Another airline ticket tax increase is rapidly becoming a favorite call of many politicians.
Obsessed with figuring how to get as many quarters out of each hard-earned dollar you earned, airline passengers are in a strike-position to possibly get hit next (again).
Annual Infrastructure Week
The 7th annual Infrastructure Week just wrapped up. With a hashtag of #BuildForTomorrow, the thought behind the idea is that the infrastructure choices we make today will shape America’s Future.
The U.S. Government is looking for ways to fund the upgrade of the dilapidated condition of our infrastructure. Roads, dams, bridges, and other structures in the U.S.A. are simply crumbling, or falling apart!
An airline passenger ticket tax increase was looming on the horizon.
How a decision on the infrastructure proposal may affect you, the airline passenger
Suggestions were made to raising the Passenger Facility Charge for airlines, as a means to help fund the infrastructure projects.
Your airline has been slapping this charge onto your ticket price for a long time already. The money you paid went to paying for airport upgrades.
However, the current surplus in this government fund set aside for airports stands at $7 billion!
Sharon Pinkerton, Airlines for America
Sharon Pinkerton is the Senior Vice President for legislative policy at Airlines for America. She commented that keeping ticket prices stable is better than raising them. Keeping ticket prices stable is the key to financial health at major airports, according to Ms. Pinkerton.
Pete Sepp, National Taxpayers Union
Pete Sepp, the president of the National Taxpayers Union stated that Congress should look for alternative ways to fund the repair of roads and bridges. Diverting airline taxes for other uses is not the answer.
He goes on to say that “The total government burden on an airline ticket is now exceeding an average of 20 percent. That’s a higher tax rate than most middle-class travelers will pay on their 1040 tax return.”
So, what are the airline passenger ticket taxes we currently pay?
Let’s first look at how the basis for a ticket price is mandated.
DOT (Department of Transportation) Rules stipulation
Pricing on all travel that involves airfare must be displayed as the total cost for the purchase. Travel that includes airfare is specified as travel that includes flights and vacations inclusive of air and cruises.
Topping the price for that would be government taxes and mandatory fees.
Current government taxes you pay with your airline ticket purchase
The exact government taxes and fees depends on your itinerary.
1. Domestic or International Departure and Arrival Charges
These government imposed taxes and fees can easily slap on up to an extra $200 on your ticket.
2. Passenger Facility Charges (PFC’s)
These charges average $4-$5, up to $18 per ticket.
3. Federal Excise Tax
Your airfare is charged the Federal Excise Tax at 7.5%.
4. September 11 Security Fee
A fee of $5.60 is added for each one-way ticket segment. An additional $5.60 fee can be added if your itinerary involves a layover of more than 4 hours on a domestic flight or 12 hours on an international flight.
The latter policy also applies to flights between the U.S. mainland to/from Hawaii and Alaska.
5. Segment Fee
For every take off and landing you are being charged a flight segment fee of up to $4.
But wait, there is more…
Here we just covered the current taxes that Uncle Sam wants for your privilege to operate in and out of his airports and fly inside his airspace.
Recall the DOT stipulation we just discussed above? Well, it only specifies to let you know what the total charges are at the time you buy your ticket.
But, did you read the airline’s “fine line” when you purchased your airline ticket?
Your airline’s fare rules may state that you’ll have to pay additional airline-specific fees too.
Have you heard of baggage allowance fees, “convenience” fees, overhead luggage fees, seat reservation fees, and fees to be allowed to use the lavatory (just kidding on that one), and so on?
The truth is, you are being taxed and “fee’d” to oblivion every time you fly!
Back to the Infrastructure airline tax increase…
Regardless, the next time you fly don’t put all the blame on your airline for the high fares. The airlines are already paying their shares of sky-high taxes to the Government for their own privilege to operate a business, serving you.
What will you do if the ticket fare increase of the infrastructure ticket tax initiative becomes reality?
Like every other time, our taxes go up and we accept the new reality. But, perhaps it’s time to blame the politicians?
How about the government balancing and prioritizing the books with the money they already have available for once?