This is the body of one of my posts in a forum called Volconvo.com. I found it quite rewarding to get this from a single paragraph of prompting, and the message carries through. For some background, my dad is an independent owner-operator working for Triple Crown. Some of this is based on common sense, some is based on his experience and knowledge from some 20 years driving a truck. Sadly, most people don't pay enough attention to this issue. So, without further ado, here is my post:
You know that the tax for diesel is inflationary beyond proportions? At 50 cents a gallon, that would be 75 dollars, per tank, per driver, assuming the average 150 gollon tank (that is the size of my dad's tank)
With the difference being around 50 cents less to make diesel, the highest the tax should bring it to is around 20 cents higher than the price of regular. But the price of gas is sitting at near a dollar higher on average (based on prices seen around Duval, Bradford, and Alachua Counties, FL)
That means they are taking a little less than a dollar for every gallon, almost half of the current Florida prices of diesel is pure and utter price gouging tax.
If someone can get me a list of the people who voted yes to these taxes, I would appreciate it.
I think that this is not only stupid, it is ludicrous and a blot on what is supposed to be a free market economy (ok, the bailouts are another blot, and not what we needed, I propose they should have been required to submit a plan of action and show steps of enacting them BEFORE getting money for the program. I am amazed that did not make it on the political blunders list on the Hannity New Years show. Anyways, back on topic.). I know this is prolly heard from several sources, but if we want the economy to stabilize, we need to take steps to alleviate the financial stress on the backbone of our economy. The owner-operator of an 18 wheeler is not just a big part of that backbone, he/she is the main way we transport things to our stores, where the government gets another good portion of money from sales taxes, especially in high-traffic seasons like Christmas and New Years.
Given the April event, this could balloon. In Jacksonville, Florida, Triple Crown, a company with mostly independent owner operators, has seen a triple growth in resignations from those independent drivers. According to my dad, the number one reason is financial difficulty. The Jacksonville station has lost enough drivers that they have to pay more for people to come in as long range regional drivers, which means the company loses more money and prices for transportation of goods must then go up. Triple Crown services goods for companies including Wal-Mart, GM, and several other big name companies. When their prices for transportation go up, those companies effected must then up the prices of their goods, costing us, the consumers, more money. Soon enough, freight companies who can't afford to continue business close down, lowering the market availability of jobs and services, thus decreasing supply and increasing demand, driving prices still higher.
This continues until we again see prices at the pump and in the store that are huge, except we can't blame OPEC or Iraq situations anymore. The blame can only be put upon our government, because they are not taking care of their economy. Where do you think Obama will look to get his money? The public isn't in the mood for more taxes. So the government looks at workers, instead. They aren't going to target unionized workers, because of the possibility of a strike. No, the first thing he will see are a neglected group of unrepresented people, shunned by society and a target of many stereotypes (The big fat drunkard who has no decorum ring a bell to anyone?).
The other option is that the truckers DO strike, without a union. This WON'T be pretty. You won't see a gradual increase in price anymore. No, it will rocket upward in a fashion to make the air traffic controller's strike look pathetic. Stores will be forced to close down. Big names might go bankrupt because they can't sell what isn't stocked. Our entire country will come to a grinding halt if the people of the trucker's association strike, because the independent contractor is 90% of all regional freight. Sure, trains get the stuff to the cities, but truckers make sure they get to the stores.
I don't want to sound like a doomsday preacher, but anyone with a pithy knowledge of the economic system knows that with drivers resigning, it increases workload and thus prices. If the drivers do strike, we are in trouble.
So, what do we do?
The only thing we can do. If that person can find a list of the voting politicians behind these taxes, then we start flooding anyone in our district, town, region, or state with letters for a reversal. The public has a right to propose a bill to lower those taxes.
Heck, we have a responsibility of our own. We are the voters. Without us, there would be no them. Call me radicalist, I really would not give a flying hoot. our responsibility to ourselves and our families, as well as this country, is to try to set this right.
good luck.
For more of the conversation that was going on, you can follow this link directly to the thread I posted it in:
http://www.volconvo.com/forums/society-rights/24829-trucking-gone-mad.ht...
