Tax day: What are those taxes and fees you pay when you travel? And are you getting screwed?
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It’s tax day, and what better opportunity to ask what taxes you’re paying when you travel, and where that money is going?
Of the big three — air, hotel, and car rental — air travel within the U.S. is the most tax-standardized (which isn’t saying much). Hotel occupancy taxes vary by municipality, and car rental taxes range wildly depending on how badly the state or local government wants to stick it to out-of-towners.
Air taxes, on the other hand, are more readily summarized. But when you learn about how some of those taxes are spent, you may not be happy.
Bob Porterfield of the Associated Press does the heavy lifting for us and tallies them up — 7.5% federal taxes, $3.40 segment taxes for each leg of the flight, $2.50 security fees per segment, and the airport-imposed passenger facility charges of up to $4.50 per landing.
But the real kicker is where some of those monies — in particular the 7.5% federal taxes on all scheduled air tickets — are going:
The federal government has taken billions of dollars from the taxes and fees paid by airline passengers every time they fly and awarded it to small airports used mainly by private pilots and globe-trotting corporate executives.
Fan-freakin’-tastic. Not only do these folks get to opt out of the mass-market security hassles, they get subsidized by the general public till to do it.
You may be asking if private aviation pays a different set of charges to cover its use of America’s overstretched aviation systems. Yes, and no. Mostly no.
Passenger taxes are collected in noncommercial aviation only in instances involving the fractional ownership of private jets, air charter operations and small commuter flights. Instead, it contributes to America’s air transit infrastructure in the form of a fuel tax that covers just a fraction of the services it uses.
For the most part, private jets don’t pay taxes, and certainly not nearly the percentage of taxes to which commercial travelers have gotten accustomed.
So are private jets paying enough? Nope.
A study released in February by the FAA said it cost $2.4 billion just to provide air traffic control for private and corporate planes in 2005. The industry contributed just $516 million in fuel taxes that year.
So how do you fix the disparity? Uniform, distance-based taxation? Fuel taxes? Landing fees? I don’t know, but I’d love to hear your ideas.
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