The Harbor Maintenance Tax is paid by shippers that use U.S. ports. It’s used for a federal fund that pays for the dredging of channels. The trouble is that it’s not applied to containers that land at ports in Canada and Mexico and then are transported, usually by rail, to the United States. Puget Sound ports argue that this is a loophole that encourages shippers to divert cargo to those foreign ports.
The fund doesn’t work to Seattle and Tacoma’s advantage as deep-water ports because it’s focused on dredging other harbors, even those that see little container traffic. According to one report, one-fifth of all expenditures go to Louisiana alone. That same report, from the Congressional Research Service, said Seattle and Tacoma get about a penny for every dollar that shippers pay in tax. Nor has Congress been strategic or aggressive on using the fund. It might help fund port, highway or rail infrastructure, but it doesn’t. America lacks the infrastructure spending or focus that benefits many competing world ports.
The state’s congressional delegation has complained and the Federal Maritime Commission has launched an investigation. So far, nothing has changed. Southern lawmakers will be eager to tap the fund to expand their shallow ports once the wider Panama Canal opens.
This is a thorny international trade issue, too. Canada and Mexico bridle at accusations that they are operating at an unfair advantage. Yet the reality is that they don’t collect the American tax and are improving their harbors through their own government revenue streams. According to the Journal of Commerce, Canada argues it is simply shorter transit times that account for shippers choosing Canadian ports.
And Don’t Miss: Austerity can’t be just for regular people || Matt Taibbi/Rolling Stone
Today’s Econ Haiku:
Way past time to go
Print drachmas and devalue
Berlin, drachma this!