Looks like Dick Armey will kill the idea of doubling the tax. Below is from yesterday's CCH tax news:


A supplemental appropriations bill under consideration by House Republicans would double an airplane ticket tax to fund aviation security costs, according to John Scofield, a Republican staffer with the House Appropriations Committee.

The unnumbered, untitled bill is scheduled for a mark-up by the House Appropriations Committee on May 9. It would spend $27.8 billion in additional funding for a number of programs, including $15.8 billion for national defense and $5.8 billion for homeland security.

At press time, the bill would also double the Passenger Security Fee on airline tickets from $2.50 to $5 per enplanement, not to exceed $10 per one- way trip. The increase would generate $150 million in fiscal year (FY) 2002 and $1.8 billion in FY 2003 to help fund aviation security, according to a House Appropriations Committee press statement.

The Fee was created last year to offset the expenses of the new Transportation Security Administration (TSA). At current levels it will raise $1.25 billion in FY 2002 while the TSA will cost $7.1 billion.

House Republican leaders oppose the tax increase. "I don't want it in there," said House Majority Leader Richard K. Armey, R-Texas. The GOP leadership is negotiating with members of the House Appropriations Committee over the provision, he said. Earlier this week a House Republican staffer told CCH that the tax hike would not remain in the bill due to House leadership opposition.

ATA Response
Air Transport Association president and CEO Carol Hallett noted that the proposal "could not have come at a more critical time for airlines and their passengers. The airline industry remains in dire financial condition and at serious risk of a major financial failure that could have a devastating impact on the broader economy." She added that neither the airlines nor passengers can afford it, and urged its rejection.

The ATA noted the "disproportionate" share of taxes paid by airline passengers by comparing selected federal consumption taxes as a percentage of purchase price. For example, consumption taxes are 11% for a bottle of rum, 18% for a pack of cigarettes, but 44% for a $100 airline ticket.