About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

219 IRET Congressional Advisory 1 (2007)

handle is hein.taxfoundation/iretcgadv0216 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. February 15, 2007 Advisory No. 219 DOES THE GROWING NUMBER OF HOMES AND BUSINESSES HELP OR HURT THE POSTAL SERVICE? Executive Summary Most private-sector businesses would be delighted to be able to count on a steady, moderate increase in customers year after year. The U.S. Postal Service, in contrast, complains that its rising customer base is a crushing financial burden. Can the Postal Service's attitude - so different from that found in the private sector - be right? The number of mailing addresses increases about 1.3% - 1.4% annually, with most of that due to the nation's growing population and the rest attributable to other factors such as higher incomes. Servicing the continuing influx of new home and business customers does have costs. The Postal Service must process more mail and deliver it to more addresses. On the positive side, the added homes and businesses raise mail volume, and that boosts the government enterprise's revenues. A realistic financial assessment of mailing address growth requires considering both the cost and revenue sides, and portraying them accurately. The Postal Service, however, exaggerates the costs while glossing over the revenues. Rick Merritt, who was Executive Director of Postal Watch, often pointed out that new delivery points have relatively low costs, in part because of the Postal Service's moratorium on to-the-door deliveries for new residences, and generate healthy revenues. Economists at the Postal Rate Commission also concluded that the annual cost of adding delivery points is relatively small. The Postal Service is worried about slow growth in total mail volume and an actual decline in first- class mail volume. New delivery points help counter those trends. Volume and revenue growth would be much weaker if not for the rising number of homes and businesses. Not every letter sent to or from a new address represents a net addition to the mail stream, but many do. Because delivery-point growth is self-financing, it would not be an excuse for future postal rate increases to exceed the cap that is a key feature of recently enacted legislation. The Postal Service should not try to garner sympathy by erroneously depicting added customers as a burden. They are an asset. g~*I A S I 66, 8 Ae ~

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most