford it? It means that products made in Ireland can be shipped here and still be vastly cheaper than products made here. Ever wonder why we have a trade imbalance? Hmm. Maybe this has something to do with it. Coincidentally, Ireland has been one of the world's economic growth leaders. Hmm. Maybe, just maybe, this has something to do with it.

What is more important? Our ability to compete in the global marketplace? Or, to fund more government? From the Tax Foundation:

24 states have a combined corporate tax rate higher than top-ranked Japan.
32 states have a combined corporate tax rate higher than third-ranked Germany.
46 states have a combined corporate tax rate higher than fourth-ranked Canada.
All 50 states have a combined corporate tax rate higher than fifth-ranked France.

"If federal lawmakers are serious about making the U.S. corporate tax system more competitive globally, they will have to partner with state officials to lower the nation's overall corporate tax burden," Hodge added. "Likewise, state officials should have a vested interest in cutting the federal corporate tax rate because there is only so much they can do to improve their own competitiveness. After all, even corporations in the three states that do not impose a major state-level corporate tax—Nevada, South Dakota, and Wyoming—still shoulder a higher corporate tax rate than France, and 25 other major countries, because of the 35 percent federal corporate rate."

I'd say the corporate tax rate is ridiculously too high. The left may enjoy targeting big, bad corporations as some kind of evil, but funnelling tax money to government is something they actually do with aplomb- to the detriment of us all.

Time Woes

(Marco Island, FL) I've been wanting to comment on the time zone issues facing Indiana for a while, but it seemed like petty nonsense most of the time. It still is, but here's the two cents anyhow.

There are some who clamor for a statewide switch to Central Time. To them I say, please just move one state west. Not only do I strongly prefer Eastern Time, I'd be even happier if Eastern Time occurred one hour earlier than it currently does.

I've been working in the Chicago suburbs for the better part of the last month. Now that DST has ended, dusk begins around 4:30pm, and sunset happens at 5:15! It seems like endless night time, especially to someone who is doing outdoor work on projects that pay by the job rather than the hour, and would dearly love to continue field work beyond a mere 10-hour span. How great Summer EDST was, working outdoors until 9pm! Now I'm vacationing in Florida, far to the east of the eastern time zone, and the sunsets come around 6pm. It's crazy early! I'm not ready to get off the beach yet!

I can understand those in NW Indiana wanting to be linked with Chicago time, what with the obvious business links and the convenience of knowing what time your favorite TV shows will air on the Chicago stations. Apart from that? Darkness before evening? Hermits may not care, but those of us working outside would like to finish the day with natural lighting, thank you very much.

I was always chucking at the opponents of DST who argued against it on the basis that mornings were dark, leaving kids waiting for buses in the scary darkness. Well, where are the complaints about kids arriving home from school in the dark?

Here's the business argument for Eastern Time:

New York City, Boston, Philadelphia, Washington DC, Baltimore, Atlanta, Miami, Pittsburgh, Cleveland, Toronto, Montreal, Detroit.. to say nothing of Buffalo, Rochester, Cincinnati, Columbus, Newark, etc.

Compare that list and the populations there with the list of Central Time cities:

Chicago, Houston, Dallas, San Antonio, New Orleans, Minneapolis, St. Louis, Memphis, Kansas City... with places like Tulsa, Omaha, and Birmingham.

It's really no contest from this standpoint. In fact, Central Time is downright foolish in these terms. But at the end of the day, most arguments are purely subjective- just as my main argument is. I'm not a morning person, and I like daylight late into the day. Morning people seem to complain the most about the recent institution of DST in Indiana. But if you are going to be objective and make a business oriented argument, look no further than the lists of the cities within the zones. Let NW Indiana associate with Chicago, but the rest of the state really belongs on EST.

An Online Petition To Sign

This is pretty straightforward:

To: Indiana General Assmebly, Governor Mitch Daniels

We, the People of the State of Indiana do hereby DEMAND that our State Legislature act immediately to abolish property taxes and institute a fair system of taxation.

Sincerely,
The Undersigned

Follow this link to sign online. I did!

Property Tax Ruckus

When I'm in Indiana these days, I am frequently conducting title searches for AT&T. My starting point can sometimes be the Township Assessor's offices, when I need detailed property information to start before I go pulling deeds and plats at the County Recorder's Office.

So, what a hoot to research at the following Marion County township offices: Washington, Lawrence, and Warren.

The lines were longest and angriest in Washington Township. Understand that there is rarely any kind of wait for me to get to a public computer for research. At the Washington Assessor's this morning, there were two lines with four property owners each. Every waiting room chair was filled. Every cubicle had a deputy reviewing a property with the owner present. All- and I do mean all- were seeking to file a form disputing the new assessed value.

