- Days left

Obama's new budget means airfares will be going up

One little-noted aspect of Obama's budget is that it calls for an as-yet-unspecified increase in government fees for commercial airline tickets starting in 2012.

The administration says that right now, only 36% of security costs are being covered by that $2.50-per-flight surcharge that Bush put into place in 2002; last year, that fee brought in $2 billion toward defraying the operation of the Transportation Security Administration. The rest is coming from other government sources, which means they're coming from other tax sources.

The Obama team hasn't yet specified how much they want to raise the fee, but assuming that $2.50 is 36% of the cost of security, if they plan to raise enough cash to cover 100%, we'll be paying close to $10 per flight.


Obama's critics may have a tough time justifying the fight against this one on philosophical grounds, and here's why: If flight fees go up, his budget can be attacked as yet another tax-like increase. Yet if he doesn't increase it and the money for the TSA are taken from the general national funds, then Obama can be accused of enabling government bloat. So he can't win.

Although Obama will have to shoulder the vilification as a rampant taxer, this quandary is nothing new. Bush tried to place $5 in fees on each flight but was shot down by Congress. Back then, the Director of Transportation said $8 per segment would be required to pay for security, meaning a round-trip journey with one stop would cost another $32 per ticket. Now, Obama is using the new budget as an opportunity to complete Bush's unfinished business. (You won't see that sentence in print very much.)

Choose your poison: Fees or taxes? When you fly, are you willing to pay more fees for the costs of your safety, and if so, are you satisfied with the possibility that higher ticket prices could have negative repercussions on the health of our air transit industry? Or are you happy with the funds for your air security mostly being pulled from the taxes you pay during the rest of your life, and if so, is it all right that people who don't fly have to pay the costs for those who do? Either way, the money's got to come from somewhere.

I have to add another question to the mix: Who's watching the TSA and making sure that it's spending its money as wisely as it could? The bureaucratic agency has already gotten in legal trouble for incorrectly billing airlines for the true costs of securing them.

Another option, of course, is not paying for security at all. But very few of us think that's a good idea -- which may be proof that this is an issue of national concern that might be better funded through the tax base. Something tells me the people who wouldn't want any security aren't ones who travel far outside their backwoods compounds.

Increase your money and finance knowledge from home

Introduction to Preferred Shares

Learn the difference between preferred and common shares.

View Course »

Basics Of The Stock Market

Stock Market 101 - everything you need to know but were afraid to ask!

View Course »

TurboTax Articles

What is IRS Form 8824: Like-Kind Exchange

Ordinarily, when you sell something for more than what you paid to get it, you have a capital gain; when you sell it for less than what you paid, you have a capital loss. Both can affect your taxes. But if you immediately buy a similar property to replace the one you sold, the tax code calls that a "like-kind exchange," and it lets you delay some or all of the tax effects. The Internal Revenue Service (IRS) uses Form 8824 for like-kind exchanges.

What are ABLE Accounts? Tax Benefits Explained

Achieving a Better Life Experience (ABLE) accounts allow the families of disabled young people to set aside money for their care in a way that earns special tax benefits. ABLE accounts work much like the so-called 529 accounts that families can use to save money for education; in fact, an ABLE account is really a special kind of 529.

What is IRS Form 8829: Expenses for Business Use of Your Home

One of the many benefits of working at home is that you can deduct legitimate expenses from your taxes. The downside is that since home office tax deductions are so easily abused, the Internal Revenue Service (IRS) tends to scrutinize them more closely than other parts of your tax return. However, if you are able to substantiate your home office deductions, you shouldn't be afraid to claim them. IRS Form 8829 helps you determine what you can and cannot claim.

What is IRS Form 8859: Carryforward of D.C. First-Time Homebuyer Credit

Form 8859 is a tax form that will never be used by the majority of taxpayers. However, if you live in the District of Columbia (D.C.), it could be the key to saving thousands of dollars on your taxes. While many first-time home purchasers in D.C. are entitled to a federal tax credit, Form 8859 calculates the amount of carry-forward credit you can use in future years, not the amount of your initial tax credit.

What is IRS Form 8379: Injured Spouse Allocation

The Internal Revenue Service (IRS) has the power to seize income tax refunds when a taxpayer owes certain debts, such as unpaid taxes or overdue child support. Sometimes, a married couple's joint tax refund will be seized because of a debt for which only one spouse is responsible. When that happens, the other spouse is said to be "injured" and can file Form 8379 to get at least some of the refund.

Add a Comment

*0 / 3000 Character Maximum