The railroads and their freight customers go to battle

The basic problem of shippers and their railroads is service and rates. About 125 years ago shippers were complaining that railraods were setting rates to high so we tried to fix this by establishing the Interstate Commerce Comission. The ICC established fair rates for shippers that were compensatory to the railroads, or at least that was what it was supposed to do.

The ICC failed.

The ICC almost totally stifled productivity improvments. Railroads which tried to impliment better service and lower rates were told they could not do so. The ICC procedures and rules caused some traffic to shift to truck and away from rail. We are still bearing the crowded highway costs of that legacy. When the ICC was finally abolished, average rail rates declined and service generally improved.

We should pay attention to how much our past experiments with economic regulation of airlines and railroads has cost us. My calculations indicate the ICC cost the American public about $250 billion in higher rates and lower productivity because of the rules and regulations the ICC set up and enforced. A good example of this can be seen in the vestigial element of airline pricing called "Y class" fares. Ask any airline agent (if you can talk to a live person) what a Y class fares would be in comparison to what you are asked to pay. You will often find that Southwest or Airtran or Jet Blue are charging even lower rates than that. Those differences between the regulated fare (now known as the Y class fare) and the market fare show the economic costs of regulations. The same type of difference can be found in rail rates.

Railroads do not need any different treatment or different tax than any other business. We as a public should not give them a preferred treatment. And we should certainly not try to regulate their economics.

Justin
You mention "four big railroads", and I know that you know there are hundreds of smaller ones. But in fact there are six big railroads in the United States:
Burlington Northern Santa Fe
Union Pacific
CSX
Norfolk Southern
Canadian National
Canadian Pacific
The last two are transcontinental and have extensive trackage in the United States. Canadian National is the only railroad in the United States that directly serves Atlantic, Pacific and Gulf coast cities.