Tags: tax | flyers | airlines | airports

New Tax Proposal Grounds Working-Class Flyers

New Tax Proposal Grounds Working-Class Flyers
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By Wednesday, 08 May 2019 04:10 PM Current | Bio | Archive

Last December, conservatives celebrated the one-year anniversary of the Trump tax cuts, which have sparked historic economic growth, job creation, and stock market gains. That makes it all the more infuriating that some Republican lawmakers are now endorsing a Democratic-proposed tax increase — one that will hit middle-class and rural Americans particularly hard.

The tax those Republicans want to hike is called the Passenger Facility Charge, which you probably have never heard of before — but which you and your family have been quietly paying each and every time you fly. It’s currently set at $4.50 per person for each segment of a flight, which can add up quickly if you have children or frequently fly for work.

Amazingly, some Republicans think it still isn’t high enough, and now want to double it. That means a family of four traveling on a connecting roundtrip would pay $144 in the PFC tax alone. Air travel is expensive enough; it’s hard to believe that GOP lawmakers like Chris Collins of New York and Buddy Carter of Georgia want to make it even more expensive. But that’s exactly what they’re openly talking about doing.

It’s easy to understand why airports want to hike this hidden tax, since the money goes straight to them to spend as they see fit — and is already hitting record levels. U.S. airports took in almost $54 billion in PFC funds between 1996 and 2018, and they’re now taking in more than $3 billion per year.

The only thing more egregious than conservatives abandoning their party’s historic commitment to low taxes is that the new funds would end up in the pockets of the nation’s airports, who simply don’t need the money. Put another way, it would make one of America’s wealthiest industries even richer by taking money out of the wallets of ordinary Americans.

Airport officials love to assert that they don’t have enough money to fund infrastructure improvements to the nation’s airports. This claim is misleading because it fails to mention the $165 billion of capital projects completed, underway, or approved at the nation’s 30 largest airports.

The airports also like to conveniently leave out that airlines are increasingly stepping up to pay for renovations on their own. Take Los Angeles, which last year formally unveiled a state-of-the-art new terminal at Los Angeles International Airport. It cost $516.7 million, all of which came from Southwest — and not from taxpayers.

Finally, and most importantly, airports are flush with cash, and they can afford to pay for renovations on their own. The nation’s 30 largest airports have tens of billions of dollars of projects underway at facilities ranging from large airports like Atlanta’s Hartsfield-Jackson Atlanta International Airport to runway projects at airports in smaller cities like Columbus, Ohio, and Sioux Falls, Iowa.

Despite those ongoing renovations, analysts estimate that airports are also sitting on $14.7 billion in unspent cash — enough to finance their infrastructure needs for more than a year without increasing taxes by even a penny.

On top of that, the Aviation Trust Fund currently has $7 billion in uncommitted funds, a number that will grow to $47.7 billion by the end of the decade. Airports should use that surplus before raising fees on travelers.

The takeaway couldn’t be clearer: the nation’s airports have more than enough to fund renovations without making tickets more expensive by raising the invisible fees that ordinary passengers pay without necessarily even noticing. It’s not a surprise that Democrats want to hike taxes anyway. The surprising part is that some Republicans want to join them. Conservatives need to tell lawmakers like Collins and Carter that a tax hike simply won’t fly.

John Burnett is the Managing Director and Founder of 1 Empire Group consulting firm and a business executive with over 20 years of experience in the financial services and energy pricing industries. A veteran of politics, John is an official with the New York State Republican Party and ran for New York City Comptroller in 2013. An adjunct professor at Hampton University and New York University, John’s editorials on business, the economy, policy, and politics have appeared in HuffPost, U.S. News and World Report, and Washington Examiner. He is also a frequent guest commentator on Fox News, Fox Business News, New York 1, and PIX 11 News. John holds a B.S. with honors from New York University and an MBA from The Johnson School of Management at Cornell University. To read more of his reports — Click Here Now.

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Air travel is expensive enough; it’s hard to believe that GOP lawmakers like Chris Collins of New York and Buddy Carter of Georgia want to make it even more expensive. But that’s exactly what they’re openly talking about doing.
tax, flyers, airlines, airports
Wednesday, 08 May 2019 04:10 PM
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