Posted by
Old Marine on Wednesday, September 08, 2010 7:57:36 PM
Let’ take a look back into ancient history, way back to February, 2009. Remember back during the run up to the passage of The Recovery Act, the Stimulus which was really the Porkulus Bill? The American public was told that this money was needed to “stimulate” the economy. We were told that the money would be used for “shovel ready” projects. Remember, we were told that included in this boondoggle was $105.3 billion for Infrastructure Investment and out of this, $48.1 billion (45.68%) was to be directed towards Transportation.
To begin, let’s review how the funds for transportation were supposed to be used. Part of the Porkulus money was to be used for highway and bridge construction projects ($27.5 billion). Then there was $8 billion to be used for intercity passenger rail projects and rail congestion grants (whatever rail congestion grants are), with priority for high-speed rail, which has been proven to be a money losing proposition except for certain areas like the east and left coast areas. As most people know, most public transportation systems are losing money and increasing their rates. However, this doesn’t deter the Regime’, it is part of the plan, but we still have to add $750 million for the maintenance of existing public transportation systems and of course grow a government agency larger and to pay off the Democratic controlled cities in the form of $6.9 billion for new equipment for public transportation projects (Federal Transit Administration). Of course we have to add addition money for the cities to construct bike and walking trails, so let’s just use part of the $1.5 billion that was set aside as national surface transportation discretionary grants. Then there is $1.3 billion for Amtrak, which is like dumping more money into a black hole and then we have to add $750 million for the construction of new public rail transportation systems and other fixed guideway systems. Of course, since the regime’ has dumped money into various ground transportation, we now have to dump money into aviation in the form $1.1 billion in grants for airport improvements and $200 million for FAA upgrades to air traffic control centers and towers, facilities, and equipment. Finally, the regime deemed it necessary to allot $100 million in grants for improvements to domestic shipyards.[1] Are we still building ships in the U.S?
Everyone has heard of the waste and fraud that has been exposed in the various projects, $300,700 for one, twenty nine passenger bus in Frankfort, KY [2]. This was paid for by Porkulus money. We all have heard about the cost of the signs that informs everyone that their taxes are paying for the construction. In fact, some projects here in KY were delayed until the signs were put in place. Now, the regime wants more money for roads and infrastructure projects.
On Labor Day, while on yet another campaign push, Obama was speaking before a crowd of union employees and he proposed another $50 billion “investment” in long – term infrastructure projects. He claims that these projects will stimulate the economy, create more union jobs and attempt to refill the “exhausted” federal highway trust fund (HTF). [3] Doesn’t he remember the $48.1 billion that he has all ready spent for infrastructure projects? I guess so. In his speech, he offered a six year plan (as Charles Krauthammer said last evening, “even the Soviets had only five year plans”) to rebuild 150,000 miles of roads, lay 4,000 miles of railways and restore 150 miles of airport runways. Everyone should be asking, just where the money is going to come from, after all basically America is broke. Well, let’s look at the “exhausted” HTF. Does anyone wonder where the money comes from for this “Fund”?
Here is a breakdown:
Table 4.—User Fee Structure. [4]
Tax Type Tax
Rate Gasoline ..........................................18.4 cents per gallon
Diesel......................................................24.4 cents per gallon
Gasohol(10% ethanol)..............................13 cents per gallon (Other rates apply to gasohol containing less than10
percent ethanol or blends made with methanol.)
Special Fuels: General rate....................... 18.4 cents per gallon
Liquefied petroleum gas........................... 13.6 cents per gallon
Liquefied natural gas............................... 11.9 cents per gallon
M85 (from natural gas)............................. .9.25 cents per gallon
Compressed natural gas........................... 48.54 cents per thousand cubic feet
Tires: 0-40 pounds..................................... No Tax
Over 40 pounds to 70 pounds..................... 15¢ per pound in excess of 40
Over 70 pounds to 90 pounds.................... $4.50 plus 30¢ per pound in excess of 70
Over 90 pounds........................................ $10.50 plus 50¢ per pound in excess of 90
Truck and Trailer Sales.............................. 12 percent of retailer's sales price for tractors and trucks over 33,000
pounds gross vehicle weight (GVW) and trailers over 26,000 pounds
GVW
Heavy Vehicle Use Annual tax: Trucks 55,000 pounds and over GVW, $100 plus $22 for each 1,000 pounds (or fraction thereof) in excess of 55,000 pounds (maximum tax of $550)
The HTF has an additional source of revenue. Since October 30, 1984, the proceeds from fines and penalties imposed for violation of motor carrier safety requirements are deposited in the Highway Account of the HTF.
