The ATA and User Fees
August 17, 2007
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  • The Air Transport Association, the lobbying organization representing the major airlines, today attempted to repackage and reintroduce for the second time their latest tax cut scheme as the House Ways and Means Committee’s Select Revenue Measures Subcommittee considered FAA reauthorization. The airlines unveiled their plan with less than 22 legislative days left before funding for FAA expires.

    ATA’s proposal was originally presented in the U.S. Senate Finance Committee’s Subcommittee on Energy, Natural Resources and Infrastructure hearing by a representative of one of the major commercial airlines on July 24th. The plan would radically overhaul the current funding structure in favor of a new ticket tax formula that would provide a huge tax break for the airlines. Specifically, the airlines’ plan would implement a new departure tax for airline passengers, and a new tax structure for ticket taxes that is based on the number of miles flown on a trip. The most egregious provision in the plan is the exception built into the proposal for flights of less than 250 miles, which would include some of the airlines’ most profitable and congested routes. In fact, 25% of the top 12 busiest routes in the country would be tax exempt under the airlines’ proposal, creating a significant loss of revenue for air traffic modernization.

    James May, President of the ATA, again disingenuously justified this exemption today by saying it would help small communities. Not only is it clear that no one but the airlines would benefit from this exemption, but as the Government Accountability Office (GAO) has testified to Congress, when the airlines receive a tax break, savings are never passed onto airline customers. In fact, as the last two GAO studies have concluded, when the commercial airlines have received tax breaks in the past, the airlines have kept their fares the same or raised them.

    We at The Alliance For Aviation Across America (AAAA) and leading charitable organizations, general aviation groups, and businesses around the country have supported HR 2881, which was recently passed out of the House Transportation and Infrastructure Committee, and represents a common sense approach to FAA reauthorization that would dramatically increase modernization funding, while retaining the current, simple, easy to use excise tax system. The sponsors of HR 2881 from the Transportation and Infrastructure Committee testified today before the Ways and Means Committee against overhauling the current, efficient fuel tax system in favor of user fees.

    By contrast, S. 1300, which recently passed out of the Senate Commerce Committee, would create a new and onerous “user fee” tax. Also proposed was an elimination the $.043 per gallon fuel tax the big airlines currently pay, while general aviation would be faced with a more than doubling of the fuel tax Ð meaning that the commercial airlines would net out with a huge tax giveaway that is directly shouldered by general aviation.

    We recently reached over 3,400 members, including aviation professionals, local airports, rural and agriculture groups, city, county and state officials, and small and mid-size businesses dedicated to protecting small and rural communities by fighting against any overhaul of the current, fuel tax system in favor of new taxes and fees. Members of the Alliance for Aviation Across America include: the Aircraft Owners and Pilots Association, whose membership is comprised of 412,000 members nationwide, the National Business Aviation Association, whose membership includes 8,000 members, the National Farmers Union, the League of Rural Voters, the National Association of State Aviation Officials, the National Grange, the Small Business and Entrepreneurship Council, the American Corn Growers Association, the Independent Cattlemen of Texas, the Texas Farm Bureau, Air Care Alliance, the National Agricultural Aviation Association, Helicopter Association International, and over 1,200 small and medium-size businesses, charitable organizations, and groups and associations from across the nation.