Obama Administrating Proposes Tax Increase Of $14 Per Flight

The airline industry trade organization Airlines for America (A4A) says that a proposal by the Obama administration to hike taxes on airline travel by $14 will be detrimental to the economy, with the greatest impact on the middle class.

The administration says it has proposed the tax hike in an effort to reduce the deficit and help pay for airport improvements, along with allowing for the hiring of thousands of new customs and immigration officers. But A4A president and CEO Nicholas Calio says that the proposed taxes will only drive up the cost of flying, or have the effect of limiting air service to smaller communities across the country. "Our fragile economy and the millions of middle-class Americans who rely on air travel and shipping every day simply cannot afford tax increases," he said, according to a report in the Los Angeles Times.

U.S. Bureau of Transportation Statistics data indicates that airfares rose an average of three percent from 2011 to 2012, with the average ticket price climbing from $364 to $375. But the airline industry says that while fare increases translate to things like better services for passengers and newer airplanes, tax increases do nothing for their customers.

A4A spokeswoman Katie Cornell told the paper that the profit margin for most airlines is about 37 cents per passenger.

FMI: www.airlines.org