Let’s look at how these taxes are collected. Most of the excise taxes credited to the HTF are not collected by the Federal government directly from the consumer. They are, instead, paid to the Internal Revenue Service by the producer or importer of the taxable product (except in the cases of the tax on trucks and trailers, which is paid by the retailer, and the heavy vehicle use tax, which is paid by the heavy vehicle owner). As a result, most of the Federal fuel taxes come from a handful of States, those where major oil companies are headquartered, and most tire taxes are paid from Ohio, the home of the U.S. tire industry. Of course, these taxes become part of the price of the product and are ultimately paid by the highway user.
User taxes are deposited in the General Fund of the Treasury ( This is where the Social Security Funds tended up in the 60's thanks to LBJ and we all know how that worked out ) and the amounts equivalent to these taxes are then transferred on paper to the HTF. Transfers are made at least monthly on the basis of estimates by the Secretary of the Treasury and later adjusted on the basis of actual tax receipts. Amounts in the HTF in excess of current expenditure requirements are invested in public debt securities. Until October 1, 1998, the securities were interest-bearing and interest from the securities was credited to the fund. Since that time, the HTF balance has been invested in non-interest-bearing securities. Since there is considerable interest in the amount of contributions to the HTF made by each State, estimates are made of the amount of taxes paid by the highway users of each State on the basis of data reported by State motor-fuel tax agencies. Highway users in some States pay more in user taxes than those States receive back in Federal-aid highway apportionments and allocations. In an effort to compensate for this, the TEA-21 included a provision, called the Minimum Guarantee, which distributes additional funds to the States.
The talking heads and others are talking about another Porkulus Bill. Anyone pretty well knows that this is going to be dead on arrival after all too many politicians will be worried about re-election. So is it beginning to dawn on the people, where this “extra” $50 billion will be coming from? Does anyone remember during the campaign when Obama said in reference to the then rising gas prices which was approaching $5.00 per gallon, that he would have preferred if the prices hadn’t risen so fast, but the high fuel prices didn’t really bother him.
Is it possible that Obama and the Congress Critters will attempt to either try to pass Crap and Tax, I mean Cap and Trade, during the lame duck session if the Progressives loose in November, with part of the argument being that they need to raise additional taxes on fuel, tires, trucks and trailers to “stimulate” the economy and improve our infrastructure. Will they just attempt to pass a bill to raise the taxes on fuel and other items associated with transportation as well as other user fees, during the lame duck session? IF this fails, look for a recommendation from the White House to raise fuel taxes when the new Congress is sworn in. The statement made by Obama, was just to “prime” the pump for another tax increase, after all we do need “another $50 billion “investment” in long – term infrastructure projects.”
Now, couple higher taxes on fuel, with the attempt to shut down the drilling in the Gulf or everywhere else in the U.S., and the Middle East in turmoil, after all if Israel strikes Iran, the oil supply will be curtailed or stopped all together. Does anyone believe that gas prices will not skyrocket? When the fuel and associated materials skyrocket, what do you think will happen to the price of food and other items? Can anyone name anything that isn’t shipped by truck or rail? Yes, rail uses fuel as well. How many people will be put out of work? How many people will just have to quit their jobs because they can’t afford to get to work because public transportation does not service their work area? How about emergency vehicles? In the end, this is exactly what the Socialists and Environmental wackos want; to bring America to its knees.
How is this Obama hopey-changey thing working on the “shovel ready” projects for American jobs.
[2] The State Journal, Frankfort, KY, December 6, 2009
Semper Fi,
The Terrific Trio
(JG,Top and Me)