Hiding Tax Increases: USPS Taps Mailers’ Budgets, Again

When the cost of oil and gas plummets, that’s when states—looking for revenue—make a move to raise taxes on gasoline, in hope voters will hardly notice. Of course, when the price of gasoline inevitably increases months or years later, that tax on gasoline becomes painfully obvious and more pronounced: Small cars get driven, while the big guzzlers stay in the garage or showroom. Conservation rules the day.

When the cost of oil and gas plummets, that’s when states—looking for revenue—make a move to raise taxes on gasoline, in hope voters will hardly notice. Of course, when the price of gasoline inevitably increases months or years later, that tax on gasoline becomes painfully obvious and more pronounced: Small cars get driven, while the big guzzlers stay in the garage or showroom. Conservation rules the day.

Like a tax-hungry legislature, the United States Postal Service is looking to raise postage again—a surprise rate hike request, given the exigency first taken from mailers’ pockets last year that is still in effect today. The U.S. economy may be back—but marketers aren’t stupid on postage, they well know the pain. Nothing takes business elsewhere and more rapidly than unplanned, surprise cost increases.

My mindset on the entire exigency has always been suspicious. Purportedly to recover lost funds from the impact of the Great Recession (2008-09), the USPS exigent increase, on top of the inflation-indexed release of 2014, has represented a collective 6 percent tax of a different kind. What business gets to pass along its Recession “losses” to its customers? Direct mailers, unlike drivers at the pump, have very much noticed.

Perhaps the economy is doing well—heck, even direct mail volume is holding up. However, better economic times—which can cover some fiscal sins—can’t hide what needs real fixing inside the Postal Service. We all know that USPS deficits and defaults, which postal management appeared to try hard to avoid, with cost-cutting, network rationalization and other initiatives, are really attributable to Congressional mandates, and not the Recession or digital migration.

Well the U.S. economy is moving in the right direction, and has been for six years, and may grow another 3 percent or more this year (2014 fourth quarter aside). Business outlooks are generally good, and Apple among others just set a quarterly earnings record in profit. Jobs have come back, though the labor participation rate lags, and pay packets have barely budged. The stock market, volatile yes, is booming again. Few may feel very secure, but the underlying data shows the recession of 2008-2009 is far behind us.

Even the USPS knows that the U.S. economy is growing. Direct mail volume held its own in 2014—the digital death knell has been greatly exaggerated. Perhaps cooking up the exigency, and another, surprise inflation-indexed increase this year, is the Postal Service’s way of taking another revenue injection when the going is good. Certainly that’s more reliable income than waiting for Congress to act on what is most meaningful: backing off ridiculously punitive, pre-funding requirements for retiree health benefits, letting the USPS offer employees its own healthcare plans, and halting silly moratoriums on USPS infrastructure needing to resize to fit the times.

I always thought Congress, with the USPS in fiscal crisis and default, and a difficult severe recession, would have prompted members to act. The White House, too. Nothing in the way of new reforms ever emerged. Maybe Congress, too, is waiting for “good times” again to stage its next postal act. Let’s hope this next one doesn’t cost mailers even more. The present situation is unsavory enough.