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Feds Want To Tax Airline Fees  
User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5214 posts, RR: 7
Posted (4 years 5 months 5 days 12 hours ago) and read 5909 times:

Congressman Oberstar is feeling bereft and has asked the GAO to investigate airlines fees (baggage, ticketing, etc.) to determine whether they should be taxed as part of the ticket price. Herr Ober is apparently drawing a fine distinction between whether the fees are part of the taxable transportation "package" or whether they are an added service, which of course could also be taxed.

More taxes is just what the airlines need. Guess how this one will come out.

http://www.nytimes.com/2009/11/14/business/14fees.html

[Edited 2009-11-15 07:10:33 by srbmod]


Consilivm: Cave ne nothi te vexant
75 replies: All unread, showing first 25:
 
User currently offlinePlaneAdmirer From United States of America, joined Jul 2009, 551 posts, RR: 1
Reply 1, posted (4 years 5 months 5 days 12 hours ago) and read 5868 times:



Quoting MasseyBrown (Thread starter):
More taxes is just what the airlines need.

Just what the passengers need too. Every time the cost of something goes up, there are fewer people who remain who are able to afford it. Eventually nickle and diming everyone adds up to real money.

Enough of this non-sense.


User currently offlineMasseyBrown From United States of America, joined Dec 2002, 5214 posts, RR: 7
Reply 2, posted (4 years 5 months 5 days 11 hours ago) and read 5837 times:

Interesting. In my original post I mentioned the NYT but didn't cite it.

srbmod, you're sort of like the tooth fairy. Magic happens.  Smile



Consilivm: Cave ne nothi te vexant
User currently offlineCARST From Germany, joined Jul 2006, 800 posts, RR: 1
Reply 3, posted (4 years 5 months 5 days 11 hours ago) and read 5796 times:

I think it would be right to tax these fees. Why? They are part of the fare, the airlines just excluded them to offer lower fares.

If the airlines would include all their fees back into the fares again and set these fares to levels where they can operate with a profit the feds would get the taxes, too.


Lets be realistic, i wouldn't like to pay more, too, but the airlines are at fault here trying to "nickel and dime" the pax with more and increasing fees and trying to get away from having to pay the taxes for the whole ticket fare (fare + fees).


User currently offlineTOLtommy From United States of America, joined Dec 2003, 3276 posts, RR: 4
Reply 4, posted (4 years 5 months 5 days 9 hours ago) and read 5650 times:

CARST, companies don't pay taxes. Let's face it, the cost of taxes that companies pay are already loaded into the price of the item. We pay those taxes when we purchase the product, plus sales/VAT taxes as well.

Average airfares in real dollars are lower today than they were in 2000. Yet people complain about "nickle and diming". I'll say it passengers who "nickle and dime" for the lowest fare who are the problem, not the airlines. So the airlines responded by removing items from the fare that the fare no longer covered. Why should I be forced to pay more than I need to just because you still want to check to bags for "free". It never was free.

Now we've got Oberstar pi$$ing and moaning, looking for something else to tax. I'm sure the congressman from NWA is still upset that he couldn't force DL to move to Minnesota. So nothing like abusing your power to tax the industry that dissed you..... The last thing anyone in this country needs is another new tax. Last time I was in Germany, it looked like you could do with a few less as well.


User currently offlineTharanga From United States of America, joined Apr 2009, 1848 posts, RR: 1
Reply 5, posted (4 years 5 months 5 days 8 hours ago) and read 5612 times:

I somewhat agree with CARST, but will phrase it differently.


Airline A includes the flight, a checked bag, some food and check-in as part of the base fare.

Airline B charges separately for all of those things.

Why should the two cases be taxed any differently? They should be treated the same, tax-wise.


User currently offlineJetmatt777 From United States of America, joined Jun 2005, 2725 posts, RR: 34
Reply 6, posted (4 years 5 months 5 days 8 hours ago) and read 5594 times:

More taxes = higher prices = lower demand = less people flying = more jobs cuts and schedule cuts.

Yep, taxes fix everything. Get your head out of your ass, Washington D.C.



No info
User currently offlineCARST From Germany, joined Jul 2006, 800 posts, RR: 1
Reply 7, posted (4 years 5 months 5 days 8 hours ago) and read 5585 times:



Quoting TOLtommy (Reply 4):

I do not disagree with you on the overall cause of too much taxing just to increase the federal income. And you are right, too, that things like free bags were included in the fares some years ago.

But still these "fees" are not fees, but part of the fare, except that the fares today are some kind of a modular system. You buy the base module needed for every flight (save transportation from A to B) and you can buy additional modules if you want (checked bags, food & drinks, etc.).

