Bush’s tax hike
The Bush administration’s plan to hike an air-travel tax by 120 percent has the tourism industry concerned.
The tax under Bush’s plan would rise from $2.50 to $5.50 per leg of a trip, up to a maximum of $16 per trip. The maximum previously was $10.
The Air Transport Association says that last year $1.6 billion in security taxes, plus another $315 million in other federal air-travel taxes, was collected.
“We really have two choices,” White House budget official Joshua Bolten said in a published news article. “We can ask those who are flying to bear those costs, or we can ask everybody, including those who are not flying, to bear those costs.”
But an executive for one of Nevada’s most popular carriers, Southwest Airlines, says that kind of targeting of airline customers is exactly what’s wrong with the tax.
Southwest’s Tom Chapman says, “September 11th was an attack on the United States, not an attack on the airlines. It makes no more sense to charge airline customers a fee to pay for homeland security than it does to bill the residents of New York and Washington for the cost of jet fighters on guard against further attacks.”
At one time, the airlines would have had the assistance of travel agents and their lobbyists in fighting the tax hike, but since the airlines cut off commissions to the agents, their interests no longer overlap.
Sparks travel agent Julie Harris says the added fee is not likely to affect agents, except in a general downward financial pressure on air travel.
“I hate to see more and more taxes just keep piling on there,” she says. “I was just selling some international tickets, and the taxes were up in the $200 range.”
A Las Vegas publication, In Business, says, “For the two commercial passenger carriers that account for more than 60 percent of the flights at McCarran International Airport, the tax burden is proportionately greater because many of the charges added by the government are flat fees and not a percentage of the ticket price.”
The Las Vegas Review-Journal has editorialized against the tax hike, arguing that it will put people out of work.
“While taxes are clearly not the industry’s only problem, they sure don’t help. Airlines will be unable to raise ticket prices to cover the increase and could instead be forced to cut more services and jobs, industry leaders warn. … And a Nevada delegation that understands the importance of all those planes circling to land at McCarran Field should say so, loud and clear.”
The newspaper said that while the money is being used for “homeland security” purposes, the security budget has become pork laden.