Today, the aviation industry leads all others in America with 17 unique taxes and fees from the federal government. Airlines for America estimates that on a $300 ticket for a typical domestic round-trip itinerary, taxes amount to $61 or 20% of the total ticket price. The federal tax rates paid by airlines are higher than federal sin taxes paid on alcohol, tobacco, and firearms, which were originally intended to discourage use. Federal aviation tax policy functions the same way and discourages flying, ultimately impeding the industry’s ability to grow and expand the U.S. economy.
As taxes increase, airlines will either lose revenue or attempt to pass along the cost to consumers in the form of higher fares. However in a pricing environment that is highly volatile and subject to competitive response and public outcry, this is often not possible. Given the record losses airlines have experienced, high taxes are only making the industry weaker and directly impacting employment and the careers of professional pilots and other airline employees. In short, higher airline taxes = less airline pilot jobs.
To help level the playing field for U.S. airlines and their employees, the current structure of the industry’s taxes and fees needs to be reviewed and reformed to help make the industry financially sound and competitive in the international marketplace. Policymakers should strive to reform our aviation tax policy with a goal of leveling the playing field and increasing U.S. international competitiveness and advancing U.S. leadership in aviation safety.