And that is what i wanted to say, not more ...

Quoting Tharanga (Reply 5):
Airline A includes the flight, a checked bag, some food and check-in as part of the base fare.

Airline B charges separately for all of those things.

Why should the two cases be taxed any differently? They should be treated the same, tax-wise.

 checkmark  That is why taxes on the so called fees wouldn't be a wrong and unfair move here...


User currently offlineAirstairFear From United States of America, joined Nov 2009, 82 posts, RR: 0
Reply 8, posted (4 years 5 months 5 days 8 hours ago) and read 5578 times:

I'm all for including one checked bag as part of the fare (not that I really want any additional taxes). It might do something about people getting on the flight that look like they are moving in!


CAM-1: Aw #. We're gonna hit houses dude.
User currently offlineCOEWR From United States of America, joined Oct 2003, 273 posts, RR: 2
Reply 9, posted (4 years 5 months 5 days 7 hours ago) and read 5495 times:



Quoting Jetmatt777 (Reply 6):
Get your head out of your ass, Washington D.C.

I totally agree...the people in DC are so out of touch with normal American's that they have no idea what this will do! The feds are having revenue trouble because they are spending too much, taxing too much and not letting private enterprise work!!! The more they tax me the less incentive I have to work harder to get ahead!!!


User currently offlineAirbazar From United States of America, joined Sep 2003, 7871 posts, RR: 10
Reply 10, posted (4 years 5 months 5 days 7 hours ago) and read 5482 times:



Quoting TOLtommy (Reply 4):
Average airfares in real dollars are lower today than they were in 2000. Yet people complain about "nickle and diming".

That's a false generalization. Most of my traveling is TATL, and there's no way in hell that fares today are cheaper than in 2000 when you include all the added taxes and fees. Long gone are the days when you could hop over to Paris for a weekend for only $200 all inclusive.


User currently offlineBrilondon From Canada, joined Aug 2005, 4057 posts, RR: 1
Reply 11, posted (4 years 5 months 5 days 7 hours ago) and read 5482 times:



Quoting COEWR (Reply 9):
I totally agree...the people in DC are so out of touch with normal American's that they have no idea what this will do! The feds are having revenue trouble because they are spending too much, taxing too much and not letting private enterprise work!!! The more they tax me the less incentive I have to work harder to get ahead!!!

This is absolutely correct and bang on. I was thinking the same thing but you articulated it perfectly.



Rush for ever; Yankees all the way!!
User currently offlineTharanga From United States of America, joined Apr 2009, 1848 posts, RR: 1
Reply 12, posted (4 years 5 months 5 days 4 hours ago) and read 5356 times:



Quoting COEWR (Reply 9):
I totally agree...the people in DC are so out of touch with normal American's that they have no idea what this will do! The feds are having revenue trouble because they are spending too much, taxing too much and not letting private enterprise work!!! The more they tax me the less incentive I have to work harder to get ahead!!!

Please. They tax airfare. If some airlines have started splitting up the base fare into several components, why should those components then be untaxed? This wouldn't be a new tax; it'd be a way to collect taxes would have been collected had the airlines not discovered a-la-carte pricing.

Why should tax policy give an advantage to Allegiant or Spirit over other airlines, where the quoted fare actually has some relationship to what you finally pay?

Anyway, the government needs to raise more money from aviation, anyway. Nextgen ATC isn't going to pay for itself. Airline pax and general aviation need to pay for the upgrade.


User currently offlineAirbazar From United States of America, joined Sep 2003, 7871 posts, RR: 10
Reply 13, posted (4 years 5 months 5 days 4 hours ago) and read 5321 times:

If anything the Feds should tax all the fees at a much higher rate than the fares just like my annual bonus is taxed at a rate higher then my salary. That would surely do away with the stupid nickle and diming and force airlines into charging more realistic fares.

User currently offlineKhobar From United States of America, joined Mar 2006, 2379 posts, RR: 4
Reply 14, posted (4 years 5 months 5 days 4 hours ago) and read 5311 times:



Quoting Jetmatt777 (Reply 6):
More taxes = higher prices = lower demand = less people flying = more jobs cuts and schedule cuts.

Solution - airlines should eliminate or reduce the taxable fees to keep airfares within reach of their target customer base.

I'd very much like to know the rationale behind the notion that everyone should be flying. Exactly why is it a good thing for airlines to explode, growthwise, if all they are going to do is crash and burn within a short period of time anyway.

