I love when our elected representatives decide to speak up and express just how idiotic their thoughts are. I’ve heard a Representative state for the record that she thought Adobe Acrobat should be outlawed, for example, but I’m not so convinced that her view there is more ridiculous than that put forth today by Representative Tom Graves of Georgia. Graves, who represents Georgia’s 9th Congressional District (North of Atlanta, up to the Tennessee, North Carolina and Alabama borders), has announced that he will be introducing legislation which will repeal the DoT rule requiring airlines to list the full price of tickets, including all taxes, when they advertise.
This rule, put forth as part of the DoT’s consumer protection efforts, has come under attack from such legendary consumer advocates as Sprit Airlines, who is complaining the rule violates their first amendment rights because they cannot advertise one number and then charge a completely different number when the customer goes to actually make the purchase. Seems like just the sort of actions that should be protected, right?
The Congressman has a very simple premise for why the rule is bad: It prevents the airlines from indicating what part of the fare is actually the fare and what part is taxes and fees.
The federal government should not be inserting itself in the private sector to limit consumers’ ability to see how much they’re getting taxed. If the American people can’t see these costs clearly, I fear it will be easier these fees and taxes to be raised without their knowledge.
There’s just one problem with this line of thought (two, really, but I’m ignoring that the second line there isn’t a complete sentence): it is completely unfounded in reality. There is absolutely nothing in the rule that prevents the airlines from explaining in excruciating detail how much the taxes are and how much the fare is. There is nothing preventing them from reminding the consumer that there are a dozen or so different taxes and fees on the average airfare and way more on international itineraries. What the rule does, however, is prevent an airline from advertising a $9 fare which cannot be purchased for less than $20, no matter how hard you try. And that’s a good thing for consumers.
Fare listings like these, which are fully compliant with the rules, make it quite clear what the taxes and fees are, without violating the DoT rules:
And, yet, somehow apparently it is actually impossible for the airlines and OTAs to actually publish the information this way, as they are inhibited by the DoT rules. Strange, isn’t it, how they’ve managed to do it anyways??
I understand the complaint that nothing else in the USA is required to be marketed with the all-in price rather than allowing for customers to be surprised at the cash register. Let’s not use the examples of things that are bad for us as citizens as examples of why progress shouldn’t be made. Let’s got the other direction instead. Let’s hold hotels and rental car companies accountable, too. Let’s stop rental car companies from hiding the 50%+ surcharges until the final page of the check-out process. Let’s stop hotels from adding on $15-30 or more, per guest, per night, as a "resort fee" rather than actually including those charges in the fine print. After all, you cannot avoid paying them.
There is nothing wrong with calling attention to the fact that the average airfare has so many taxes associated with it. But pretending that there is some unwritten rule out there which is somehow preventing airlines from actually doing so is just plain lying.
Time to step up and face the facts, Congressman Graves: you’re full of it. Step up and do something that actually helps your constituents rather than lying to them. I’m sure they’ll appreciate it when elections roll around.
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It’s amazing – the legislation passed, the opposition lost the vote. Rather than move on, they introduce reverse legislation? Incredible…
Was there an actual bill on this one or just a DoT rule? I thought it was the latter.
Congress is definitely leading the charge to the bottom….
What about alcohol, cigarettes, and gasoline?
As far as I know all gasoline outlets in the USA advertise the a/i prices. There are cash/credit differences in some cases but otherwise I don’t know of any which are allowed to advertise a price and then add other taxes – including local/state sales taxes, much less federal taxes – after the fact.
Alcohol can definitely be advertised without local/state sales tax but all federally-mandated taxes are included in the advertised price in every instance I’ve ever experienced, and I’ve bought a lot of booze over the years.
Cigarettes have federal taxes included in the advertised prices I’ve seen. Not as sure about state/local. And I also haven’t paid a ton of attention since I don’t smoke and never have.
I actually don’t know of any product – other than airfare – regularly advertised which does NOT include all the federal taxes in the advertised price.
Hopefully the DOT will have enough sense and backbone to ignore this kind of deranged baying from the Teabaggers in Congress.
Let me guess – a tea partier who is anti taxation??
I’m a Tea Partier against more taxes, but this is a moronic way to go about tax awareness as most of the “taxes” in airfares AREN’T TAXES!
Most things are listed without the taxes (not sure on federal/state/local distinction) in B&M stores like Walmart, et. al. but the key distinction is that it’s a fixed % sales tax that’s not included. Thus, it’s insanely simple to estimate what they’ll be–it becomes second nature. What should be disclosed is when there are fixed $ fees ($2.50/segment) and fixed $ YQs which are not proportionally connected to the base fare.
Do airlines have to pay the 7.5% Federal Excise tax on fuel surcharges or just the airfare component? Is this why we’re seeing ridiculously low fares as above coupled with relatively massive fuel surcharges?
@Sean – I believe they don’t have to pay the 7.5% on Fuel Surcharges, but I could be wrong.
I believe the Fuel Surcharge doesn’t get reduced on corporate discounts or discount codes, etc. It may not even get counted against annual base fare spend. So this is a sneaky end-run around corporate discount programs, assuming I’m right.
AFAIK the fuel is taxed but not discounted on corporate contracts. So the feds get their cut but the discounts don’t apply. There was an IRS memo about it a couple years back in response to a request that AA made for clarification on a number of different ancillary fees.
I’m also not sure that the YQ is pooled in the ATIs, but I don’t know for certain.
No matter what, the Congressman is still a moron.
What about sales tax guys, should that be included? Or property tax on real estate, or registration on a car. Why can car dealers advertise cars that will cost more once you add license, taxes, registration, etc???
I’m no fan of the government, but a company should be able to do what it wants. If you don’t like it, fly someone else. If all-in pricing was so great, one of the carriers would have done it. Many sites (Kayak for instance) already provided the all-in price anyways.
“I’m no fan of the government, but a company should be able to do what it wants.”
Pretty broad statement.