I overheard one man, at wits end, explaining the absurdity of his re-assessment. He bought his property in 2005 at $180,000. It was re-assessed at $240,000. For 2005. He was beside himself, explaining that his purchase represents market price. He was the market for that house in 2005! Shouldn't his purchase price carry the day? Made sense to me. I had great sympathy for him. I thought he was going to burst a vein in his temple.

This scenario was similar at Lawrence and Warren Townships, just not quite as angry.

It pains me that it requires this kind of pain for taxpayers to finally stir. It bothers me more that the nature of the complaints is merely the new assessments. The assessments aren't the root problem. The spending by municipal and county governments is out of control.

The Governor is now in on the grandstanding, hinting at a possible special session to address the problem of property taxes. Yes, there is some good the Statehouse could do- like eliminate property taxes altogether. They won't do that, though. They'll come up with some new shell game that allows the local governments to spend to their hearts' content while providing the facade of tax relief. From the Indy Star report:

"As governor, I will take every step I have authority to take to help Hoosier homeowners," Daniels said in a statement issued by his office Monday night.

Nice rhetoric. Empty rhetoric.

The calls to the Statehouse and the Governor are misplaced. Call the City-County Council in Marion County. Call Mayor Peterson's office. These are the people in charge of the budgets.

Bottom line: if Indianapolis and other local governments weren't spending so much, there wouldn't have been a push to update the assessments. Re-assessing was seen as a way to gain tax revenues without being perceived as raising taxes. It certainly is raising taxes. Really, especially in the case of those on fixed incomes, it isn't merely taxing, it's confiscatory.

Anyhow, I'm sort of glad the people are somewhat awakened to the absurdity of our tax burden. I'm dismayed that what the awakening suggests is that it's okay to tax us at an incredibly high level, but we draw the line when we stand to lose the house. Yikes.

Tax Freedom Day is a concept I have promoted on this blog and on my radio shows in the past. What is Tax Freedom Day? It is the day that we are through working to pay for government. After that day, you are earning for yourself and your family.

This year, in Indiana, you stopped working for the government on April 23. After that you were earning for yourself. State map.

That's nuts. And yet, we accept it. We only draw the line when threatened with losing our homes. Here's a telling quote from the Tax Foundation:

"Americans will work longer to pay for government (120 days) than they will for food, clothing and housing combined (105 days)," said Hodge. "Since 1986 taxes have cost more than these basic necessities. In fact, Americans will work longer to afford federal taxes alone (79 days) than they will to afford housing (62 days)."

My understanding is that the Boston Tea Party was staged over a 1% tax. Oh, to have that kind of vigilance today!

Go to the various tax protests happening Sunday and Monday. From the Star:

• Sunday: "Black Sunday" asks supporters to wear black to show unity and bring signs to Monument Circle from 10 a.m. to 2 p.m. Several groups seeking tax reform are organizing the event.
• Monday: Hoosiers for Fair Taxation, which gathered at the governor's residence July 4, will rally at 5:30 p.m. at the City-County Building Downtown.

Hoosier, or Illini?

It's hard to tell what state I live in these days, as I've been spending more time in Illinois lately than at home in Indiana. The absence is evident in the posts... or lack thereof. I've been on contracts in Danville, Decatur, Dundee- really, any place in Illinois that begins with a 'D'. It's good work, all for AT&T. I've worked 121 sites in the past 60 days or so.

Anyhow, I sadly missed out on Andy Horning's latest political activity, as I even spent the 4th of July working on the road. I am greatly encouraged that at long last Hoosiers are starting to feel a real anger about the state of taxation here. It's a shame it takes real agony to spur real action. But, if the public is at long last awakening, I take stock in it.

It's funny, when I moved from Ohio just 5 years ago, I was thrilled with Indiana, because compared to Ohio, this is a tax haven. Problem is, it's less and less true all the time. It's amazing to me how the situation has deteriorated in these five years, especially in the area of property taxes. Marion County has been astonishingly irresponsible in its' tax policies. It's as though Bart Peterson has a burning desire to drive all people of means out of Marion County.

Anyhow, here is some linkage to Hoosiers for Fair Taxation: Blog. It just launched recently, and has some interesting posts alrady, including one about a hardware store offering a new kind of 'for sale by owner' sign.

Indianapolis Fair Tax Meetup: Link.

Excellent YouTube video clips:

Part 1 of 3: http://www.youtube.com/watch?v=Jv7BTWHolRc
Part 2 of 3: http://www.youtube.com/watch?v=6N_neK0XTuU
Part 3 of 3: http://www.youtube.com/watch?v=81vDJjNXTl8

(I'd like to say at this point that New Blogger sucks. One used to be able to post up videos hosted on YouTube directly, so that the reader could simply click. I guess it's because Blogger is affiliated with Google, and Google competes with YouTube, that this function is no longer available. Yep- New Blogger sucks.)