Airlines, especially US ones, have lost touch with what paying passengers are wanting. They have held onto the myth that price is the only thing that matters, and that has caused them how many thousands of jobs and zillions of dollars? And their solution is driving more and more passengers off the planes. Brilliant!


User currently offlineJetmatt777 From United States of America, joined Jun 2005, 2725 posts, RR: 34
Reply 15, posted (4 years 5 months 5 days 4 hours ago) and read 5269 times:



Quoting Khobar (Reply 14):
I'd very much like to know the rationale behind the notion that everyone should be flying. Exactly why is it a good thing for airlines to explode, growthwise, if all they are going to do is crash and burn within a short period of time anyway.

Because it's how a free enterprise/capitalist system works. Taxing will only raise prices, this is not the time to raise prices.

So, do you believe only the elite should be flying?



No info
User currently offlineCrosswinds21 From Netherlands, joined Jun 2009, 698 posts, RR: 0
Reply 16, posted (4 years 5 months 5 days 3 hours ago) and read 5228 times:



Quoting CARST (Reply 3):
I think it would be right to tax these fees. Why? They are part of the fare, the airlines just excluded them to offer lower fares.

Nonsense. The last time I flew, I purchased my ticket on aa.com. I didn't check any bags. I didn't eat on the plane. Therefore I only paid the base fare plus the taxes. This also applies to just about every single flight I've taken over the last 5 or so years. Had the airfare been all inclusive, I would have paid more even though I wasn't using any of the optional services, such as checking a bag. So now, how exactly are these add-ons part of the fare? I didn't use them and I didn't pay for them.


User currently offlineIsitsafenow From United States of America, joined Feb 2004, 4984 posts, RR: 24
Reply 17, posted (4 years 5 months 5 days 3 hours ago) and read 5180 times:

Do some math on the tickets today and you are paying another 21-25 per cent in fees and taxes on top of the airlines fare.
Its going higher. Now toss in those baggage fees and "great seat' charges. That $166 round trip
to see Mickey & Friends isn't as cheap as you thought, is it?
safe



If two people agree on EVERYTHING, then one isn't necessary.
User currently offlineAirNz From , joined Dec 1969, posts, RR:
Reply 18, posted (4 years 5 months 5 days 2 hours ago) and read 5140 times:



Quoting CARST (Reply 3):
I think it would be right to tax these fees. Why? They are part of the fare, the airlines just excluded them to offer lower fares.

If the airlines would include all their fees back into the fares again and set these fares to levels where they can operate with a profit the feds would get the taxes, too.

I agree they should be taxed, because they are revenue and needed to be treated as such. They are also a service chosen by the passenger, so thus they can have no gripe. However, I certainly disagree with your 'reasoning' of the repeated 'raise the fares'. Why, and that only benefits those who don't pay for their tickets in the first place, nor are able to scrounge the fees (for what they choose) from their employer? So yes, they're quite happy to have fares increased simply because they don't like having to open their wallets for a few pounds/dollars/euro's. Why should anyone simply going from A to B, needing no 'services' subsidise those who want freebies?


User currently offlineSancho99504 From United States of America, joined Dec 2005, 568 posts, RR: 0
Reply 19, posted (4 years 5 months 5 days 2 hours ago) and read 5104 times:



Quoting Khobar (Reply 14):

For some reason, in the US atleast, it seems that all these so called "business management schools" teach is to control costs. The airlines cut costs thinking it would make a loss into profits, now that theyve cut too much, people aren't willing to pay more money for less, (even though grocery items come at the same cost for less product.) so the airlines got creative with all the fees we have today as they had to cut the airfares to keep butts in seats. The management at airlines, not to mention some employees are ruining this industry. IF you want to act like a general commodity, expect to be treated and payed as such.
Its like Gordon Bethune once said, "why make a pizza so cheap nobodys gonna buy it?"



kill 'em all and let God sort 'em out-USMC
User currently offlineFlighty From United States of America, joined Apr 2007, 8202 posts, RR: 3
Reply 20, posted (4 years 5 months 5 days 2 hours ago) and read 5082 times:

Why should it not be taxed? I am amazed.

Quoting Airbazar (Reply 13):
just like my annual bonus is taxed at a rate higher then my salary.

That is unlikely. At the end of the end of the year, income is income. It does not matter what was bonus or salary. You get taxed on your taxable income. If your bonus pushed you into a higher bracket, then that's good for you. Your statement is true of ALL extra income... it is gradually taxed higher and higher.


It should be the same way with airline fares AND fees. They are one thing, and both should be taxed (or not at all).


