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Politics : Politics of Energy -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (22734)	8/17/2010 2:41:32 PM
From: TimF	1 Recommendation Read Replies (1) \| Respond to of 86356

Do you propose that that profitable use of the streets not be taxed? Its not a tax. Its a price at auction, with the price being fairly high because of artificial scarcity. In terms of government revenue its minimal since the medallions don't have to be re-bought every year, they are sold once. The government only gets more money when it sells new ones (which I think it should do more of, if its going to keep the medallion system, other cities have taxis without such an imposed limit on the overall number of taxis and they do just fine). New entrants in to the market don't have to pay the government (although they might if they buy a newly auctioned medallion), they pay money to current owners of medallions who are willing to sell theirs. There are other taxes that cover costs. I don't know the details about Chicago business and transportation taxes, but generally businesses more than pay for the costs they cause the city government to incur. And even in the unlikely event that the taxes on the taxis are "too low", that's a tax issue, not an issue of limiting medallions. More taxi drivers would result in more tax income. You want to ride in any uninspected cab? Cars generally have to be inspected anyway. Also inspection requirements are an entirely different issue than limiting the overall number of taxis. There are cities that inspect their taxis without having a medallion system, without limiting the total number of taxis allowed. Drop the limitation and you still would have business licenses and taxes, inspection, tests for drivers etc. Those are all separate rules and separate issues. The reason for the limit is almost entirely to pad the medallion owner's pockets. If you scrap the system they lose a lot of value. Chicago is only modestly bad. I think Philly is worse, and New York Medallions go for multiples of what the Chicago ones sell for. I can't see how anyone could really make a go of it in New York if they had to pay full price for a new medallion. Add the financing costs of the medallion (and even if you have the over a half million dollars burning a hole in your pocket and have no debt, you have to consider the opportunity cost, you could earn interest, or make some other investment) added to the direct cost of running a cab, and the taxes and government charges, it wouldn't seem that you could get enough revenue to cover all the costs, and still pay a driver. Of course you could drive yourself but you have to get an income to live off of and how many people with over a half million in cash want to be cab drivers? It seems to me that for New York its not just mostly about limiting competition but entirely about limiting competition, but someone must have paid those prices. I guess the one point is the fact that the medallion lasts forever. If the laws don't change, and if demand for taxi's remains there is no depreciation of the asset. Of course if the limit was lifted the medallion would be much less valuable, and the owners of them would be pissed. That's why they make such a strong special interest behind the idea of keeping taxi service limited.