Airlines’ trickle-up economics
Release the doves! It’s a tax-free holiday for travelers! Oh wait. Can someone go collect those birds? The celebration has been called off, due to the party-crashing airlines.
As the now familiar story goes: Congress’s failure to reauthorize the Federal Aviation Administration’s funding has prevented the department from collecting the federal tax on airfares — about 10-15 percent of the ticket price. (The lack of funding has other repercussions as well, such as staff layoffs and a freeze on plans to modernize the air traffic control system.) You’d think, wouldn’t ya, that the carriers would pass along the savings to consumers. Well, you thought wrong.
A few airlines, such as Virgin America, played nice, keeping prices at the no-tax rate. But that generous gesture didn’t last long. The carriers have raised fares, banking millions of dollars that previously went into government coffers.
“It goes contrary to all other tax holidays,” said George Hobica, president of Airfarewatchdog.com, using New York’s no-sales-tax holiday as an example. “It seems like the airlines are being predatory.”
One unexpected carrier has risen above the scheming fray: Spirit Airlines. For a limited time, it offered a 7.5 percent discount on round-trip flights. (Unfortunately, the deal expired on Thursday.) The company is also encouraging a spirited debate about travel-related taxation, establishing the Web site DontTaxMeBro.org,
“Spirit calls on airline customers, governmental leaders, policy makers, taxi drivers, hotel operators, cruise line personnel, restaurant employees, travel agents, tour operators, and others who would be directly harmed by an increased tax burden on travelers to join us in our efforts to keep airline user taxes low,” reads the Web site’s rallying cry.
Release the voices!
City hall wants you to travel. Especially Chicago’s city hall.
The Global Business Travel Association has studied the travel-related taxes in the country’s top 50 cities, ranking those with the lowest and highest taxes on such items as rental cars and hotels.
The group determined that, on average, discriminatory travel taxes bump tourist expenses by 56 percent over the general sales tax. The money often feeds local projects, not tourism services.
If you want to avoid the hit, visit a city with the lowest tax burden (general sales tax and discriminatory travel taxes): Fort Lauderdale, Fort Myers or West Palm Beach in Florida; Detroit; or Portland, Ore. Or opt for an urban center with the lowest discriminatory travel tax rates, all in California: Orange County, San Diego, San Jose, Burbank and Ontario.
But, if you prefer to leave a souvenir in the coffers, open your wallet for the high-tax cities of Chicago, New York, Seattle, Boston and Kansas City, Mo. And here’s one for Trivial Pursuit: Portland also ranks No. 1 in discriminatory taxes, because Oregon doesn’t impose a sales tax.
Due to ongoing ripples in the Middle East, Crystal Cruises has canceled a pair of 2012 trips: the 12-night Ancient World Wonders, which departs from Barcelona on Dec. 9, and the 14-night Holiday in the Holy Land, which leaves Piraeus, Greece, on Dec. 21. . . . . It’s never too early to think snow: Book a Jackson Hole ski pass in August and save some cold hard cash. For example, the Grand Pass costs $1,195 when booked Monday through Aug. 31 ( the regular price tag is $1,595). The Peak Pass (weekend, 15-day and 10-day) and college six-day pack are also discounted when booked in August. Info: www.jacksonhole.com. . . . The Jamaica Tourist Board has announced the new Falmouth Heritage Walking tour, offered on cruise ship port days and by reservation. The cost is $25, and $18 for children. Info: falmouthheritagewalks.com.