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The Modern Postal Service: Agency or Business?

Until adoption of the Postal Reorganization Act of 1970, the U.S. Postal Service functioned as a regular, tax-supported, agency of the federal government. According to the laws under which it now operates, the U.S. Postal Service is a semi-independent federal agency, mandated to be revenue-neutral. That is, it is supposed to break even, not make a profit. In 1982, U.S. postage stamps became "postal products," rather than a form of taxation. Since then, The bulk of the cost of operating the postal system has been paid for by customers through the sale of "postal products" and services rather than taxes. Each class of mail is also expected to cover its share of the costs, a requirement that causes the percentage rate adjustments to vary in different classes of mail, according the costs associated with the processing and delivery characteristics of each class. According to the costs of operations, U.S. Postal Service rates are set by the Postal Rate Commission according to the recommendations of the Postal Board of Governors. [See: Postal Service Says It Needs Even More]

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