User currently offlineSeatback From United States of America, joined Mar 2002, 739 posts, RR: 0
Reply 21, posted (4 years 5 months 5 days 2 hours ago) and read 5067 times:

I hate to say this, but why shouldn't these fees be taxed? With a record deficit, Obamacare on the horizon and fighting two wars, taxing seems like a no-brainer.

This doesn't mean I like it.


User currently offlinePellegrine From United States of America, joined Mar 2007, 2216 posts, RR: 8
Reply 22, posted (4 years 5 months 5 days 1 hour ago) and read 4985 times:

Tax the hell out of them.

These airlines skirting all kind of consumer and regulatory purview by putting their "Profit & Revenue Fee" under the guise of fuel, security, and airport fees etc. is scam-worthy.

Throw down the gavel and tax the hell out of them.  thumbsup 



oh boy!!!
User currently offlineJetmatt777 From United States of America, joined Jun 2005, 2725 posts, RR: 34
Reply 23, posted (4 years 5 months 5 days 1 hour ago) and read 4939 times:



Quoting Pellegrine (Reply 22):
Tax the hell out of them.

These airlines skirting all kind of consumer and regulatory purview by putting their "Profit & Revenue Fee" under the guise of fuel, security, and airport fees etc. is scam-worthy.

Throw down the gavel and tax the hell out of them. thumbsup

And away goes all the air travel that you love so much....

Quoting Seatback (Reply 21):
I hate to say this, but why shouldn't these fees be taxed? With a record deficit, Obamacare on the horizon and fighting two wars, taxing seems like a no-brainer.

Unfortunately, yes, it does need to be paid for. Destroying the airlines is not the way to pay for it though.



No info
User currently offlineKalvado From United States of America, joined Feb 2006, 485 posts, RR: 0
Reply 24, posted (4 years 5 months 5 days ago) and read 4929 times:

what would make really interesting, is if feds would see fees as taxable, and demand backdate taxes on those fees to be paid as well..

