Obama proposes $100 per flight fee and Southwest Airlines objects

No kidding. This article speaks for itself.

This is one of the dumbest things to come out of the Administration yet. The airlines are already over-taxed, more so than so-called “sin taxes” levied on tobacco and alcohol. The airlines support a huge segment of the national economy–the travel industry.

This is an astoundingly stupid idea.

 

30 Comments on “Obama proposes $100 per flight fee and Southwest Airlines objects

  1. Of course it is an astondingly stupid idea. We have a president who astondingly doesn’t get it.

    This tax idea is about as smart as the EU taxing airlines for flying through the air.

    Taxes, and increases in taxes is always the only answer to any funding problem a politician may have, no matter what the party affiliation may be.

    Both the US and EU tax and spend ideas are only to support social programs and line the pockets of crooked politicians.

    I might point out that Obama’s plan will also effect the chartered airlines his opponents need to use for their election campaigns, yet he flies aboard his custom built B-747 (VC-25A) called Air Force-1

  2. welcome to the Soviet socialist republic of the Yew Nited States Animal farm

    Giving a hand wave to the peasants below

    “Some of us ARE more equal than others ”

    talk about killing an industry- and hammering the U.S largest by $$ exporter AKA The Boeing Company

  3. Unbelievable! As if airline fares aren’t high enough already. I remember 40 years ago-how pleasant it was to fly. The attendants were always ready to help and very considerate of older people, The food was always good and snacks and drinks were aplenty. We didn’t have to worry about virtual strip downs or taking shoes and belts off. The prices were reasonable-comparatively. The seats were more comfortable-cabin a little less crowded. I loved to fly. I think about how recently I flew from Grand Rapids, MI to Anchorage, Alaska. I wasn’t offered complimentary food or snacks. The seating was crowded and when I needed help, because of mobility problems resulting from older age, flight attendants were inconspicuously absent! Many older people were on that flight and, basically, very few got any assistance. How I long for the good old days when flying commercially was fun!

  4. I’m guessing the federal government spends money on roads that it never recovers, so I don’t see the logic here.

    If they want to pay off the national debt, just have the railroads write a check for all the free land they got in the 1800s.

  5. Why, oh why do so many people seem to see the airline industry as a cash cow to be milked? If it isn’t the unions, it’s government. While it is true a lot of cash churns through the world’s airlines’ general offices, precious little is left over after the horrendous expenses to retain for growth much less enrich stockholders and pad executive perks and payouts. Countless airlines, including some of the world’s foremost, have folded their wings over the past thirty years owing to the financial bloodletting to which they are subject. If Obama is going to insist upon sticking it to the airlines, ie the American people, then let him give up the three Boeing 747s in his personal Presidential fleet and charter from the nation’s airlines for his transportation needs.

  6. That’s right, why have our air travel system pay for itself through proper taxation, let’s pretend it is free and steal the money from esewhere. Or let’s behave like 5-year-olds and squeal that we must live in a Soviet republic because everything isn’t free (which is delicious irony as the real S0viets thhought it all would be free);

    Yes, the Republicans have it better, end taxes to spare the 1% (billionaires) to have to pay anything and then shut down the FAA.

    Living in a modern first-world society costs money and Leeham is just another child who wants everyone else to pay the bill. Dumping this RSS feed now.

  7. Pavlovian reflexes?

    Upto $100 _per takeoff_ involving ATC services.
    ( that is below 75 cent per person, where is the beef?
    your country is broke, broke, broke )

    Upto $7.5 per passenger security fee
    ( why not just stop the TSA carnival ?)

    The ( rightwing?) flappers for Obama seem to have a knack
    to rephrase in the worst possible wording.

    • I agree – when you read that it’s actually $100 *PER FLIGHT*, not per passenger, then this outrage is pathetic. A modest $7.50 tax per passenger is the real tax here, and it talks about trying to raise a certain amount of cash by Thanksgiving… so presumably this is only a temporary thing. Sheesh!

      • Don’t know about France but in the US, no tax ever seems to be “temporary.” They have a way of becoming permanent. Airlines also are not always able to pass on the tax to the customer due to price competition and sometimes have to absorb it. Then there is the cost of administering and remitting the tax.