I like to see public infrastructure including things like highways to the greatest extent possible funded with user fees rather than with general taxes.
With general taxes, people are forced to help pay for infrastructure that they have no interest in and may never use. This seems unfair. With user fees, the people who use the infrastructure are the ones who pay for the infrastructure. This seems like a much more fair way to fund the cost of building and maintaining infrastructure.
Fuel taxes are a pretty good proxy for user fees. People who seldom drive and don't use the infrastructure much buy little fuel and therefore pay little tax. People who drive a lot and buy a lot of fuel pay a lot of tax because they are the ones who use the infrastructure and it is fair and appropriate that they pay for it. Also, wear and tear on highways is directly proportional to vehicle weight. Fuel efficient cars are light and do little damage and because they consume less fuel they pay less tax. Heavy 18-wheelers do comparatively a lot more damage and because they use more fuel they pay more tax which seems fair.
Ultimately, taxes are not paid by truckers but rather by the consumers who bought the goods that were hauled as freight. The trucker has no choice but to pass the cost of the tax onto their freight customer and the freight customer passes it on to their retail customer. In a sense this is also a user fee. Only the people who consume the goods pay the tax. People who buy locally or grow/make their own do not incur the freight tax.
Trucking is a highly competitive industry and there is always an independent trucker who is willing to cut their rate to get a load. If the tax on diesel where to dissappear tomorrow, the truckers would not be putting that savings in their pockets as extra profit. Instead, some trucker would lower their rates to reflect their new lower cost structure and all the rest of the truckers would have to lower their rates to match or they would go out of business for lack of loads.
The difference is that now their would be no fuel tax revenue to pay for road construction of maintenance. The choice would be to fund this construction and maintenance from general tax revenues or to neglect it and revert to third world infrastructure.
It sounds like the Obama Administration and the Democratic Congress are planning on about a trillion dollars of stimulous spending and much of this is going to take the form of infrastructure projects. Somebody is eventually going to be taxed to pay this trillion dollars. I'd like as much as possible for those taxes to be imposed in the form of user fees so that the people who benefit from the infrastructure are the ones who pay for it.
My dad made 210 k gross last year. After the gas, he had half of the money. Then there is registration fee (tag of 1500 plus hidden tax of 550 required to even get the tag. The thing is, THAT is supposed to be what pays for the wear and tear on the road.), other taxes and income taxes on the business (owner operators are considered business owners). My dad kept only 50 k after all of that. Then there are personal taxes, which take another significant amount of money. Over all, he is only 10 k towards a 401k or other retirement plan. The thing is, that is only because my dad is a genius with numbers and can save money on taxes extraordinarily well.
The truckers can't bear much more in taxes. 90% of the resignations tendered are due to financial instability due to the overtaxation. With the economy like it is now, when it finally returns to normal, truckers will be hard pressed to get back in. What happens then?
If there is a profit to be made it will not be hard to get truckers to jump back into trucking. It is one of those businesses with fairly low cost of entry. If good used trucks are sitting around idle then people will be buying them at bargain prices. And while it takes skill to operate a truck it is a skill that can be acquired far more cheaply than for example a college education. It is about the easiest blue collar business to enter. It is much easier to become a trucker than a plumber for example. And while I don't favor it, Mexico is full of truckers who would love to come here and drive trucks.
The big reason that people are having trouble making money in trucking is that there are currently too many truckers and they are undercutting each other for loads which drives all the profit out of the business. It is a supply and demand thing. Truckers will be better off if their numbers are reduced. The best, most efficient operators will survive the tough times and the weaker players will drop out.
The intent of the registration tag may be to pay for road maintenance but it does not even come close to paying the FULL cost. Even when coupled with the fuel taxes they are not collecting enough. Every few years Congress passes a massive highway bill and a lot of the money that funds it comes out of general revenue because not enough is collected in fuel or registration taxes. This spending is in effect a huge subsidy to the trucking industry. Truckers get to drive on nice smooth roads that in most cases are wide enough so that they can maintain decent speeds down the road. If you don't think this is a subsidy you should visit the third world and see what truckers there contend with. The rough roads beat the crap out of their trucks causing maintenance expense and they seldom allow speeds over about 40 mph. Ask you Dad how much money he would make if he spent all his time driving at 20 - 40 mph.
