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Thursday, July 15, 2010

Hidden taxes in your daily life: Air travel 


Continental Airlines breaks out the taxes from the actual fare in the little confirming email that they send. I booked a flight (coach, naturellement) to Europe a month or so from now, and CO reported that we would pay some serious taxes along the way, 39% of the fare:


Air Taxes


If you had asked me to guess what the direct taxes were on air travel without looking, I might have thought 20%, still well above the typical sales tax on retail transactions, but not anything so high as 39%. Now, it costs a lot to run the air traffic system and the airports, so I do not even know whether these taxes are reasonable or abusive. I am, however, quite certain of this: If the government tried to levy a visible 39% tax on typical retail transactions the citizenry would rise with a great fury. Less visible taxes, including valued-added taxes, tend to trigger less intense and more diffuse reactions. Look for our elected officials to impose as many of these as they possibly can.


6 Comments:

By Blogger David, at Thu Jul 15, 04:21:00 PM:

I'd like to see how much of the taxes are things like fees for airport services or ATC services. Especially on international flights where you pay a fee to every ATC service on the way. Now fees can be abused as any driver knows when auto taxes are used to fund mass transit or just public employee unions.  

By Anonymous Anonymous, at Thu Jul 15, 04:33:00 PM:

I think most of these fees/taxes are in Europe. You might want to cross-check against recent domestic travel. My domestic fees/taxes usually run about 15% of the fare.  

By Anonymous tyree, at Fri Jul 16, 12:42:00 AM:

Some service stations in California used to list the applicable taxes on each gallon. I can't seem to find anything about it but I think the politicians made that illegal. In any case, I haven't seen the tax burden on motor fuel posted in years.  

By Anonymous E Hines, at Fri Jul 16, 08:24:00 AM:

As others have alluded, since this is a flight to Europe, it'd be interesting to see a breakout of the taxes paid to European jurisdictions, either directly or through tax treaties.

I'd also like to see what got paid for fuel taxes (and to what jurisdictions).

Since we're breaking out costs, I'd also like to see (although these data likely are proprietary, so we're unlikely to see them) the fare allocated to labor costs, to management costs, and to overhead.

This is a cool first step, though, and I wish the other airlines did this.

Eric Hines  

By Blogger Stephen, at Sun Jul 18, 08:16:00 PM:

Like the taxes on gasoline.  

By Anonymous Andrew C, at Thu Jul 22, 08:48:00 AM:

I don't know the actual fees, but flying in Europe can be expensive because they charge fees for all aspects (landing, atc, etc). Many student pilots find it cheaper to come to the US, live here, and get their license, than to do it in their home country due to fees (and fuel taxes).  

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