Government Relations

Chapter Government Relations:

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Beware the backdoor tax on passengers


It should therefore come as little surprise that Maine’s senior senator, Susan Collins, recently exercised her power as an appropriator to advance what amounts to a tax hike: one that will, if enacted, raise the cost of flying for millions of travelers in every corner of the country. The proposed language would nearly double the maximum federal Passenger Facility Charge (PFC) – one of the many government mandated taxes you pay when you purchase a plane ticket – from $4.50 to $8.50. 

This is a bread and butter issue for most Americans, one that adds up quickly even with restrictions on how many parts of trip are subject to PFCs. If this scheme becomes law, it will mean that an average family of four could shell out $104 in combined PFCs on the round-trip tickets they purchase. And that’s just one of the 17 taxes the government collects on commercial aviation tickets. Increase this burden, and the whole aviation ecosystem – including, ironically, airports – will suffer because price-sensitive consumers will choose to stay home or find a substitute mode of transportation.

The PFC tax goes to fund airport improvement projects. Everyone agrees that airports constitute vital national infrastructure and that it’s in everyone’s interest to have terminals and runways that are not only safe but run efficiently. 

But that’s not the whole story. Those backing this obscure provision fail to mention that airports are already sitting on a great deal of money. In fact, they have nearly $6 billion in unused reserve funds in the FAA’s trust fund (the highest level in two decades) and another $14.2 billion in unrestricted cash and investments. Further, this doesn’t count all the money airports bring in on things like parking fees, concessions and local tax revenue.