Truckers are undertaxed and are being subsidized by other taxpayers with nice smooth modern highways.
The taxes are more or less the same for all truckers so there is a level playing field. If some of the taxes were eliminated, the truckers most deperate for loads would just drop their rates to reflect the new lower cost structure and everybody else would have to lower their rates to match. Everybody would still be making the same profits. Instead of making $210 gross, your Dad would only be making maybe $150 gross because he would be forced to lower his rates by competition. Without the fuel taxes, his fuel costs would be lower so he would net about the same amount at the bottom line. Eventually he would find himself driving on third world highways as our road system fell into disrepair due to lack of revenues.
Ok, of the 150k he pays for gas, roughly half of it is taxes. So at 75K, per trucker, just in Jacksonville, FL Triple Crown drivers, they make a huge piece of money. The estimated amount is 40*75 (assuming the average mileage that my dad is making, estimate could be high or low). That comes to 3 MILLION dollars, for just one company worth of owner operators. That does not include the money they make off of company drivers, who are living large compared to the driver who contracts his own truck for the job. Simply because of the fact that the company pays for most company drivers, truck and all, they don't make as much gross, but they make more net earnings than the person who spends the college education worth of truck (trucks average around 100-150K), and the 5000 dollars for a tag and other non-gas-related taxes.
Yeah, and politicians are honest, all of them. You have the money to buy a truck? Look at the prices. It takes the same money to get into trucking as it does for many standard colleges' bachelor's degree. Dealers only have a small number of used trucks, and none with financing available. One of my dad's coworkers is still paying the financing on his first truck, which is now ten years old. If it was an acceptable tax on truckers, I would still be in college, because my dad would likely have been able to help pay for it.
The government is making a killing.
Here are the figures on prices:
Asphalt:
$399168 for one mile on a 30 foot highway
Assuming 30 people at $10 an hour, over an 8 hour workday, assuming one day per mile: $2400
Current total for a mile: $401568
We will discount price of equipment, since it is used multiple times, and only needs to be purchased for the first project it works on. This makes its effect on the average price minuscule.
Price for fuel (assuming a 50 gallon tank for 5 machines): $577
so, the total price, on average, for the first mile to be laid is: $402145.5
so this means that my dad's employer's single city's worth of owner-operators is paying for 6 miles simply on taxes. that does not, remember, include the money made from taxes on gas from company drivers and other associated taxes.
You crunch the numbers on the total number of drivers in the US, because I will lay dollars to donuts that they pay for the majority of road resurfacing out of the taxes on diesel. These numbers are as result of research into the bureau of labor and the energy information administration.
Dealers only have a small number of used trucks, and none with financing available.
In a previous post you said truckers were being driven out of business by the taxes. If that is true there should be used trucks at the dealerships. Apparently there are not too many used trucks which makes me think that there are more people entering the trucking business than exiting it.
A truck costs about the same as a college education but there is a big difference. A truck is a tangible asset with residual value. A trucker can buy a truck for $150,000, drive it for a few years and then sell it used and get a big chunk of his investment back. Try selling a used college education. Used textbooks get bought back at about 10 cents on the dollar.
Your cost estimates for road resurfacing are not even in the ball park.
Here are some real 2006 numbers for a county in Florida:
Roadway Cost Per Centerline Mile
Note that milling and resurfacing a 4 lane roadway is about $2.7 million per mile or about 5 times your estimate. Your assumption about equipment is badly flawed. That is like saying that your Dad should not charge for the cost of operating his truck because it gets used to carry more than one load. Heavy equipment on a highway job gets billed at a minimum of $40 per hour and the skilled people operating that equipment get paid well over $20 per hour. More specialized and bigger equipment gets billed at much higher rates. Just the cost of mobilization (paying truckdrivers like your Dad) is huge on most highway jobs. It averages about 6% of a typical job.