Nicholas E. Calio
is president and CEO of the trade association Airlines for America
More than 210 million passengers will take to the skies on U.S. airlines this summer, including millions who will pass through Philadelphia International Airport. This six-year high is welcome news for the travel and tourism industry, which generates more than $1 trillion in U.S. economic activity every year.
Sadly, peak summer travel season also means peak tax season for travelers. Even worse, federal mandates allow the government to bury the costs that airline customers pay in government-imposed taxes and fees in the advertised price of a ticket. This is unfair and needs to change.
Commercial aviation and its customers pay 17 different aviation taxes and fees, totaling more than $19 billion in fiscal 2013. A whopping $62, or 20 percent, of a $300 round-trip ticket is actually taxes and fees. The burden will get even higher when the Transportation Security Administration fee more than doubles in July.
The tax burden imposed on air travelers - a higher rate than the "sin taxes" on alcohol or tobacco - is largely hidden from view. Federal rules require airlines to bury taxes and fees in the base price of a ticket. This allows the federal government to somewhat cleverly raise quick money without consumers realizing it, and in a way that places blame on the very product it taxes: air travel.
Members of both political parties recognize the problem and are working together to fix it. The Transparent Airfares Act working its way through Congress would allow airlines to clearly delineate how much of a customer's ticket price is due to federal taxes or fees. In the process, it would discourage lawmakers from using air travel as a revenue source every time they need one.
Virtually all other consumer products are advertised using the base price, with taxes added on at the point of purchase. The Transparent Airfares Act would present base airfares and government-imposed taxes and fees in a similar manner, and in the process ensure that the advertised price of a ticket is just that - not inclusive of government-mandated costs. The legislation enjoys broad, bipartisan support in Congress and has the backing of several major labor unions, including the Air Line Pilots Association, the United Brotherhood of Teamsters, and the AFL-CIO.
Left unchanged, the government's existing rules make raising taxes and fees more likely in the future. After all, if consumers can't or don't know what their current tax burden is, what's to stop lawmakers from hiking taxes further?
The federal government should be taking steps to lower costs to consumers and practice the same type of transparency it demands of others. The Transparent Airfares Act represents an opportunity for lawmakers to help their constituents know the true costs of flying. It's time for Congress to stand up for travelers and pass this legislation.