        Congress, regardless of party, views the airline industry as a cash cow because there is no constituency to worry about.

      • According to the articles I’ve read, the air transport industry doesn’t pay the full cost of infrastructure needed to support it. The tax is supposedly being dedicated to close the gap and isn’t being used on other non-aviation purposes. Is that not true?

        • In theory, that’s true but FAA funding has been co-mingled in the past with non-infrastructure items and in Europe, the environmental taxes are going straight to general funds of the imposing countries and not dedicated to enviro uses.

          It’s also true that the air transport industry is not alone in not paying the full cost. Railroads don’t. Highway users don’t. Public transit riders don’t. These are all subsidized uses. Why should the airline industry be targeted for “full cost”?

    • For a typical SW flight, yield after costs is not much more than $1000. For high efficiency operations with thin but consistent margins, this tax would essentially a 10% hit to the bottom line.

      • No quite right imho.

        This was an externalised expense ( to Big Government providing an extensive ATC system free of charge ).
        This error has been corrected 😉

        An aside:
        I can’t understand that full blooded capitalists are crying foul
        for being presented a fair bill.

        As a solution: get rid of the Chapter 11 type Bankruptcy.
        Let failures burn for good instead of taking the creditors hostage and continuing with the same bad business
        model for yet another round.

  8. I agree with Uwe. Less than $1 per person pr flight does not seem like that big a hit and the extremely poor people who cannot afford to fly are not going to be crying the blues over this fee.

    I didn’t see too many people complaining about the $7.50 increase in the security fee. It seems that most find that an acceptable price to pay for their peace of mind.
    Perhaps they should see this less than $1 fee as a payment towards the future well being, hence security, of their country.

    Without getting too political here, I do wish the government had not made all of those airline and car company bailouts. Some just don’t get how much wose it would have been if that had not happened.

  9. What you don’t understand is any new tax is just the “camel’s nose under the tent”. It is the beginning of a never ending increase. Any one who believes that a 75 cent to $1 costs per passenger is it is dreaming. The airlines will tack on an extra $5 per ticket to cover the costs, and that will be only the beginning. They will also add $10 for the TSA “fee”. These “extra” price increases over the costs of the taxes will be to cover the “handeling fees” by the airlines to process the taxes. These fees will be around forever.

    Don’t believe it? How many airlines have stopped charging the $25 per checked bag fee?

    Also giving the government more money is giving them more spending authority. The US government already exceeds its “revenues” each year by spending about 40% more than it takes in. So, for every dollar they get from these “new taxes” means they will spend (at least) an additional $1.40.

  10. I have to admit I almost fell for it. I saw it as 100/pax and thought “that’s insane”, however a 100 per aircraft isn’t so bad. Especially considering the state of the ATM system that the FAA desperately needs to replace. Of course, the Congress cut the FAA budget so guess what? We are stuck with an even longer ATM overhaul period. Anyone remember 1997 and the utter mess that summer was? Well the ATM system hasn’t changed much since then. To be brutally honest, the US ATM system was lucky that passenger traffic collapsed after 9/11. The system would have imploded otherwise. If this fee is for fixing the ATM system, then I’m for it, if it’s just going to go to the “general fund” then no. It’s not about silly camels under tents, or any hogwash, its about effective use of funds.

    I am waiting to see the reaction from many of you when Obama is re-elected. It’s not that he’s been a great President, though he hasn’t been that bad given what he’s had to deal with. The main problem is that the quality of the Republican candidates is so low that none are a serious threat.

  11. The never ending tax. from memory – around 1895 or so a temporary tax was imposed on the ‘ telephone”, which only affected a few or the more affluent who could afford them.

    They needed to pay for the Spanish -American war or some such

    It was around the year 2000, when that tax was removed

    • Not just taxes “till” death. In the US, there is an “estate tax” in most states and the federal government that requires the heirs to pay an estate tax, AKA “death tax.”

      • You are faling for the GOP mincing of words.

        The income of the living by way of inheriting from the dead
        is taxed. Same tax would apply if you transfer the inheritance
        while the holder is still living.

