Archive for January 6th, 2009

It was only a matter of time: Raising taxes because people are driving too little …

January 6, 2009

Excerpted from AP, “Motorists’ habits spur call for tax increases”,  January 2, 2009

Motorists are driving less and buying less gasoline, which means fuel taxes aren’t raising enough money to keep pace with the cost of road, bridge and transit programs.

The dilemma for Congress is that highway and transit programs are dependent for revenue on fuel taxes that are not sustainable. Many Americans are driving less and switching to more fuel-efficient cars and trucks, and a shift to new fuels and technologies like plug-in hybrid electric cars will further erode gasoline sales.

A federal commission created by Congress to find a way to make up the growing revenue shortfall in the program that funds highway repairs and construction is talking about increasing federal gas and diesel taxes.

To close the gap of over $100 billion per year, the commission recommends a roughly 50 percent increase in gasoline and diesel fuel taxes (currently 18.4 cents per gallon and 24.4 cents per gallon, respectively) is being urged by the commission until the government devises another way for motorists to pay for using public roads.

The commission will urge Congress to raise the gas tax by 10 cents a gallon (from 18.4 cents to 28.4 cents) and the diesel tax by about 12 cents to 15 cents a gallon (from 24.4 cents  to 39.4 cents). 

The commission will also recommend that states raise their fuel taxes and make greater use of toll roads and fees for rush-hour driving.

The commission also recommends moving to a new system that taxes motorists according to how much they use roads. While details have not been worked out, such a system would mean equipping every car and truck with a device that uses global positioning satellites and transponders to record how many miles the vehicle has been driven, and perhaps the type of roads and time of day.

[Ken’s Note: Are these the same folks who thought the Patriot Act infringed on privacy ?]

Projected shortfalls in revenue led the National Surface Transportation Policy and Revenue Study Commission, in a report issued in January 2008, to call for an increase of as much as 40 cents a gallon in the gas tax, phased in over five years.

Full article:
http://biz.yahoo.com/ap/090102/gas_tax.html?printer=1

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The UAW … you gotta love these guys

January 6, 2009

Excerpted from IBD, “The UAW’s Money-Squandering Corruptocracy”, Malkin, December 31, 2008

While carmakers soak up $17 billion in taxpayer bailout funds and demand more for their ailing industry, United Auto Workers bosses have wasted tens of millions of their workers’ dues on gold-plated resorts and rotten investments.  While membership in the union has plummeted, the UAW retains assets worth $1.2 billion.

The UAW owns and operates Black Lake Golf Course — a “championship caliber” course opened in 2000 that’s part of a larger “family education center” and retreat nestled in 1,000 acres of property in Onaway, Mich. The resort includes “a beautiful gym with two full-sized basketball courts, an Olympic-size indoor pool, exercise and weight room, table-tennis and pool tables, a sauna, beaches, walking and bike trails, softball and soccer fields and a boat launch ramp.” The Detroit Free Press reported earlier this year that the golf course (valued at $6 million) and education center (valued at $27 million) have together lost $23 million over the past five years. 

The UAW  bid $9.75 million to purchase the gated La Mancha Resort Village in Palm Springs. The 100-room walled resort with spas, poolside massages and a “croquet lawn lit for night use” was on the verge of bankruptcy with $5.2 million in debt. Fortunately (for members), that deal didn’t go through.

The union poured $14.7 million into Pro Air, a start-up airline that, well, didn’t get off the ground. Plagued by safety problems, the feds shuttered the company less than a year later.

In 1996, union heavies invested $5 million in United Broadcasting Network, a liberal radio network precursor to Air America.  They shelled out for a $2 million, state-of-the-art studio in Detroit and incurred years of losses of a reported $75,000 a month before closing the network down in 2003.

And while the UAW and carmakers cry poor, they’ve operated massive joint funds for years that have paid for lavish items such as multi-million-dollar NASCAR racer sponsorships and Las Vegas junkets. 

At least the groveling Big Three CEOs gave up their corporate jets. Where’s the public flogging for the greed-infested UAW fat cats reaching into our pockets to keep them afloat?

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Full article:
http://www.ibdeditorials.com/IBDArticles.aspx?id=284004627416260

UAW’s annual report:
http://www.unionreports.gov 

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GM: 3 brands have targets on their backs …

January 6, 2009

Excerpted from BusinessWeek;, “Brand New Day”, November 28, 2008
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General Motors is looking at killing off three brands—Pontiac, Saab and Hummer.

Everyone knows that GM is over-branded. The problem has long been that the company does not want to have to pay dealers to fold the brands it does not need as it did with Oldsmobile in 2001. State franchise laws prevent a car company from simply ending a brand. Closing down Oldsmobile cost the company around $2 billion.

Saab is not thought to have any hot buyers. According to past conversations with GM execs, Saab Cars has never turned an annual profit for GM. It has, at times, made money in Europe. But those gains have always been off-set by losses in the U.S.

Saab is one of two Swedish car companies with limited interest from both consumers and investors. Ford, too, tried to sell Volvo earlier this year, and found no takers willing to pay Ford’s asking price.

Both Saab and Volvo are premium brands that have long had followings of people who place safety above all other vehicle characteristics. Saab has also attracted some performance-oriented buyers as the company has long offered turbo chargers in some of its models.

[Note: As previously posted, green buyers typically sort performance and safety down the list of buying criteria]

Volvo is on track to sell about 82,000 vehicles this year. Sales through October were down 28%. Saab is on track to sell about 20,000 vehicles this year. Sales were down 32% through October.

Edit by DAF

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Full article:
http://www.businessweek.com/the_thread/brandnewday/

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