25 Pellegrine : Yes but just because airlines operate in a harsh, competitive business environment does not mean they are exempt from normal taxes which all business
26 Nwarooster : People want to avoid the fees, they could simply STOP flying.
27 ThreeIfByAir : Imagine this (seems like an easy way to avoid paying taxes): Ticket: $1 (taxed) Other Fees (security, PFC, etc.): $23 Baggage Fee (covers any items ca
28 Mir : Exactly. Airlines are treating fees as revenue, but they're not paying taxes on it the same way they do on their fares. Yeah, because a couple dollar
29 Post contains images Aerokiwi : That's right, blame the customer, not the legacies that continue to lose money hand over fist. I wonder if perhaps that mindest and the financial per
30 Toltommy : You can check it out on the DOT website if you'd like. I know it referenced domestic airfares. Airfare is the key word. Yes, the taxes on your TATL t
31 Jetmatt777 : In a few years, will it remain $2? Every dollar counts to most people in this economy, every extra tax they tack on will just hurt more and more. Pen
32 Seatback : This tax won't destroy the airlines. What will destroy the airlines is an out of control cost structure that cannot be maintained; self-deprecating u
33 Post contains links 764 : You are under the same misconception that many students run into in their first few economics classes. If you examine price change, you have to build
34 Continental : Are the additional taxes really THAT bad? I booked a flight recently that had $21 in fees. That comes out to around $1.50 in additional tax. Do you th
35 Mir : You know what also hurts? An antiquated air traffic control system, and the delays that it creates. How much do you think those cost everyone in lost
36 Jetmatt777 : So why continue to add pressure to that cost-structure. There are only so many straws you can put on a camel's back before it breaks. Although indivi
37 Mir : When is it a good time to add taxes, really? No matter when this is proposed, the same arguments against it will get raised. -Mir
38 Jetmatt777 : Well, I am one that is all for lowering taxes as well as lowering spending, especially deficit spending. I would be less against it if the economy wa
39 Mir : May I assume, then, that you are also heavily against the fees that the airlines charge passengers in bad economic times? -Mir
40 SuperDash : Airline: Hi Mr. SuperDash, you would like to check 2 bags? SD: Yes I would. Airline: Well the first bag is $15 and the second is $25. But there is a 7
41 Rampart : Therefore it is also not the time to add fees, by that argument. I argued a while back that if each airline managed to raise each fare an average of
42 Vfw614 : No taxes are added. Tax evasion by airlines is stopped. That's all. I personally cannot label 50, 60, 70% of my income as "fees" just to avoid having
43 Beeweel15 : They should sell airlines seats like new cars are sold. Have your base price then add your options then tax the final price. Base Fares - YDiscount ,
44 LoneStarMike : Here's two things I noticed from the article. Does it really cost the airlines $150 for someone to change their reservation? I don't think so. And thi
45 Mir : This would be the best idea, but unfortunately most people don't pay all the fees at once. They buy the ticket, then pay the bag fees when they show
46 Speedbrds : Why don't we just give the damn Fed's our paychecks while we're at it! Wait! We pretty much do! They already seem to increase taxes on just about anyt
47 Tharanga : Exactly. I think some people see the word 'tax', and say generic things about tax hikes, instead of looking at what is happening here. Say what you w
48 Jetmatt777 : No; Because those are dictated by the private sector. I can easily give WN my money because they don't charge. Vote with your wallet, don't let the p
49 Tharanga : That's what we're talking about. The only difference being logistical, as fees are paid at various points in time, not all up-front. If Allegiant's a
50 CV990Coronado : There should be a fare which covers the cost of transportation from A to B. Fuel surcharges airport user fees insurance/security fee should all be in
51 Burkhard : I dont agree. Prices are given by supply and demand. Costs are only steering the amount of supply, nothing more. Changes of sales taxes have practica
52 Tharanga : It's hard to give across-the-boards conclusions about something like this. A company will pass on a tax increase to the customers if it can; otherwis
53 Fxramper : More taxes don't necessarily mean less passengers flying. I haven't seen any evidence (above) to support this claim. I know my company has been dodgin
54 Tharanga : The fuel surcharge is the biggest nonsense. I can understand fees for checked bags, telephone reservations, better food, alcohol, headsets and so on.
55 Rcair1 : It has been proven several times that an increase in taxes does not increase revenue to the government except in the short term. Raising taxes, parti
56 Rampart : This lack of tax on fees is actually a tax dodge. There is no increase to correct it. It should be taxed at the same rate that the rest of the fare i
57 LoneStarMike : Don't get me wrong. It's not so much that I want to see higher taxes. It's a case of me wanting all airlines to be on a level playing field. And the w
58 Sancho99504 : Great question. I know, being an owner operator of a tractor trailer, I not only pay a state fuel tax, and federal fuel tax, but then, I get to pay a
59 Panova98 : These discussions on fares and taxes makes one's head spin. Add on our philosophy about taxes, increasing/decreasing taxes, and user fees, and we're o
60 Post contains links Kalvado : beware of what you ask for.. http://www.washingtonpost.com/wp-dyn...le/2009/02/20/AR2009022003331.html http://www.terrapass.com/blog/posts/...-succes
61 Steeler83 : Which leads the idiotic politicians to look for something else to tax (or tax more) to offset the losses. When in the hell are we/they going to reali
62 MSNDC9 : So how much crap did you put in the bin over everyone's head? Ditto. Ditto twice. One has to wonder what would happen if bottom feeder fares were no
63 GSPSPOT : Dear God in heaven, NO!!!
64 UALWN : Some of them pay for teachers, for Medicare, for roads, for ATC, for the Army, the Navy, the Marines and the Air Force...
65 Enilria : I agree that more taxes in general are bad, but I agree with CARST that the airlines have bypassed the tax on air transportation by moving more of th
66 Rcair1 : Amen. As a long haul driver - you are doing this as a commercial business and can offset the taxes with fees. For people who do not make their living
67 Steeler83 : I get that. Yes, we need some taxes to pay for our services. But IMO there is such a thing as too much taxes... Altho: Hmm
68 Junction : I'm kind of confused by this. The airlines will simply collect the tax from the traveler. Airlines would not pay anything if the a la cart fees get ta
69 Sancho99504 : The way the system is right now for the trucking industry, we pay weight based mileage, fuel purchased, fuel used, and miles driven which is pure ins
70 Junction : Not in the airilne industry.
71 UALWN : I was just giving examples of services that people take for granted, and which are paid for by taxes. This is not the place for a discussion about th
72 Isitsafenow : [quote=Junction,reply=70]Quoting Sancho99504 (Reply 69): its been proven time and time again that people will pay more for better service and a higher
73 Sancho99504 : Maybe not in the United States, however, other airlines in other countries have shown that people are willing to pay more. SQ, EK, QF, EY, NH, CX, ju
74 Tharanga : This seems like circular logic. Are people willing to pay more, or are they not? Or are you saying Americans are somehow different? I wonder how comp
75 Curiousflyer : Noone likes taxes but they are necessary. There is no reason to tax fees less than fares. The fees are just about unbundling the cost of flying, not u
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