Questions & Answers

Who can receive the tax credit?
Any person (railroad, rail customer, trucking company investing in intermodal, port investing in connecting infrastructure, etc.) making expenditures for eligible property would qualify for the tax credit and expensing treatment.

Isn't this just a government give-away to big corporations?
No.  The credit creates an incentive for many types of companies to make investments that expand rail capcity, produce public benefits not directly funded by the marketplace, and create a stronger basis for economic growth.

Further, our country is facing a freight mobility crisis.  With freight shipments expected to increase dramatically due to an expanding economy, booming international trade, more just-in-time deliever, and other factors, we must do something to avoid transportation gridlock.  Certainly, highway construction is part of the answer.  However, many studies have shown that public investment in rail infrastructure is not only an efficient use of taxpayer dollars but would also result in benefits to the public, including reduced highway congestion, improved air quality, less fuel consumption, and safer highways.

Aren't railroads earning record profits?  Why can't they invest themselves?
Historically, the term "railroad profits" was almost an oxymoron.  Over the last couple years, railroads (like most other freight tranpsortation providers) have seen an increase in profits, but rail industry earnings are still substandard compared to other industries.  More importantly, even today's "record" rail profits are insufficient to fund optimal investment levels.

Railroads will continue to spend heavily to improve and maintain their systems, but funding constraints will prevent them from meeting future rail infrastructure investment needs entirely on their own.  As AASHTO notes, "The rail industry is stable, productive, and competitive, with enough business and profit to operate but not to replenish its infrastructure quickly or grow rapidly."  AASHTO goes on to say that accommodating increased freight volumes in a way that generates public benefits "will require a new partnership among the railroads, the states, and the federal government."

What about passenger rail?
This tax credit is for investments in freight rail infrastructure.  However, in many parts of the country, passenger rail runs (or hopes to run) on freight rail infrastructure.  To the extent that freigth rail capacity is enhanced, freight railroads may be better able to negotiate agreements for passenger rail to share the track.

Why aren't my legislators on the list of cosponsors?
Good question.  Let them know how important this legislation is by e-mailing them through our  Go21 Action Center.  Also, consider sending a letter to the editor of your local paper.

Have other questions? E-mail your question to us by clicking here.

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