When purchasing a product or service, we all like to see the itemized list of charges – one that separates the cost of the purchase from the share going to Uncle Sam through the form of taxes and fees.  Needless to say, government bureaucrats don’t like that.  They desire that we remain blissfully ignorant of government’s burden on our everyday lives.  This is one reason why they concocted the withholdings scheme for income tax collection.  Now, they are expanding their tentacles into commercial taxes so they can obfuscate the magnitude of taxes and fees on airfare purchases.

Without much fanfare, the Department of Transportation (DOT) enacted a rule which requires airlines to ensconce all government taxes and fees in a single total advertised price with the fare.  For example, if you purchase a $350 plane ticket with $50 of taxes and fees, the DOT is demanding that the airline advertise the price as $400.  Airline passengers pay over a dozen taxes and fees on any given airplane ticket, but the government doesn’t want us to know that.  The rule was finalized last April, but only took effect last week.

The timing of this rule is very fortuitous.  This week, Congress will finalize negotiations for a long-term FAA funding bill.  This bill authorizes the collection of all taxes – including taxes on aviation fuel, domestic and international ticket taxes, and cargo –directed to the Airport and Airway Trust Fund, which provides the bulk of FAA funding.  As usual, Democrats want to spend more money on wasteful projects, and are all too hungry to increase aviation taxes.  What better way to leverage tax increases than by forcing airlines to hide their cost and to shoulder the blame for the perceived higher price tag at the top!

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When purchasing a product or service, we all like to see the itemized list of charges – one that separates the cost of the purchase from the share going to Uncle Sam through the form of taxes and fees.  Needless to say, government bureaucrats don’t like that.  They desire that we remain blissfully ignorant of government’s burden on our everyday lives.  This is one reason why they concocted the withholdings scheme for income tax collection.  Now, they are expanding their tentacles into commercial taxes so they can obfuscate the magnitude of taxes and fees on airfare purchases.

Without much fanfare, the Department of Transportation (DOT) enacted a rule which requires airlines to ensconce all government taxes and fees in a single total advertised price with the fare.  For example, if you purchase a $350 plane ticket with $50 of taxes and fees, the DOT is demanding that the airline advertise the price as $400.  Airline passengers pay over a dozen taxes and fees on any given airplane ticket, but the government doesn’t want us to know that.  The rule was finalized last April, but only took effect last week.

The timing of this rule is very fortuitous.  This week, Congress will finalize negotiations for a long-term FAA funding bill.  This bill authorizes the collection of all taxes – including taxes on aviation fuel, domestic and international ticket taxes, and cargo –directed to the Airport and Airway Trust Fund, which provides the bulk of FAA funding.  As usual, Democrats want to spend more money on wasteful projects, and are all too hungry to increase aviation taxes.  What better way to leverage tax increases than by forcing airlines to hide their cost and to shoulder the blame for the perceived higher price tag at the top!

Read More →