Taxes

Taxation Without Transportation

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Ever tried to cancel an airline ticket, only to discover that all the taxes, fees, and other annoying tacked on charges aren't refundable? Turns out it's just the U.S. government that keeps taxes for services not rendered.

European airlines refund taxes and fees, even when the ticket itself is nonrefundable. "For airlines, refunding the taxes and fees actually showcases to consumers what a large percentage of tickets those expenses are—an issue that airlines have been harping on for many years."

And we're not talking chicken feed here. From The Wall Street Journal:

Last year, taxes and fees on U.S. domestic flights averaged $50 per ticket, with an effective tax rate of nearly 16%, according to a study by the aviation division of Daniel Webster College in Nashua, N.H. (The average domestic ticket cost $363 last year, including the $50 in taxes and fees, the study found.)

airline taxes

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  1. Can I decline the $10 security fee and head straight to the gate?

  2. “Source: the airlines.”

    Uh, ok.

  3. Turns out it’s just the U.S. government that keeps taxes for services not rendered.

    Isn’t that the definition of a government?

  4. talldave,
    Nice shot.

  5. Yeah, sure the refundable thing is an issue, but as someone who favors a fee-for service model for taxes (e.g like the gas excise tax), I don’t have a problem with the rate of taxation on airline fares. I’m not even sure the various fees (plus airline landing right fees) cover the cost for the various federal expeditures on aviation (ATC, airports, etc)

  6. The FAA spends about $14.9 billion a year.

    It receives about $11.4 billion in fees.

  7. I once had a flight within Europe that cost 59 euros. 9 euros for the ticket, 50 for the taxes.

  8. In Soviet Russia, taxes flight you!

  9. Mo –
    Ryan Air?

  10. GermanWings. I was living in Cologne at the time.

  11. GermanWings. I was living in Cologne at the time.

    While living in France, Ryan Air had extremely cheap flights, but the taxes were, as you say, the bulk of the ticket cost.

  12. Daniel Webster College has an aviation division?

  13. But they need the taxes because . . . errrrr . . . it’s for the children. Yeah, that’s the ticket.

  14. This doesn’t make sense.

    When I get cancel a nonrefundable ticket, I get a credit. This credit is for the full amount I paid.

    I then apply this credit toward a future flight, after paying a fee.

    I don’t see how taxes are treated any differently in this scenario from any other part of the cost of the ticket.

  15. It’s not at all appropriate for the chart above to include a “fuel surcharge” with the rest of the taxes and fees. The fuel surcharge is a gimmick created by airlines (there’s no reason why it shouldn’t be wrapped into the regular fare) and has no relationship to the government-imposed taxes and fees listed elsewhere.

    Since the fuel surcharge on the Lufthansa flight listed is more than twice all the other taxes and fees combined, this is a pretty big deal…

  16. For airlines, refunding the taxes and fees actually showcases to consumers what a large percentage of tickets those expenses are

    I’m thinking giving you all your money back except the taxes and fees would drive that point home rather effectively as well.

  17. I have said for years that we would have taxation revolt in this country in no time if we just changed the way they are collected. Leave all taxes in place at the current rates but make everyone write a seperate check for the tax on the items they buy. Have everyone write a check to the government everytime they get paid. I mean for EVERYTHING we should have to pay the tax portion seperate of the actual price.

    In no time we would have a major revolt when people finally realize just how much money they are handing over to the government that they never realized before when the government made it nice and easy for us all to pay by having it added directly into the total or automatically withheld before you even see your check.

    Honestly I think it would create the biggest uprising in over taxation we have ever seen in the past 100+ years.

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