A4A urges US lawmakers to reject proposed tax hikes on airline passengers

posted on 21st March 2019 by Justin Burns
A4A urges US lawmakers to reject proposed tax hikes on airline passengers

Airlines for America (A4A) has urged US Congress to reject the proposed tax hikes on travel that are included in President Donald Trump’s FY2020 Budget.

A4A said tax hikes on travel would cost passengers an additional $2.9 billion annually on top of the $25 billion they already pay per year and belives the “unnecessary tax” increases that jeopardise the “unprecedented choice, access and affordability that consumers enjoy today”.

The trade organization said increasing taxes in any form would “burden families with higher costs to fly, curtail job growth and limit air service options to small and rural communities”.

A4A said that US aviation and its customers already are subject to 17 federal aviation taxes and fees.

Specifically, the administration’s FY2020 budget request proposes $2.9 billion annually over 10 years in new and higher federal aviation taxes and fees on the traveling and shipping public.

These include increases in TSA passenger security fees from $5.60 to $6.60 in FY2020 and from $6.60 to $8.25 starting in FY2021. This proposal will increase taxes an estimated $600 million in FY2020 and $22.4 billion between 2020 and 2029.

The budget proposes to increase the customs inspection fee by $2.10 (to $7.75). The estimated tax increase on aviation passengers is $272 million in FY2020 and $3.2 billion over 10 years.

And the the budget proposes to increase the Immigration Inspection User Fee (IUF) from $7 to $9. The estimated tax increase on aviation passengers is $273 million in FY2020 and $3.2 billion over 10 years.

President Trump’s administration proposes to establish a new discretionary user fee for the Animal and Plant Health Inspection Service (APHIS) Agricultural Quarantine Inspection (AQI) pre-departure program. The estimated tax on aviation passengers is $20 million in FY2020 and $212 million over 10 years.

A4A also called on Congress to end the practice of diverting security fee funds away from security to instead pay for deficit reduction. Since 2013, it said approximately $1.3 billion per year in TSA fees are being diverted away from their intended purpose, which is to pay for aviation security screening.

Similar diversions the trade organization said have also been used for CBP fees and instead of increasing taxes, there “should be a focus on addressing the annual diversion of billions of dollars of security funds”.