Congress is in the process of considering a Federal Aviation Administration (FAA) bill authored by House Transportation Committee Chairman Bill Schuster (R-Pa.). The bill moves funding in a better direction, yet it could have been so much more. There still is an opportunity to make improvements to the bill that will satisfy two important concerns that the bill should both reform aviation taxes and devolve the funding for airports from the federal government to localities.
It is encouraging to see that user fees are being actively discussed in transportation funding. Conservatives believe that funding streams that don’t run through a giant Washington D.C. bureaucracy are more efficient. Ronald Reagan would have loved to see a bill that shifted power back to the states, local governments and local airport authorities. The problem is that user fees should be for all aspects of funding the programs in the bill, not just the programs that the influential airlines want.
Some have used the term “transformational” and “overhaul” to describe this bill, yet it is more accurately described as tinkering around the edges and incremental change. What would be transformational would be for this bill to eliminate or radically cut aviation taxes, abolish the anti-head tax and devolve many of these programs to the airports.
A free-market and pro-consumer bill would contain tax cuts and reform for air travelers.
First, the myriad of aviation taxes needs to be reformed. Consumers who travel domestically pay a domestic passenger ticket tax, a domestic flight segment tax, and security fees. These are the funding mechanism for the Airport and Airway Trust Fund. The taxes are too high and the inefficient means by which the funds are transferred to individual airports. Cutting or eliminating many of these taxes should be a goal.
Second, Congress should consider repeal of the Anti-Head Tax Act or lift caps on the Passenger Facility Charge (PFC) as a way to allow the airports to fund them locally. Right now, your typical passenger spends about $63 in taxes and fees for a $300 ticket. That is too much.
Finally, Congress needs to recognize that our airports are run down. Donald TrumpDonald TrumpTrump: Chinese president ‘likes me a lot’ GOP senator: There will never be full U.S.-Mexico border wall Bottom Line MORE called LaGuardia Airport a “third world” dump. The American Society of Civil Engineers has given domestic airports low grades. Members of Congress who travel through many of these airports readily recognize that the current system of local airport maintenance is broken.
Congress has an opportunity to get this right. Whether it is in the context of an FAA funding bill or comprehensive tax reform, the problem needs to be addressed and solved.
The current bill, the Aviation Innovation, Reform, and Reauthorization (AIRR) Act extends funding until 2022. If this bill passes with minimal reform, it will have proven to be a missed opportunity and will take pressure off Congress to fix the problem for another half-dozen years.
The House Freedom Caucus and Republican Study Committee members have an opportunity to use this debate to reform aviation taxes when this bill reaches the House floor. The House Transportation and Infrastructure Committee has marked up the bill and, unfortunately, committee members failed to amend the bill in the direction of transformational aviation tax reform. Because this bill contains tax provisions, the Senate will wait for the House to act.
When the Senate does receive a bill, members of the conservative Senate Steering Committee, chaired by Sen. Mike LeeMike LeeTrump should work with Congress to block regulations on prepaid cards Sweeping change at DOJ under Sessions Executive orders alone can't create sustainable deregulatory change MORE (R-Utah), have an opportunity to use this bill to conduct a proxy war on tax reform. The American people are right now expressing a strong desire for change with the strong performances of anti-establishment candidates running for president. Bold legislation reforming aviation taxes would be well received by the anti-establishment voting public.
More aggressive reform will garner the support of voters who frequently find themselves in run-down airports and getting stuck with expensive tickets thanks to the alphabet soup of fees that hike the cost of travel.
Langer is president of the Institute for Liberty, a conservative public policy advocacy.