WASHINGTON, March 20, 2019 – Airlines for America (A4A), the industry trade organization for the leading U.S. airlines, today urged Congress to reject the proposed tax hikes on travel that are included in the President’s FY2020 Budget which was publicly released recently.
The suggested tax hikes on travel would cost passengers an additional $2.9 billion annually on top of the $25 billion they already pay per year. These are unnecessary tax increases that jeopardize the unprecedented choice, access and affordability that consumers enjoy today. Increasing taxes in any form would burden families with higher costs to fly, curtail job growth and limit air service options to small and rural communities.
U.S. aviation and its customers already are subject to 17 federal aviation taxes and fees.
Specifically, the administration’s FY2020 budget request proposes $2.9 billion annually over 10 years in new and higher federal aviation taxes and fees on the traveling and shipping public, including:
Transportation Security Administration (TSA) Passenger Security Fee Increase. The budget proposes to increase the passenger security fee from $5.60 to $6.60 in FY2020 and from $6.60 to $8.25 starting in FY2021. This proposal will increase taxes an estimated $600 million in FY2020 and $22.4 billion between 2020 and 2029.
Customs User Fees. The Budget proposes to increase the customs inspection fee by $2.10 (to $7.75). The estimated tax increase on aviation passengers is $272 million in FY2020 and $3.2 billion over 10 years.
Immigration User Fees. The Budget proposes to increase the Immigration Inspection User Fee (IUF) from $7 to $9. The estimated tax increase on aviation passengers is $273 million in FY2020 and $3.2 billion over 10 years.
Agricultural Quarantine Inspection Fee (Department of Agriculture). The Budget proposes to establish a new discretionary user fee for the Animal and Plant Health Inspection Service (APHIS) Agricultural Quarantine Inspection (AQI) pre-departure program. The estimated tax on aviation passengers is $20 million in FY2020 and $212 million over 10 years.
A4A also called on Congress to end the practice of diverting security fee funds away from security to instead pay for deficit reduction. Since 2013, approximately $1.3 billion per year in TSA fees are being diverted away from their intended purpose, which is to pay for aviation security screening. Similar diversions have also been used for CBP fees. Instead of increasing taxes, there should be a focus on addressing the annual diversion of billions of dollars of security funds.