Time to Tax Those Checked Bag Fees?

 

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Airfare Bargains: Those Fees'll Get You

Notice, these are taxes and or fees you passengers pay for, not the airline. Which leads me to another thought.

All the uproar over bag fees and all that shouting in Congress over whether U.S. airlines should pay taxes on the nearly $770 million they collected in bag fees in the first quarter of this year alone -- is it justified? Yes…and no.

Yes, the airlines are making money from baggage fees. Fume all you want over how much better it was in the good old days, but the fact is, bags have become an important new revenue stream for the airlines and there's no turning back.

Besides, checking a bag is an option; you do not have to do it. I haven't done it in years, and as long as I have my trusty carry-on, I have no plans to change (and don't forget, JetBlue still gives you a free bag and Southwest gives you two).

This isn't to say taxing bag fees wouldn't bring in a lot of money to government coffers; it would. The General Accounting Office says if bag fees are taxed at 7.5 percent, it could mean an estimated additional $230 million more in taxes for this year alone, and you know the government is salivating over that.

Funny thing: Congress seems to be putting out the message that the airlines are something akin to "scoundrels" because they are not required to pay taxes on bag fees and that they are somehow "getting away" with it, raking in money on which they pay no taxes. I see it a little differently.

The airlines already pay normal corporate taxes, and when they make money (which isn't very often), they pay plenty. Something else to consider: when the airlines run into trouble, they either go out of business (2008's casualties included Aloha, Skybus and ATA), or they go through bankruptcy, tighten their belts and keep flying (that's what United did in late 2002, and they had plenty of company).

Question: Ever hear of the airlines getting bailed out like the Big Three automakers? Nope. The airlines sink or swim (or, perhaps, soar or fall to earth with a thud).

Besides, if the airlines were required to collect taxes on bag fees, who do you suppose would really be shelling out for these taxes? If you say "the passengers," go to the head of the class. We would be the ones to pay, not the airlines.

And don't be looking for any "first time flier's tax credit" like the one you got from that "first time home buyers" deal. No, just get your credit card out and be prepared to pay.

This work is the opinion of the columnist and does not reflect the opinion of ABC News.

Rick Seaney is one of the country's leading experts on airfare, giving interviews and analysis to news organizations that include ABC News, The New York Times, the Wall Street Journal, Reuters, the Associated Press and Bloomberg. His website, FareCompare.com, offers consumers free, new-generation software, combined with expert insider tips to find the best airline ticket deals.