Airlines Attempt To Reintroduce Tax Cut Scheme

They're still at it. The Air Transport Association, the lobbying organization representing the major airlines, attempted Wednesday to repackage and reintroduce for the second time their latest tax cut scheme as the House Ways and Means Committee’s Select Revenue Measures Subcommittee considered FAA reauthorization. The airlines unveiled their plan with less than 22 legislative days left before funding for FAA expires.

“What we saw today was just more of the same from the big, commercial airlines,” said Selena Shilad, Executive Director of the Alliance Aviation Across America -- a group of general aviation interests working to stave off user fees for small aircraft pilots. “This proposal was unpopular when it was first introduced, and no amount of repackaging changes the fact that it amounts to nothing more than a thinly veiled attempt to get yet another huge tax cut.”

The Alliance says ATA’s proposal was originally presented in the US Senate Finance Committee’s Subcommittee on Energy, Natural Resources and Infrastructure hearing by a representative of one of the major commercial airlines on July 24. The plan would radically overhaul the current funding structure in favor of a new ticket tax formula that would provide a huge tax break for the airlines.

Specifically, the airlines’ plan would implement a new departure tax for airline passengers, and a new tax structure for ticket taxes that is based on the number of miles flown on a trip. An exception is built into the proposal for flights of less than 250 miles... which would include some of the airlines’ most profitable and congested routes.

In fact, 25% of the top 12 busiest routes in the country would be tax exempt under the airlines’ proposal, according to the Alliance -- creating a significant loss of revenue for air traffic modernization.

ATA President James May maintains the provision would help small communities... but the Alliance says it's clear no one but the airlines would benefit from this exemption. That assertion is backed by the Government Accountability Office (GAO), which has testified to Congress, when the airlines receive a tax break, savings are never passed onto airline customers.

In fact, as the last two GAO studies have concluded, when the commercial airlines have received tax breaks in the past, the airlines have kept their fares the same or raised them.

The Alliance and leading charitable organizations, general aviation groups, and businesses around the country have supported HR 2881, which was recently passed out of the House Transportation and Infrastructure Committee, and represents a common sense approach to FAA reauthorization that would dramatically increase modernization funding, while retaining the current, simple, easy to use excise tax system.

The sponsors of HR 2881 from the Transportation and Infrastructure Committee testified today before the Ways and Means Committee against overhauling the current, efficient fuel tax system in favor of user fees.

By contrast, S. 1300 -- which recently passed out of the Senate Commerce Committee -- would create a new “user fee” tax. Also proposed was an elimination the $.043 per gallon fuel tax airlines currently pay, while general aviation would be faced with a more than doubling of the fuel tax.

The Alliance says that means commercial airlines would net out with a huge tax giveaway... directly shouldered by general aviation.

FMI: www.aviationacrossamerica.org