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Federal Government’s Continued Medling in the Private Sector Will Make It Impossible For US Industry to Recover


The oppressiveness of our federal government continues to constrain any real recovery in our economy and until we can get them off the private sectors back, economic stagnation will continue in the US making us more and more non-competitive in both our own markets and overseas markets.

Take the example that I am pointing out in only a single industry and multiply the same kind of behavior across many industries including the power sector, the energy sector, and others.  It is no wonder we can’t snap out of this recession that we find ourselves in today.

The airline industry in the US is a significant “driver” of our economic engine.  Yet our federal government continues to use the industry and their investors as a piggy bank to fund their outrageous, undisciplined, and out of control spending.   The airlines today and we the passengers currently pay 17 different federal aviation taxes and fees which totaled last year $16.5 billion.  Federal taxes have increased from 7 percent of the price of a ticket in 1972 to 20 percent in 2011.  By the way, this excludes income taxes paid by the airline companies!  When is this going to end?  Just imagine if you started a business and the federal government took 20% off the top before you saw any money coming into your business operations.  Airlines are now taxed higher than the so-called “sin” taxes which are applied to alcohol, tobacco, and firearms.

The airline industry is a significant driving force to the US’s economic activity and employs millions of Americans.  They also are involved in creating lots of jobs at hub cities and reaching out to small and medium-sized communities.  Why do they deserve to be taxed as they are today?  When will it stop?

Guess what, the federal government is not stopping here.  Obama administration is now proposing under the American Jobs Act a new $100 per flight tax that would cost $11 billion over the next 10 years.  The proposal also seeks increase the passenger security tax from today’s minimum of $2.50 per customer per flight segment to $7.50!  This is outrageous—a 3x increase!  This proposed increase would cost nearly $25 billion over 10 years.  More than half of that would be not to improve security but instead applied to paying down our federal government’s debt.  Why should the airline industry be singled out to pay for Washington’s irresponsible spending?

If these major tax increases get put into place, not only will we as consumers be saddled with them but airlines themselves being increasingly squeezed, will be forced to pull out of serving smaller communities.  The airlines then will be forced to lay off more employees as it downsizes to eliminate routes and service that become unprofitable.  It is a death spiral.

Our airlines also compete against foreign airline companies whose government in many cases have enlightened aviation policies.

Again, just multiply these oppressive government taxes and tariffs across many other industries and it does not take a rocket scientist to understanding how damaging the current federal government is to industry and job creation.

 

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