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US Aviation Industry Attacks TSA Tax Hike

by Mike Godfrey, Tax-News.com, Washington

16 December 2013


US aviation industry bodies have condemned the US Government's decision to raise the 9/11 Aviation Security Fee, from USD2.50 per passenger to USD5.60 from next year, in a Budget deal endorsed by the chairpersons of the US's bicameral legislature, Paul Ryan and Patty Murray, on December 10, 2013.

Airlines for America President and CEO Nicholas E. Calio said: "Raising taxes is lose-lose for airlines, passengers, jobs and our overall economy. It's inappropriate for Congress to use airline passengers as an ATM when it needs more money. Doubling the Transportation Security Administration passenger security tax would cost passengers more than USD730m annually, placing a huge additional tax on the travelling public, with no direct benefit to those who pay it."

In a similar vein, the Executive Director and Chief Operating Officer of the Global Business Travel Association, Michael McCormick, commented: "Putting aside the rhetoric, a tax by any other name is still a tax. Under the proposed budget, business travellers will share the burden of a billion dollars in new aviation security taxes. To aggravate the damage to business travel and US businesses' ability to conduct business effectively, the additional revenue will not be used to fund programs that benefit travellers. Enough is enough – business travellers are not bottomless piggy banks. Punishing a key driver of economic growth is the wrong approach."

The US Travel Association was more sympathetic, its President and CEO Roger Dow acknowledging that "user fees certainly have their place, the transportation sphere is full of them." He cautioned however that "a proper user fee must ultimately benefit the user." Adding: "It remains to be seen whether the air passenger experience will improve under the fee measures in the congressional budget blueprint. It is concerning that the move appears primarily aimed at getting a big chunk of Transportation Security Administration funding off the strapped federal ledger."

"Our hope is that the new funding structure will be used to perceptibly enhance the TSA's functions," he continued. Examples could include broadening the enrolment effort for the successful PreCheck program, additional testing and acceleration of the TSA's other risk-based screening programs, and boosting funding for redress programs, the Association suggested.

Pulling out the deal's positives, the Association stated: "We are encouraged that the budget agreement will continue TSA staffing of exit lines from secure airport areas, the proposed elimination of which was a very flawed idea. We are also heartened that leaders of both parties took a major step toward restoring stability to the overall budget process. With the recent shutdown having cost the country USD152m per day, or USD2.4bn overall, in travel-related spending alone, it is critical that we not put the recovering economy through that kind of a shock again," Dow concluded.

TAGS: tax | business | law | aviation | budget | fees | United States | Travel

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