Why sequester shouldn’t hurt airline travel — we pay user fees when we fly

by Charlie Leocha on March 6, 2013

A4A Aviation Tax Chart
As I listened to Secretary LaHood and Secretary Napolitano warn about the draconian cuts they will be forced to make in terms of air traffic controllers, TSA screeners and customs and board agents, I began to wonder why air travelers are whacked with user fees every step of their journey.

Shouldn’t travelers be immune to the sequester? After all, our mandatory travel user fees associated with flying are not dropping. Why are we being threatened with cutbacks in services that we pay for every time we fly, go through security or re-enter the country?

According to Airlines for America, the airline industry trade group in Washington, DC, airline passengers are some of the most taxed individuals in the country. Passengers are taxed at a higher federal rate than alcohol and tobacco.

• Since 1990, the number of aviation taxes/fees has increased from six to 17; the total amount of taxes paid by the industry has grown from $3.7 billion to $17 billion over the same period.
• The tax burden on a typical $300 round-trip ticket has nearly tripled since 1972, rising from $22 (7 percent) to $61 (20 percent).
• Annually, airlines and their customers contribute $10 billion to $12 billion to the Airport and Airway Trust Fund; general aviation contributes about $200 million.
• Airlines and their customers already incur $3.4B-$3.8B per year in federally imposed security taxes/fees.

Specifically, here are the user fees passengers pay:
7.5 percent Excise Tax
9/11 Security Fee = $2.50 per flight number to a maximum of $5 per one-way or $10 per roundtrip
Federal Segment Fee = $3.90 per takeoff or landing (maximum of $15.60)
Passenger Facility Charges (PFCs) = up to $18

When traveling internationally, we have to pay additional user fees to take off and land, to have our passports checked and our luggage inspected for customs.

International Departure Tax = $17.20
International Arrival Tax = $17.20
Immigration user fee = $7
Customs user fee = $5.50
U.S. Animal and Plant Health Inspection Service fee = $5

I’m sorry, but travelers should not be lumped into the sequester because the funding is separate and distinct. Passengers pay user fees, lots of them.

In 2012, passengers paid $12.32 billion in excise taxes to keep the FAA operating — around 80 percent of the FAA’s budget.

The Airport and Airway Trust Fund currently raises more than $12 billion annually from a 7.5 percent tax on domestic airline tickets, a tax on each segment flown, taxes on gasoline and jet fuel, international departure and arrival taxes, and half a dozen other fees. Trust Fund revenues pay for almost four-fifths of the FAA’s $16.4 billion budget…

Plus, passengers paid $3.76 billion to the Department of Homeland Security that goes to funding TSA security and Customs and Immigration at the borders.

Even if DC bureaucrats were forced to cut programs, airline and airport operations should only be affected with 20 percent of the cuts other programs that are not supported by user fees face.

For the administration to threaten airline travelers with flight delays, cuts in TSA inspectors and longer customs and immigration lines when we are paying most of our way, is uncalled for and fiscally foolish.

Worse, as sequestration kicks in without taking into account the billions in user fees that passengers pay today into the FAA and Homeland Security budgets, air traffic will be curtailed and travel will drop, resulting in less revenue to fund both the FAA and Homeland Security.

This is the ultimate case of cutting off your nose to spite your face.

As our geniuses in Washington fiddle with the financial controls of governing, it would behoove them to limit their budget cuts to non-operational sectors of the FAA, DHS, TSA and CBP. They should keep their hands off the operations that we passengers pay for every time we fly.

Print Friendly
Be Sociable, Share!

  • Keith

    Excellent point, where exactly are all those fees we pay going?

  • Diver Dan

    Don’t tax you and don’t tax me, tax the man behind the tree.

    Of course we pay our way, all the fees for security (TSA) are to cover all costs, but it is a cut that may prompt vocal people to protest by writing/calling there Representatives in Congress. Just like when a local government “has to” close swimming pools in summer to balance the budget. Smallest dollar saved but biggest impact on people so they protest and begrudgingly accept a tax/fee hike.

  • Lotus

    The user fees may be labeled as being for a particular purpose, but in reality the money all goes to a general fund to Congress who then re-appropriates the money back to the departments. They (Congress) can choose to give back the same amount they brought in, more, or less. This is how the federal government is run — it is not a business. In addition, the sequester was intended to cause draconian cuts across the board so everyone would feel the pain equally; it was never intended to be logical or reasonable.

  • http://www.tripso.com/author/leocha Charlie Leocha

    Not so: From http://www.downsizinggovernment.org/transportation/airports-atc

    Congress started taxing the commercial aviation industry soon after it was established. It passed an excise tax on gasoline and aviation fuels in 1932 and an excise on airline passenger tickets in 1941. The revenue from these levies went into the federal government’s general fund. That changed in 1970 when Congress passed legislation creating an Airport and Airway Trust Fund, which had dedicated streams of revenue to be used for air traffic control and federal aid to airports. Trust Fund revenue sources included ticket taxes on domestic and international flights, taxes on fuels, and various fees.

    The Airport and Airway Trust Fund currently raises more than $12 billion annually from a 7.5 percent tax on domestic airline tickets, a tax on each segment flown, taxes on gasoline and jet fuel, international departure and arrival taxes, and half a dozen other fees. Trust Fund revenues pay for almost four-fifths of the FAA’s $16.4 billion budget, with the balance coming from general federal funds covering the FAA’s safety regulatory and miscellaneous other activities.

    This fund is tightly controlled, not like the lock box of Social Security.

  • reasonedthought

    Just a quick correction to Charlie’s tax explanation. The so called 9/11 Security fee is not $5.00 per round trip, it is $2.50 per take off. This means that if your flight goes from LAX to Denver with a stop in Las Vegas and then you return on a nonstop flight, making a round trip, you would pay $7.50, not $5.00.

  • http://www.tripso.com/author/leocha Charlie Leocha

    Thanks for the correction. I modified the fee description — $2.50 per flight number to a maximum of $5 per one-way or $10 per roundtrip.

  • Pingback: PM Business Links: Why Fannie Mae is still on federal dime; Yahoo says new …

Previous post:

Next post: