A Very Clear Example

Since the stroke of midnight on Friday night, the Federal Aviation Administration (FAA) has been shut down because Republicans in the House are demanding that airline employee's union rights be curtailed.

One side effect of the shut down is a loss of roughly $200 million dollars per week in revenue for the federal government because ticket taxes aren't being collected. Yet despite this temporary elimination of taxes, costs to consumers have remained the same. Imagine that.

By Saturday night, nearly all the major U.S. airlines had raised fares to offset taxes that expired the night before.

That means instead of passing along the savings, the airlines are pocketing the money while customers pay the same amount as before.

American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details sometimes differed. Most of the increases were around 7.5 percent.

Just to reiterate: A federal ticket tax is currently not being charged to the airlines because the FAA is shut down, but the airlines have raised the cost of tickets to match the previous price which included federal taxes. So a "job-killing" big-government tax has been temporary eliminated, yet the cost to you, the consumer, remains the same.

Big Business does not always have your best interests in mind, America. Taxes or not. Regulations or not.

  • red_pills

    Big business has NEVER had the public’s welfare in mind, and never will! The corporate interest is antithetical to the public interest—the corporate interest is profit, whereas the public interest is, by definition, far more utilitarian.

    God damn the 1886 Santa Clara SCOTUS decision ensconcing corporate personhood as legal writ. Historians will someday doubtless see it as a watershed in the decline of this republic.

  • muselet

    My (feeble) understanding is that since the FAA does not currently have taxing authority, those taxes are lost forever. I could be wrong, of course.


    • Ned F

      I might of spoke too soon, I think on Maddow she just mentioned this IS a tax holiday making this “crisis profiteering”. Hmm.

  • If Ned is wrong (and I hope he is not!), this is a good example of how ‘lowering taxes’ rarely has the effect ascribed to it by the more conservative half of Congress.

  • Ned F

    I would think they still have to remit the tax for this period anyway. It’s not a tax holiday, just a time when it won’t be collected. I could be wrong, but that’s usually the way it goes.

    • Clancy

      I agree that you’re likely right on this one. However, if true, would not the airlines be required to pay a higher amount than they otherwise would (on the elevated fair price they are now charging their customers)? Or, are the fees/taxes a set rate rather than based on ticket price?