Apparently, Congress can’t get its act together on certain FAA related legislation that if not passed by midnight tonight, will result in a portion of the FAA being temporary shutdown as well as 4,000 jobs. If this happens, airlines will no longer have the authority to tax passengers. That vacation ticket you’ve had your eye on might have just gotten a whole lot cheaper.
How much is the potential savings?
Those planning a trip soon or even during the holiday season may want to pay attention to the news over the next 24 hours. Every plane ticket begins with a 7.5% excise tax collected by the airlines and passed along to the IRS. There are also certain additional taxes based on the departure or arrival city. In total, taxes can add up to the 15 to 20% range. This means that you won’t be on the hook for $37.50 to $100 in taxes for a plane ticket that normal costs $500 before tax is calculated. Keep in mind though that airline and airport specific fees (not taxes) will still be included in your ticket.
Why is this happening?
You guessed it folks — Unions. There is a provision being sought by the House of Representatives and the airline industry trying to make it more difficult for workers to unionize. In addition, the House of Representatives also would like to reduce the number of government subsidies provided to certain airports. Because no agreement has been reached on the long-term FAA funding bill, portions of the FAA will lose their authority at midnight, if no agreement is reached.
Do I have to worry now about airline safety?
Although 4,000 jobs is a lot, they don’t relate to the important safety functions like air traffic controllers and the actual airlines. For now, safety for air travel won’t be affected.
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