New tax would send airplane prices further skyward
Reprinted from The Orange County Register
Planning to fly cross-country? You soon might be paying considerably more for your ticket as part of a proposal in the new federal budget President Obama is putting before Congress.
“The Obama administration has proposed raising the taxes on air travel by about $14 per flight,” reported the Los Angeles Times.
“Higher taxes are needed to help reduce the deficit, pay for improvements at the nation’s airports and add thousands of new immigration and customs officers to reduce wait times to process foreign visitors, the administration says.”
The big problem with the administration’s proposed tax is that the various purposes for which it would be used need to be split apart and checked individually, Bob Poole told us; he’s a transportation policy analyst at the Reason Foundation, a libertarian think tank.
“I don’t think that’s an appropriate new tax,” he said. “First, the deficit reduction is truly a tax, as opposed to a user fee” that would fund a specific service.
Indeed, we believe that the best way to reduce the federal deficit, now pegged at “only” $642 billion for fiscal year 2013, is to cut government waste. The taxpayers who support the whole federal edifice should not be punished more.
As to airport improvements, Poole said that many airports have what’s called a Passenger Facility Charge already added to each ticket. According to a local airport’s website, “The PFC, created by Congress in 1990, is intended to assist airports in funding major infrastructure development. The fee generates $4.50 per enplaned passenger for a defined collection period.”
Other sources also pay for airport improvements: Federal Aviation Administration grants, General Airport Revenue Bonds and state funds for seismic retrofitting and improvements in the “hydrant fueling system.”
As to customs and immigration delays, “that seems to be a problem in a lot of places,” Poole said. “People visiting the country face terrible wait times. If it’s too long, tourists might not come into the country in the future. If there’s a need for a higher fee for this, which I think there is, then that’s appropriate.”
We agree that an increase in the customs and immigration fee might be appropriate. But we would want to make sure the money didn’t actually go to such things as higher pensions for airport workers.
Another good idea is to privatize American airports. Giant Heathrow Airport in the United Kingdom was privatized in 1987. Poole said that Chicago Midway International Airport is in the process of being privatized. However, he added that, even though privatization can reduce some passenger costs, the sort of taxes and fees the Obama administration is talking about still would apply.
We urge representatives in Congress to reject any overall airline ticket fee or tax increases for deficit reduction or airport improvement, while also scrutinizing any proposal to increase customs and immigration fees before approval.