WASHINGTON -- Fifteen leading airline, business and labor groups today urged Congress to reject a federal budget proposal that would double aviation security taxes, costing travelers and U.S. carriers $1.5 billion.
Groups opposing the new security tax include the AFL-CIO's Transportation Trades Department, Air Line Pilots Association, Air Transport Association, Air Travelers Association, Americans for Tax Reform, Cargo Airline Association, Competitive Enterprise Institute, Gerchick-Murphy Associates, Interactive Travel Services Association, J. Dunham and Associates, National Business Travel Association, National Taxpayers Union, Regional Airline Association, Travel Business Roundtable, and Travel Industry Association of America.
What's Wrong With The Airline Security Tax?
The groups assert the new security tax will kill jobs, economic growth and jeopardize local air service to small- and medium-size communities. Group leaders also argue that the federal government is breaking its 9/11 promise to pay for aviation security as a matter of national defense. U.S. airlines and travelers already will contribute $15.8 billion through 14 different federal taxes and user fees in 2005. The total tax burden represents 26 percent of a typical $200 roundtrip ticket, up from 7 percent 20 years ago.
Of the $15.8 billion in total federal taxes and fees, U.S. travelers and airlines pay more than $3.2 billion in aviation security taxes. The new $1.5 billion security tax proposal, which raises the 9/11 security fee for air travelers from $2.50 to $5.50, would increase total security tax burden to $4.7 billion. This is the same amount airlines would spend to employ about 60,000 people or put in place 360,000 flights to U.S. communities. U.S. carriers are estimated to have lost $10 billion in 2004.
In a press briefing, ATA predicted airlines will lose $5 billion in 2005. The new tax increase will raise those losses to $6.5 billion, because airlines can't pass along these new taxes due to competition. In the last three years, U.S. airlines have lost $33 billion, laid-off 123,000 employees, about one in five airline jobs, and shaved $12 billion in operating costs. The groups assert the airline industry can't absorb any new tax or fee increase without substantial job losses and less airline service.
Groups Speak Out Against New Airline Security Taxes
"We believe this $1.5 billion tax proposal will put another 19,000 airline jobs at risk and jeopardize up to 115,000 flights to small- and medium-size communities," said James C. May, president and CEO, Air Transport Association, who also released a letter today to the secretaries of Commerce, Treasury, and two top economic advisors with the Bush Administration, protesting the new tax increase. "It's vitally important that efforts to improve our national security do not undermine our economic security in the process. And to be blunt, that is exactly what is happening now."
"Sometimes, policy makers in Washington talk about jobs as though they are just statistics -- but there are a lot people in DC who fail to recognize there are 123,000 airline people who are out of work. That's 123,000 families up late worrying about the future; 123,000 mortgage and rent payments that out-of-work or under-employed families struggle to make and hundreds of thousands of kids who wonder why Mom and Dad are so worried," May added.