[Congressional Record Volume 143, Number 104 (Tuesday, July 22, 1997)]
[Extensions of Remarks]
[Page E1471]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


                     MAKING AIRLINE TAXES PALATABLE

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                        HON. STEVE C. LaTOURETTE

                                of ohio

                    in the house of representatives

                         Tuesday, July 22, 1997

  Mr. LaTOURETTE. Mr. Speaker, I call to my colleagues` attention the 
attached editorial that appeared in the Cleveland Plain Dealer on 
Thursday, July 17, 1997. As the editorial accurately states, under H.R. 
2014, ``fees for using the tax-supported airways would be more evenly 
distributed among the airlines, whatever their size. And the airline's 
(Continental) numbers support this contention.''
  Than you, Mr. Speaker for allowing me this opportunity to raise this 
important issue which will significantly impact consumers and our 
Nation's airline industry.

            [From the Cleveland Plain Dealer, July 17, 1997]

                     Making Airline Taxes Palatable

       U.S. airline passengers can expect to be squeezed to help 
     pay for a range of congressional tax cuts.
       New taxes on air travel are inevitable, whether a Senate or 
     House version of a revenue-raising measure is adopted. But 
     the latter offers fliers a better and fairer deal.
       The country's major airlines say they are not opposed to 
     such taxes in principle. After all, they should be intended 
     primarily to guarantee a reliable funding source for the 
     Federal Aviation Administration, which operates the national 
     air traffic control system and other support services.
       But the big carriers have lobbied vigorously against the 
     Senate's proposal to retain the existing 10 percent excise 
     tax on most domestic tickets--reduced to 7.5 percent on some 
     rural segments--and place a similar charge on the domestic 
     portion of an international flight.
       Instead, they have embraced a plan by House Ways and Means 
     Committee Chairman Bill Archer for a 7.5 percent domestic tax 
     with an additional $2 charge for each segment of a flight.
       Both bills call for increased taxes on international 
     travel. The House version is steeper, but is expected to be 
     modified in conference.
       Texas Republican Archer's bill is favored by Continental 
     Airlines, the largest operator at Cleveland Hopkins 
     International Airport, among comparable carriers that charge 
     a variety of fares on most of their routes. But Southwest 
     Airlines and other discount carriers prefer the Senate plan.
       Continental rightly argues that under the Archer plan, fees 
     for using the tax-supported airways would be more evenly 
     distributed among the airlines, whatever their size. And the 
     airline's numbers support this contention.
       Continental also complains that imposing a tax on the 
     domestic portion of a one-stop international flight, as in 
     the Senate version, would put U.S. flag carriers at a 
     disadvantage against foreign airlines that operate nonstop 
     from U.S. gateway cities. Cleveland's case for adding a 
     London flight could be damaged if such a tax is introduced, 
     Continental says.
       Airline excise taxes have been around since 1941, when a 5 
     percent levy was imposed on most means of travel. Before 
     1978, the government set ticket prices. But with 
     deregulation's variations in ticket prices, different 
     passengers on the same flight can pay different amounts in 
     taxes for the same use of the air traffic control system.
       Continental and the other major airlines argue that the 
     Archer plan beings the tax system closer in concept to a user 
     fee, which they believe the public would support. But its 
     bigger appeal, for now, is that it would not make such a dent 
     in the pocketbook.

     

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