ACCORDING TO the airline industry, the cost of compliance with the 1985 federal noise standards will be $5 billion to $8 billion. The airlines, understandably, are worried about it. Given their other capital needs in the next decade and their unstable profits, they aren't sure they can raise all the money they will need. But that, it seems to us, is an insufficient reason for Congress to create a unique tax fund that would pay part of the bill.
The idea, now getting serious consideration on Capitol Hill, is that part of the money raised by the taxes on air tickets and cargo should be handed to the airlines to buy new, quieter engines for old airplanes. It is a nice idea - if you happen to own an airline. Ticket prices won't go up. The money you get from the treasury won't be taxable. And maybe as much as a quarter of the costs imposed by those new noise standards would be met painlessly. It is also a nice idea for the politicians who feel the pressure to help industry meet new federal standards; the subsidy will be almost hidden. Thus, the idea was endorsed along the way by both the Ford and Carter administrations, as well as the airline industry, and approved by a subcommittee of the House. There is even an indication that enactment into law of the proposal is the key to prying an airline deregulation bill out of the House. This is something the Carter administration fervently wants.
Nevertheless, the idea is a bad one. It would set a precedent for using federal taxes to raise money to help industry comply with federal laws. If a federal tax on airline tickets is to be used to help the airlines with their noise problem, why not one on utility bills to help the power companies with their smoke problems? Or one on gasoline to help automobile owners re-fit old cars to eliminate exhaust emissions? The possibilities are endless.
There are already enough well-established ways for government to help industries and individuals in need of special aid without creating a new one. If the airlines really must have the $1.25 billion this proposal would give them over the next five years, Congress can provide it through direct appropriations. That would be the straightforward way to do it. But since the central part of the proposal is a finding that the Airport Trust Fund doesn't need all the revenue raised by the 8 percent tax on tickets and the 5 percent tax on cargo, a better solution would be to reduce those taxes. The airlines could then raise their base fares by the same amount without increasing ticket prices. That would raise the same amount of money for paying the cost of quiet. The distribution of it among airlines wouldn't be the same, but that is the problem of individual airlines. It is a lesser problem than the one posed by creating a new mechanism for using federal taxes to help private industry.