Let’s say you go online and book an airplane ticket from your nearest airport to a city halfway across the country. The ticket price is $300. Not bad. That’s 50% less (using inflation adjusted dollars) than it was in the 1970s before airline deregulation. Even in the midst of increased fuel costs, labor costs, and the costs of the plane itself, the airlines have managed to keep plane travel relatively cheap.
How much of the cost of that $300 ticket do you think you are paying in taxes as a passenger? In 1972, the answer to that question was $22.00. The answer today is $60.00, and some politicians are trying to increase that large sum by about six dollars more. Those passenger taxes are sometimes called “hidden taxes” because you don’t realize they are there. They are included as part of the overall ticket price, and you assume that the ticket price represents costs or profits to the airline. Once again, it is really politicians taking advantage of low plane fares to sneak in taxes that most customers never see or discover. In 2009, passengers paid the federal government $18,000,000,000 in taxes on their plane fares, and that doesn’t include federal taxes paid by all the airlines for doing business and making profits.
Richard Anderson, the CEO of Delta Airlines, is especially frustrated because those “ticket taxes are not being channeled directly to air traffic control modernization.” In other words, some of the increase in ticket taxes is simply money going to Washington for politicians to divvy up in targeted subsidies to different voting groups.
What can we do about hidden taxes? One thing is to try to remove the veil of secrecy from them. The more we know about all the taxes we pay, the more likely we are at least to resist their being increased. We should ask businesses to list for us how much of, say, our tank of gas consists of revenue sent to Washington. Perhaps we could have two dials on the gas pumps–one telling us how much our total price is and the other telling us how much of that price we are sending to Washington. In a similar manner, we could ask that the amount of tax we pay for a carton of cigarettes or a fifth of gin be posted on the product. The withholding taxes on our incomes pose the same issue. If Americans discover how much they are paying in hidden taxes, they would be more likely to resist the lure of government subsidies from Washington–subsidies made possible by hidden taxes.
Can you think of even better ways of calling attention to the legal confiscation of our property by politicians in Washington?
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{ 1 comment… read it below or add one }
Every ticket has the standard 8% tax on it.
Every segment has a PFC or passenger facility charge that varies from
the airport you are lifting off from. All airports charge either
$3.00 or $4.50 with a few charging nothing.
Every segment will have a fuel surcharge which was $3.50 per segment
until gas went up a few years back. Then it went to $3.70 and has
stayed with a possibility of further increase.
Every segment has a security fee that was implemented after 9/11. It
was $2.50 per segment and had a cap of $10.00 per ticket. This fee
was to have lasted only a year. However, once the year was up,
airlines continued to collect it. Oddly enough, this temporary fee
actually increased to $3.20 per segment.
I may be a bit off by a few pennies on some of these…but you get the
idea. Factor these in with the baggage fees, seat fees, pillow and
blanket fees and the ever increasing change fees and the airline
industry is becoming quite the scam.