Pay down the national debt with airline taxes?
It’s part of the President’s plan to pay down the national debt, and it has the travel industry fuming.
The Air Transport Association of America (ATA), is calling on Congress to reject the President’s $3.5 billion airline tax plan.
When we step on a plane, we currently pay $2.50, but the government says this fee only recovers about 43-percent of TSA’s costs. Under the the proposal, we’d pay a flat fee of $5.00 for a one way trip. Between 2013-2017, the fee would increase 50-cents. By 2017, the fee would be $7.50.
The government says this fee alone would collect $24.9 billion in the next 10 years. $15 billion of that would pay off the debt.
ATA represents airlines and says the taxes would mean higher fares, reduced service, and fewer jobs.
“The U.S. government continues to use the airline industry as a cash cow, rather than seeing airlines as a growth enabler and understanding the strategic nature of aviation and what it takes to support one of our country’s most critical industries,”ATA CEO and President Nicholas Calio said at a speech to the International Aviation Club of Washington.
When you book a ticket today, 20-percent of the average $300 domestic round-trip ticket is fees.
There are also proposals to change the way airlines pay taxes on their planes.