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Top Tax Groups Say “No” to PFC Increases

Two of the largest national groups representing the interests of American taxpayers have renewed their long-standing opposition to increasing or uncapping the Passenger Facility Charge (PFC) or airport tax.

Grover Norquist, president of Americans for Tax Reform (ATR), and Pete Sepp, president of the National Taxpayers Union, both penned letters this week urging elected officials not to increase the already exorbitant level of federal taxes and fees on air travel.

In his letter, Mr. Norquist explains that “uncapping and increasing the PFC, represent[s] an unnecessary and unfair burden to airline passengers.” Mr. Sepp called the net government tax and fee burden on air travel “already incredibly onerous,” and made it clear that raising that burden “should not be among the policy options for the Commerce Committee or any other entities in the House or Senate to consider.”

The bottom line is that federal taxes and fees on air travel are out of control. As Mr. Norquist wrote, “Government taxes and fees already overburden air passengers – taxes make up over 20 percent of the cost of an average domestic flight.”

When taxes are already at more than 20 percent, the last thing Congress should be considering is raising that burden. Mr. Sepp said it perfectly in his letter, “the typical middle class air traveler now pays a far higher average tax rate on an airline ticket (21 percent) than he or she does on a 1040 income tax return. Congress should be working to remedy, rather than worsen this situation.”

If you’re having some trouble following the logic behind asking Congress to raise taxes when people are already paying more than 20 percent, you’re not alone. We’re right there with you. The argument for increasing the airport tax only gets worse when you look at the numbers.

Mr. Sepp explains that “FAA data shows that overall PFC collections have still managed to climb 94.9 percent between 2000 and 2015. This trend is almost twice as fast as the increase in the Consumer Price Index for All Urban Consumers.”

In simpler terms, Mr. Norquist captures the absurdity of any argument in favor of a higher PFC: “In 2015, PFC collections hit a record $3 billion and 2016 PFC revenue is projected to be even higher.”

That $3 billion was part of a record high $27 billion of revenue collected by airports in 2015, including $10.7 billion from airline rents and fees and $9.1 billion from non-airline revenue such as rental cars, retail and food and beverage sales, all record highs.

What this really boils down to is that airports say they need more money, in the form of a tax increase on passengers, to fund infrastructure improvement projects, but that simply isn’t true. “It is entirely possible for airports to continue making such improvements without increasing the cost of flying,” wrote Mr. Norquist, and he’s right. Almost $1 billion per year in airport revenues are being diverted away from airport projects. Before calling for an increase in the PFC, the airports should make better use of the tools they’ve already got in their toolbox.

For more information about pushing back against the airport tax, visit stopairtaxnow.com and be sure to send a letter to your elected officials telling them not to increase the PFC.

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