“To place additional taxes on airline travel might assist with closing the budget gap in the short run, but such actions will no doubt have unintended, long-term negative consequences as consumers already faced with tight budgets cut back on air travel or eliminate it altogether,” said Tony Gonchar, ASTA CEO. “The results could be catastrophic for an industry already struggling to recover from the recent recession which saw millions of Americans curtail their travel.
“It won’t be just the airlines that feel the resulting pain, but travel agencies who sell air, hotels and resorts, cruise lines and car rental companies to name a few. The resulting loss of jobs would only serve to compound our current economic troubles, rather than alleviate them.”
According to a release recently issued by the Air Transport Association of America, the industry’s non-income tax burden has grown from $3.7 billion in 1993 to approximately $17 billion today. In 2010, U.S. airlines and their passengers contributed $3.4 billion in taxes and fees to the Department of Homeland Security, including $2 billion in taxes and fees to the Transportation Security Administration – a 50 percent increase from the amount collected in 2002. Taxes on ARC-settled air fares sold by travel agents increased from 9.7 percent in 2001 to 16.63 percent in 2010.
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