It is fascinating that those who advocate for raising taxes — let’s say for example, the tax on cigarettes or a tax on fatty foods — understand that if you tax something at a higher rate, there is a disincentive to engage in or with that activity and, thus, you get less of it. The Triangle Business Journal reports here on study results of the likely impact of a proposal to raise taxes on the airline industry.
The Obama administration has proposed a $100-per-airplane departure tax and the doubling of a security fee, to $5 per passenger from $2.50 – both aimed at reducing the federal government’s budget deficit and funding Obama’s latest jobs proposal.
But the ATA says that the new tax and fees would lead airlines to reduce capacity by 2.3 percent and eliminate 9,700 jobs. That, in turn, could jeopardize 180,000 jobs in related industries, according to the ATA-sponsored study prepared by management consulting firm Oliver Wyman .
Since the tax hike is related to Mr. Obama’s latest economic policy proposal — his jobs plan — you’ll be interested in yesterday’s exchange about the jobs policy between U.S. Secretary of Education Arne Duncan and Carolina Journal Executive Editor Don Carrington.
