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136 IRET Congressional Advisory 1 (2002)

handle is hein.taxfoundation/iretcgadv0133 and id is 1 raw text is: INSTITUTE FOR RESEARCH ON THE ECONOMICS OF TAXATION IRET is a non-profit 501 (c)(3) economic policy research and educational organization devoted to informing the public about policies that will promote growth and efficient operation of the market economy. September 30, 2002 Advisory No. 136 News of the Future, 20 years from now. Dateline: Washington, Sept. 30, 2022. POST OFFICE BUYS MALL OF AMERICA Postmaster General for Life John E. Potter announced today that the United States Postal Service, the nation's largest retail and shipping conglomerate, has bought the Mall of America in Bloomington, Minnesota, for $5 billion. We had a store and branch office on the second level, said General Potter, and we figured, hey, better to own than rent. We'll lease out the space we don't need to leverage the property. The current tenants want to stay, and we've had over 1,000 inquiries from area businesses for the four vacant stores on level three. The income will let us limit the next quarterly increase in first class postage. It'll go from $2.12 an ounce to $2.24, instead of $2.25. They made an offer we couldn't refuse, said Mall Board Chairman Donald Trump, Jr. No kidding, said Professor Sven Svensen of Minnesota University School of Business. The Mall was paying income and property taxes. The Postal Service is tax exempt and can borrow dirt cheap. It offered the Mall a price that equals all the future net rental income and half of the tax savings. No wonder they grabbed it. The Postal Service will still be able to undercut every other landlord in the state. To preserve their income, sales and property tax bases, Treasurers of the State of Minnesota and Hennepin County sought to block the takeover in state and federal courts. State Supreme Court Justice Vanessa Ventura ruled that she had no jurisdiction over the federally-owned USPS. Federal District Court Judge Benjamin P. Franklin ruled the takeover to be in accord with the Postal Service Transformation Act of 2003, stating succinctly: Yes, sir, that's my baby. (The Judge is the former one term Congressman who authored the 2003 Act, his first and only major piece of legislation.) The 2003 Act was based on suggested reforms contained in the 457 page United States Postal Service Transformation Plan submitted by Mr. Potter to Congress twenty years ago, on April 4, 2002. It recommended that the Postal Service move into new lines of products and services to leverage its assets and expand its way out of the red. It would operate as a Commercial Government Enterprise (CGE), retaining its tax exempt status and access to a federal line of credit. This suggestion was adopted in the Transformation Act. The Postal Service has expanded ever since. The 2003 Act sought to give the Postal Service a new source of profit to support its mandated task of delivering mail to everyone in the country at a low uniform postage rate without an explicit on-budget federal subsidy. In practice, the Postal Service's outlays for expansion and a puzzling series of cost

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