Another corporate hijacking

by | Feb 11, 2015 | Editor's Blog, Tax Reform | 11 comments

So the airlines industry is calling on the legislature to exempt them from paying sales tax on fuel. They say that gas is their largest expense and if we don’t give them an exemption, we’ll be at a disadvantage competing with states that don’t tax gas.

Well, call their bluff. Gas prices are at their lowest in years and the airline industry, as much as anyone in country, is benefitting. They’re making record profits but they aren’t making traveling any easier on the rest of us.

Remember when gas prices went up? The airline industry insisted that it had to start charging for luggage in order to stay profitable. They also decided we all had too much leg room so they stuck in additional rows of seats to fit in more passengers.

Now that gas prices have dropped, why don’t they rescind those baggage fees? Better yet, why doesn’t the legislature make that part of any deal involving a gas tax exemption? If they are going to take as much $10 million out North Carolina coffers, passengers from North Carolina should get something in return.

As for staying competitive with other states, I don’t buy it. If business people need to get to Charlotte, they are flying into Charlotte, not Columbia. And if people need to get to Raleigh, they aren’t flying into Richmond and driving 2.5 hours. And I don’t believe that South Carolina or the airline industry is going spend the money to build a world class airport in Rock Hill just to get better gas deals.

If the legislature bows to the wishes of the airline industry, they’re showing their true colors. They’ll cut taxes for a highly profitable industry that treats its customers poorly but they won’t reinstate the earned income tax for the working poor. It would be just another example of the hypocritical free-marketeers picking winners and losers. And, yet again, we’ll be the losers.

photo credit: <a href=”http://www.flickr.com/photos/57778372@N04/9478049285″>D-AIDV</a> via <a href=”http://photopin.com”>photopin</a> <a href=”https://creativecommons.org/licenses/by/2.0/”>(license)</a>

11 Comments

  1. Fran Syptak

    As the wife of a former employee of American Airlines, that as you remember, recently emerged from bankruptcy, I agree with David Moore and John Eyles. Remember, airline investment is based on the futures market of jet fuel, therefore Airlines must prepare to fly at a loss for unknown periods of time. They rely on the airports to set the tax rate for landing rights and services. As you know, the problem of who owns the Charlotte Douglas Airport has become a political issue that few customers understand or care about. We’ll pay taxes for a welcoming, efficiently run Airport, and we’ll demand that the Airlines do the same.

  2. John Eyles

    “NO correlation to automobile gas prices and jet fuel.” ?!? Yeah, I guess that’s because one is made from crude oil and the other from cubic zirconium.

  3. Aleycat

    Seems we have a few vested interests of the airline industry here. Thanks to the Civitas hit list of main threats to implementation of total free-market control, which is to privatize the gains, socialize losses. Plus, it’s payback time for the last election.

    Thomas, you must be doing something right!

  4. David Moore

    There was mention of a separate issue regarding carry-on baggage. Any given day you can watch thousands of others take advantage and press the boundaries of carry on items.
    It is the #1 source of security violations and risk associated to public air travel, and as such, needs tighter regulations and restrictions Industry wide.
    As for baggage fees, why should anyone get free cargo shipping?

  5. David Moore

    You are totally out of your depth speaking on the matter of aircraft fuel.
    1st, there is NO correlation to automobile gas prices and jet fuel.
    2nd, aircraft can fuel at any of their landing locations and may avoid a higher state altogether, that includes other services as well, which translates to jobs lost. Including consideration for any aircraft manufacturers that would be considering the state.
    Under NO circumstances should North Carolina seek to apply a tax on jet fuel if they want to participate in the aviation industry.
    Moore Aerospace Service & Consulting

  6. Morris Is A Flack

    Sure sounds like someone spouting off talking points. And IIRC never seen him here before. Other sites would call that not being a trusted user.

    • TY Thompson

      Seems to me Morris’ point passes the logic test. After all, if those Corporate types are the villains that they’re made out to be, would they actually pay taxes WITHOUT baking it into their product price and passing it onto the consumer? Then there are those of us who have airline stocks in our Roth IRAs and DO expect as much profit as the market will bear. So in a way, I guess both sides of this issue are right because I do have a reason to shill for the airlines, both as a taxpayer and as a future retiree.

  7. Fred Walker

    Another reason to call for the repeal of the 16th Amendment and reinstate the original Constitutions requirement for equal taxation! http://www.conventionofstates.com

  8. Morris

    The problem here is that the airlines don’t pay the fuel taxes, their customers (us) pay them. Over time we’ll pay higher ticket prices for flights that have fuel purchased with higher taxes. Ticket costs are a factor of fuel costs, labor costs, maintenance costs, etc and yes profit. After all shareholders don’t ,make the huge investments they do in an airline business without a return on that investment.
    I’ve logged well over a million miles in commercial air travel both here and internationally, and I could share travel horror stories all day. But overall I give the airlines a pretty good grade for service and safety. They always get me where I’m going in one piece and usually close to on time. Remarkable industry actually.
    It’s always easy to slam the “corporations” for taxes because the average citizen never realizes they are paying the tax at the end of the day. Just gets added to their price.

    • Thomas Mills

      Gotta say, Morris, you sure sound like you are shilling for the airlines industry. Do you have any ties the industry or PR firms representing them? If not, your experience with the airlines is different than almost anyone I know.

    • larry

      So customers pay the tax via ticket sales. Gotit. So if the legislature dumps the said tax will that come back to customers in lower ticket prices? And just wondering the …the $10 million loss from State tax receipts will come from what source or made up from what source? Less school supplies? Higher sales tax at Kroger? Just wonderin.

Related Posts

GET UPDATES

Get the latest posts from PoliticsNC delivered right to your inbox!

You have Successfully Subscribed!