Thursday, June 25, 2009
Tuesday's post on Sarah Lawsky's observations on How Tax Law Caused the Washington Metro Train Wreck has attracted a lot of attention. Senate Finance Committee Ranking Member Charles Grassley today issued this press release:
Senator Chuck Grassley is urging House Majority Leader Steny Hoyer to include language in any proposal to give the Washington Metropolitan Area Transit Authority necessary additional funds for maintenance and upgrade of subway equipment to make sure the money would be used for safety improvements and not to pay off transit agencies’ obligations to corporations, including foreign corporations, who use the agreements as tax shelters.
Grassley also has written to the American Public Transportation Association to ask how many other public transit systems may be constrained from making equipment upgrades by tax-advantaged leases. ...
In 2006, the Washington Metropolitan Transit Authority rejected recommendations made by the National Transportation Safety Board to retire or do a heavy overhaul on the 1000 Series, Rohr railcars because “WMATA is constrained by tax advantage leases, which require that WMATA keep the 1000 Series cars in service at least until the end of 2014.”
Sarah has more:
- The Metro Crash and Tax: A WMATA Leaseback Agreement
- The Metro Crash and Tax: Known Unknowns
- The Metro Crash and Tax: Leaseback Infrequently Asked Questions
- Bloomberg: Metro to Use Funds for Upgrades, Not Bank Lease Deals
- Dow Jones: DC Metro Delayed Upgrades Due To Tax Shelter Deal
- New York Times: Crash Puts Focus on Aging Rail Fleets
- New York Times: A Tax Shelter and the D.C. Train Crash
- Wall Street Journal: Metro Crash Blamed on Tax-Shelter Deal
- WSJ Law Blog: Did Tax Law Cause the D.C. Train Wreck?
By now, just about everybody knows of the horrible and deadly crash of two subway trains in Washington, D.C., on what is known as the Metro system. Prof. Paul Caron, on his TaxProf Blog, noted that Sarah Lawsky, has written about The Washington Metro Crash and Tax, speculating that sale-leaseback arrangements may have locked the Washington Metropolitan Transit Authority “into using outdated and unsafe equipment and thus made this crash even more deadly than it might otherwise have been.”
I live in the Washington metro area. I travel on the transit system regularly; my family travels on the Metro. I work for Tax Analysts, which sponsors this site; we lost a family member in this accident.
Tax pinheads –- and you can call me one if you like –- like to sit around and talk about what is the stupidest tax law we have. Now maybe we should start talking about which one is the deadliest.
A tax system is supposed to collect revenue. That’s it. No social engineering or favoring one group over another. But if it starts to contribute to killing people, I think we can all agree that it is time to change our tax system.