I hate to fly.
There. I said it.
It’s not a phobia or anything. I just find the whole experience grossly unpleasant from start to finish. I can’t figure out ticket prices to save my life. I don’t like being treated like one of a number of cattle. And I hate the whole nickel and dime pricing system from bags to sodas. If I’m paying $500 to get from Philadelphia to Raleigh, I feel like the airlines can spare a can of Diet Coke.
And it appears that things are going to get worse.
President Obama has suggested increasing the cost of tickets by tacking on extra taxes and fees. Specifically, Obama has suggesting implementing a $100 fee for commercial planes and corporate jets (military and small piston engine planes excepted) as a sort of “take off” tax – every time they take off. Additionally, Obama wants to raise the Transportation Security Administration (TSA) per passenger security fee to $5 per leg with an additional bump of 50 cents per year from 2013 through 2017.
The plan is intended to help shrink the deficit and the President is justifying the tax by saying that corporations need to pay their fair share (*turns head and coughs*). But c’mon. It would be easier to ask you and I to write a check directly to the Treasury since the taxes and fees will clearly be passed along to customers. USAir and the like are hardly going to suck up the additional costs.
The extra taxes and fees aren’t likely to sail through a Congress generally concerned about the public’s reaction to touching their pocketbooks. So, for that reason, I expect a significant push back on the $100 take-off tax. But the security taxes might be an easier sale: both Republicans and Democrats tend to support measures associated with boosting Homeland Security. In fact, a key GOP leader, Rep. Paul Ryan (R-WI) had made noise about such an increase before, as part of his 2012 budget proposal. The point of contention on Obama’s proposal? The increase won’t actually be completely allocated to Homeland Security (it’s for deficit reduction, remember?) and the Department of Homeland Security would separately be allowed to raise rates anyhow.
As you can imagine, the airlines aren’t happy. Currently, federal taxes and fees in the US make up about 20% of the cost of a typical $300 ticket, according to the Air Transport Association. The ATA argues that higher taxes and fees will discourage travel – a fact that I normally agree with except that the airline industry wasn’t so quick to drop their prices during the FAA flap earlier this year. When faced with the prospect of lower taxes on tickets, the airlines simply increased their fares to make up the difference… so much for worrying about the cost of travel, huh?
My prediction, for what it’s worth, is that you’ll get the Homeland Security fees and only a part – if any – of the “take off tax.” It’s not a battle that Obama really wants to fight in an election year when he’s already targeting tax increases (especially among the “job creators“). So why pick it in the first place? Airlines have been a favorite whipping boy of the President lately due to the fall out over the corporate jet exemption because folks tend not to empathize/sympathize with those “fat cats” who we imagine to be toasting their good fortune. Especially when the rest of us can’t even get a lousy bag of pretzels.
