FAA Shuts Down, Tickets Get Cheaper
Written by Brian Garst, Posted in Big Government, Taxes
Airline tickets are going to get cheaper Saturday unless Congress can reach an agreement before midnight on extending authority for the Federal Aviation Administration, which gives airlines the ability to collect taxes on behalf of the government.
If the FAA’s authority is not extended, airlines would no longer have the authority to collect federal taxes, which according to the Air Transport Association, is about $61 on a $300 round-trip airfare.
The massive federal bureaucracy eats up 20% of what you pay for a ticket. Put another way, the government taxes airline travel at an astonishing 25% rate (For those confused by the differing figures, one is exclusive and the other is inclusive: $61/$300 is ~20% of the total cost, but that also means a $61 tax levied on a $239 purchase, for a rate of 25%). Does anyone really believe the FAA adds that much in value?
I serve as Vice President of the Center for Freedom and Prosperity, a non-profit think tank dedicated to preserving tax competition and free markets. This site features my personal views, which are not reflective of CF&P.