        Actually quite a bit of the possible solution to current US unsolved financial and other problems have been shot
        down with carefully crafted and absolutely tenditious retellings from the conservative side.
        Any rational discussion quenched with a volley of emotionally
        loaded words.
        It is destroying your country in an accellerating spiral.

  12. The TSA should be screening bus, train, and subway passengers and they should all be paying a $7.50 security fee. Why is only air travel targeted, people’s inherent psychological fear of flying?

  13. Well, I just don’t see this bill ever getting out of the House of Representitives. The Republicans don’t want any part of any tax increase, or new tax. In the Senate, 1/3 are up for reelection in 2012, and it will be mostly Democrats this time around. They also don’t want to be part of any new tax in a poor economy.

    On the plus side, along with the Congress not wanting to do this (some of the senior Democrats will be for it), Obama may very well loose his reelection bid in 2012.

    Scott, are we getting to deep into US politics here?

  14. KC135TopBoom,
    So are you more upset about the less than $1 charge per passenger or the fact that the airlines will use and abuse it?

    Seems to me that the problem is not the government per se (yes we already know your opinion of President Obama and the democrats in general) but rather the willingness of the airlines to take advantage of this “tax” and wring it for all its worth.

    From your comment, one could deduce that the airlines are really all for this tax but wouldn’t be silly enough to say so publicly.

    • Good morning Aero Ninja, No, I don’t think the airlines are on board with this tax. It will cost them millions of dollars to process the tax to the government, with no compensation for it.

      It is not the fact that this will cost the paying passengers less than $1 per ticket, and probibly not deductable on that person’s own tax return forms. It is about the fact that any tax will grow in cost, and will be around forever. As Dshuper already pointed out, a tax long outlives its original purpose, in the telephone tax he pointed out. Another tax that was only suppose to have a life span of a few years is the alternative minimum tax (ATM) here in the US. It started out being called a “surtax” by President Johnson in the 1960s to help pay for the Vietnam War. A simple name change by President Carter in the late 1970s and the tax is still with us. The ATM rates have increased and lowest threshold the tax applies to has decreased, causing more and more people to have to pay it. The ATM is simply a method of taxing people after they use the legal deductions, exemptions, and tax credits they are eligable for.

      This tax, like almost every other tax proposal is just plain stupid, and is yet another oppertunity for the government to claim (steal) money it should not receive.

      I am not against every new tax scheme. If the tax makes sense and is equiptable and simple, I might like it, after I read the details. For example, from what I have read (not all the details are worked out yet) about Herman Cain’s 9-9-9 plan I could like and prefer it over what we have now. Of course the devil is in the details, and I would need to know much, much more.

  15. Uwe :
    I can’t understand that full blooded capitalists are crying foul
    for being presented a fair bill.

    Most American’s have a very different view of capitalism than other parts of the world, and certainly different than western Europe. Most of us view the commercial aviation industry as having paid for it’s government funded infrastructure many times over in direct taxes plus tax revenues generated from the economy it helps to power, including the people it employs. It’s why a true American capitalist doesn’t get all worked up when Democrats point out GE pays little or no income taxes some years. I realize this is a hotly debated financial construct, but it is currently how the American system of revenues to government coffers is set up. It works great if the government can learn to operate within the revenues generated.

    You won’t get any argument from me on reforming the US bankruptcy laws. They are criminal IMO.

  16. this additional and extraordinary airline tax proposal only makes sense when viewed through the lenses of ‘global warming’, ‘cap and trade’ and ‘paying their fair share’. i noticed a decade ago that the reds were quietly and almost imperceptibly changing colors to become greens. many of my european friends never did, and they’re awakening to a brave new world.
    luckily for us, massive social and economic changes are in store for 2013. our airline system will survive, spurred by a return to free market capitalism.
    european mileage may differ.

  17. leehamnet :
    Yup, we are KC. And on this one we’re going to let it go since taxing airlines to death is a political decision.

    i would suggest ‘taxing airlines into government bail-out and re-regulation’ would be more accurate. one must understand about four layers of political and social agenda here to get a clear picture of the ‘organized community’ forest.

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