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Airlines for America: Travel is Taxed Too Much

May 7, 2015 Association No Comments Email Email

As the U.S. Travel Association celebrates National Travel and Tourism Week by asking travelers to complete the sentence, “Travel is __________,” Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, is urging U.S. Travel to recognize that “Travel is taxed too much” and stop waving the banner for a proposed tax increase on airline customers.

A4A is stepping in to protect passengers and filling in the blank to remind Congress, the Administration and others that higher taxes on air travel harms passengers and the economy. Air travel is already taxed at much higher rates than other modes of transportation, and U.S. Travel’s efforts to increase the Passenger Facility Charge (PFC) – or Airport Tax – will only exacerbate the

“It is ironic, to say the least, that an organization advocating for the travel industry would seek to burden travelers with even more government-imposed taxes and fees,” said Sharon Pinkerton, A4A Senior Vice President, Legislative and Regulatory Policy. “While U.S. Travel may use this campaign to talk about travel being an ‘adventure’ or ‘serious business’ the reality is those adventures and business trips are already taxed too much, according to the Global Business Travel Association and Travelers United.”

The U.S. aviation industry and its customers are subject to 17 unique taxes and fees imposed by the federal government. In fact, passengers pay $63 in federal taxes and fees on a typical $300 domestic one-stop, round-trip ticket, approximately 21 percent of the total cost. That’s real money that can mean the difference between a family vacation and a family “staycation.” This puts air travel in the same tax bracket as so-called “sin” products – alcohol and tobacco – which are taxed to discourage use. If U.S. Travel and the airports get their tax increase, a family of four taking one round trip could expect to pay up to $136 just in airport taxes – $64 more, taken directly out of the pockets of American families.

The push to increase the Airport Tax comes at a time when airport funding is plentiful. Since 2008, over $70 billion of airport capital projects have been completed, are underway or approved by U.S. airlines and their airport partners at the 30 largest airports without any increases in the PFC. In addition, U.S. airports currently hold more than $11 billion dollars in unrestricted cash.

“At a time when travel is taxed too much, airports have investment-grade credit, are financially sound and have ample access to the bond market to raise money. There is no crisis, and no need for a tax hike on airlines and their customers,” concluded Pinkerton.

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