[Congressional Record Volume 146, Number 79 (Wednesday, June 21, 2000)]
[Extensions of Remarks]
[Pages E1070-E1071]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                         RURAL LETTER CARRIERS

                                 ______
                                 

                         HON. E. CLAY SHAW, JR.

                               of florida

                    in the house of representatives

                        Wednesday, June 21, 2000

  Mr. SHAW. Mr. Speaker, the U.S. Postal Service links together cities 
and towns, large and small, across America through delivery of the 
mail. Since our nation's founding, mail delivery has been especially 
important to rural America, places that were at first a long walk away, 
then a long horse ride, and even for years a long automobile ride from 
the nearest downtown of a major city. The Internet today has helped 
reduce the distance between cities, and even countries, but mail 
delivery continues to be an important function for all Americans.
  Most Americans, probably, are unaware that for decades rural letter 
carriers have used their own transportation to deliver the mail. This 
includes rural letter carriers who today drive their own vehicles in 
good weather and bad, in all seasons, in locations that can range from 
a canyon bottom to mountain top, ocean view to bayou. Rural letter 
carriers drive over 3 million miles daily and serve 24 million American 
families on over 66,000 rural and suburban routes. The mission of rural 
letter carriers has changed little over the years, but the type of mail 
they deliver has changed substantially--increasing to over 200 billion 
pieces a year. And although everyone seems to be

[[Page E1071]]

communicating by email these days, the Postal Service is delivering 
more letters than at any time in our nation's history. During the next 
decade, however, we know that will change.
  Electronic communication is expected to accelerate even faster than 
it has in the last five years. Some of what Americans send by mail 
today will be sent online. According to the General Accounting Office 
[GAO], that will include many bills and payments. In its study, U.S. 
Postal Service: Challenges to Sustaining Performance Improvements 
Remain Formidable on the Brink of the 21st Century, dated October 21, 
1999, the GAO reports that the Postal Service's core business--letter 
mail--will decline substantially. As a result, the revenue the Postal 
Service collects from delivering First-Class letters also will decline.
  While the Internet will eventually reduce the amount of letter mail 
rural letter carriers deliver, the Internet will present some new 
opportunities for delivering parcels. Rural letter carriers have for 
decades delivered the packages we order from catalogs, and now they 
deliver dozens of parcels every week that were ordered online. For some 
rural and suburban Americans the Postal Service still remains the only 
delivery service of choice. Today, the Postal Service has about 33 
percent of the parcel business. However, if the Postal Service is as 
successful as it hopes in attracting more parcels, that could create a 
problem for rural carriers. Most items ordered by mail are shipped in 
boxes that, once filled with packing materials, can be bulky--so bulky, 
in fact, that many rural letter carriers already see the need for 
larger delivery vehicles.
  In exchange for using their own vehicles, rural letter carriers are 
reimbursed for their vehicle expense by the Postal Service through the 
Equipment Maintenance Allowance [EMA].
  Congress recognized this unique situation in tax legislation as far 
back as 1988. That year Congress intended to exempt EMA from taxation 
through a specific provision for rural letter carriers in the Technical 
and Miscellaneous Revenue Act of 1988 [TAMRA]. This provision allowed 
rural mail carriers to compute their vehicle expense deduction based on 
150 percent of the standard mileage rate for their business mileage 
use. Congress passed this law because using a personal vehicle to 
deliver the U.S. Mail is not typical vehicle use. Also, these vehicles 
have little resale value because of their high mileage and most are 
outfitted for right-handed driving.
  As an alternative, rural letter carrier taxpayers could elect to use 
the actual expense method (business portion of actual operation and 
maintenance of the vehicle, plus depreciation). If the EMA exceeded the 
actual vehicle expense deductions, the excess was subject to tax. If 
EMA fell short of the actual vehicle expenses, a deduction was allowed 
only to the extent that the sum of the shortfall and all other 
miscellaneous itemized deductions exceeded two percent of the 
taxpayer's adjusted gross income.
  The Taxpayers Relief Act [TRA] of 1997 further simplified the 
taxation of rural letter carriers. TRA provides that the EMA 
reimbursement is not reported as taxable income. That simplified taxes 
for approximately 120,000 taxpayers, but the provision eliminated the 
option of filing the actual expense method for employee business 
vehicle expenses. The lack of this option, combined with the effect the 
Internet will have on mail delivery, specifically on rural letter 
carriers and their vehicles, is a problem we must address.
  Expecting its carriers to deliver more packages because of the 
Internet, the Postal Service already is encouraging rural letter 
carriers to purchase larger right-hand drive vehicles, such as sports 
utility vehicles (SUV). Large SUVs can carry more parcels, but also are 
much more expensive to operate than traditional vehicles--especially 
with today's higher gasoline prices. So without the ability to use the 
actual expense method and depreciation, rural carriers must use their 
pay to cover vehicle expenses. Additionally, the Postal Service has 
placed 11,000 postal vehicles on rural routes, which means those 
carriers receive no EMA.
  All these changes combined have created a situation contrary to the 
historical congressional intent of using reimbursement to fund the 
government service of delivering mail, and also has created an 
inequitable tax situation for rural letter carriers. If actual business 
expenses exceed the EMA, a deduction for those expenses should be 
allowed. I believe we must correct this inequity, and so I am 
introducing a bill that would reinstate the deduction for a rural 
letter carrier to claim the actual cost of the business use of a 
vehicle in excess of the EMA reimbursement as a miscellaneous itemized 
deduction.
  In the next few years, more and more Americans will use the Internet 
to get their news and information, and perhaps one day to receive and 
pay their bills. But mail and parcel delivery by the United States 
Postal Service will remain a necessity for all Americans--especially 
those in rural and suburban parts of the nation. Therefore, I encourage 
my colleagues to support this bill and ensure fair taxation for rural 
letter carriers.

                          ____________________