• Federal ticket taxes of the past...?

  • Tell us where you were and what you saw!
Tell us where you were and what you saw!

Moderator: David Benton

  by Irish Chieftain
Upon reviewing an old Jersey Central main line commuter timetable from 1961, I noted that at the bottom of the fare list was a note that read:
* Federal tax of 10% not included. Consult Ticket Agents for corresponding fares from intermediate stations.
Now, my information is incomplete as to where this revenue went after it was collected—and I am assuming that this tax was of course collected from other railroad passenger operations. Is this tax levied today? and of so or if not, would it make sense to levy a 10% surcharge on all passenger operations and dedicate it to them, including Amtrak of course who needs a dedicated revenue stream most direly, or would that be outside the realm of "charging what the market will bear"?

  by RMadisonWI
I think that was the tax meant to discourage unnecessary travel during World War II. In typical government fashion, it was left on the books, with money going to the general fund, until sometime in the 1960s.

As for whether it would work today, if Amtrak is the only intercity operator, and all the funds went back to Amtrak, what would be the point of a tax?
  by Noel Weaver
This tax on tickets was done away with, maybe in the 1960's sometime.
This tax did not apply on commuter tickets or some multi-ride tickets.
Noel Weaver

  by FatNoah
As for whether it would work today, if Amtrak is the only intercity operator, and all the funds went back to Amtrak, what would be the point of a tax?
I'm certain it would work. It would allow Amtrak to advertise fares at one price but actually gain more revenue from the tickets. Remember, it's the advertising that get's people in the door. When buying something, people like price tags and don't consider ancillary costs. When was the last time you didn't buy something because of the sales tax? I'm sure it happens, but it's probably the exception rather than the rule.

Think of the budget airlines. The $99 one-way to Florida fares get people on the phone/internet to buy tickets. How many people get that far then decide to cancel because of fuel surcharges, security fees, departure taxes, airport taxis or parking, etc.

  by TomNelligan
As an aside, when that Federal ticket tax was repealed in the mid-1960s, most railroads took it as an opportunity to simultaneously raise their fares by an equivalent 10%, so passengers never got a break.

  by timz
I'm guessing the tax started circa 1942. It was 15% until-- mid-1950s?. At one point it applied on one-way tickets costing more than 36? cents, and on round-trips where the one-way fare was more than 36 cents. But, like he said, not on weekly/monthly commute tickets.


  by Noel Weaver
Absolutely, Tom. The reason for the government allowing the railroads to
keep the amount that was repealed from the tax was to help in an indirect
way to keep some of the trains running.
The Lehigh Valley and the Maine Central among others had already exited
the passenger business completely and other railroads had slashed service to the bone in many cases.
During this time, most of the fares were regulated.
Noel Weaver

  by Gilbert B Norman
As I recall, the date for total repeal of the Transportation Tax was 1962; at tat time, the rate was 10%, however, as noted by Mr. Timz, that rate had been reduced from the initial rate of 15% when the tax was imposed during WWII.

As Mr. Nelligan noted, the Northeast railroads promptly raised fares by a like amount when the Tax was repealed, however, the Western roads did NOT, save SP for local travel.

Also, back East, during the 60's B&O was a bit more 'propassenger" than were ts neighbors with Red and Grey cars. I THINK, the B&O also passed on the compensating fare increase.

Oh well, time to dig out some TRAINS and research (Kalmbach, you could make a mint with an all time subscription keyword search service; guarantee you, I'd sign up and pay up in a heartbeat).
Last edited by Gilbert B Norman on Sat Oct 09, 2004 10:00 am, edited 1 time in total.

  by AmtrakFan
I think that would be a good idea for Amtrak then set up a fund to give them $$$$$ to do things like Capital Improvements Etc. Also I always wondered about Taxiation in the old days now I know.