Gov't wants to know all the fees airlines charging

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  1. uggboy
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    uggboy Gold Member

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    Gov't wants to know all the fees airlines charging

    http://hosted.ap.org/dynamic/stories/U/US_AIRLINES_FEES?SITE=DCTMS&SECTION=HOME&TEMPLATE=DEFAULT

    WASHINGTON (AP) -- Airlines would have to report the fees they charge passengers and give more useful statistics about lost or damaged luggage and mishandled wheelchairs, under a Transportation Department rule proposed Friday.
    Making airlines report more information about the amount and types of fees will make the total cost of flights more clear, Transportation Secretary Ray LaHood said.
    "In an era of rising fees, passengers deserve better information about how airlines are performing," he said in a statement.
    Airlines received $3.4 billion from baggage fees and $2.3 billion from reservation change fees in 2010. There is no federal excise tax on those fees, although they are counted when calculating income taxes.
     
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  2. NYBanker
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    NYBanker Gold Member

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    This has been a source of debate for some time. Certain transactional taxes are calculated based on the value of airfare purchased.

    What consumers have said (through their actions) is that most want to pay a la carte, not get an all-inclusive price. As a result, pax are paying for the different services in components...much of which escapes the transactional (excise) tax on airfare.

    Different members of Congress have bantered about putting a tax on the baggage fees...but I think popular sentiment has won out...baggage fees are unpopular as it is...if the government were to charge an add-on tax on something already very unpopular...I can see the campaign against that Member of Congress who proposed the bill (and those who voted for it) in the next election shaping up very clearly.

    In Australia, when the government added a GST, they demanded that merchants include it in the price of the goods. If a shirt is $100 on the rack, that's the price you pay. In reality, the merchant is keeping X% and remitting Y% to the government...but the average taxpayer/voter never sees the amount. IRS meets PR.

    Sort of like adding medicare tax to capital gains. Most people don't even know what that means...but because it's not changing a tax rate, somehow, that phantom tax increase can sneak through... :(
     
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