Archive for July 26th, 2011

by jhwygil

Call it crisis profiteering, call it disaster capitalism – but airlines companies are doing what private corporations do: They maximize profits.

I’ve long made the argument many times in many scenarios that raising taxes or fees does not mean that those costs will be passed on to consumers.

I’ve said that in regards to housing costs, especially. Propose to raise building fees and every realtor and contractor in the city is down in city hall saying that if fees are increase, affordable housing will be no more. Propose to adopt the International Building Code in the legislature and there’s a whole bucket-load of legislators willing to decry the move as something that will make housing unaffordable.

I don’t know that I’ve ever heard any elected official dispute this unfounded complaint. They’ll regurgitate that just like cattle and their cud – some reiterating the claim, others accepting it while lamenting that it (the raise in fees, the new regulation) has to be done.

Say it often enough, and it’s true. Right?

Well, here’s an example of the the basic fact of capitalism: The cost of the product is what the market will bear.

Witness this past week – the GOP-controlled U.S. House of Representatives has refused to extend operating authority for the FAA. What that means is that 4,000 FAA employees have been furloughed without pay. Traffic controllers are, of course, still on the job.

For now. And just to point out the politics of this situation – is there any doubt that we will have an FAA? Air traffic controllers?

In addition to those 4,000 FAA employees that have been laid off, more than 90,000 airport construction and expansion projects have been shut-down. These are projects in process. These aren’t federal jobs, per se – but they are 90,000 construction jobs that then impact the construction supply industry and then the local grocery store and the gas stations and the mall*marts and on and on.

ALSO part of the FAA shut-down is their inability to collect the taxes that are placed on train and plane tickets.

So what did the airline industry do? They raised their ticket prices equal to the taxes on the tickets.

Capitalism is a lovely thing, isn’t it? The market supported that price for a ticket – it had no connection to actual cost of the product. Eliminate a tax and the price stayed the same. In fact, I bet each CEO called each other up and they all agreed it made sense.

And taxes are pretty significant on a plane ticket. An average of $61 per.

Somewhere the RICO Act weeps.

This poor website’s story was relevant for about 2 seconds.

MOST corporations operating in the U.S. pay no taxes.

The U.S. bailed out banks that not only made record profits – they paid little to no taxes. Take Bank of America, for example – BOA received a $1.9 billion refund.

So here we are in a budget debacle. The GOP and Rep. John Ineffective Boehner refuse to eliminate corporate tax breaks while their lobbyists lobby on their corporate employer’s behalf to ensure that is exactly what occurs – and corporations fly in the face of the whole so-called deficit disaster up there in Washington and raise the price of the airline tickets equal to the taxes that would have been collected.

It’s a “screw” to America, people. Hear them laughing?

Let’s not forget that the GOP is never without it’s ideology: Know why the House GOP is holding up extending FAA operational authority – something that has been done 20 times since 2007? Republicans want to toll back a new union elections rule that was adopted by the National Mediation Board last year.

Ideology first. Talking points second. Policy non-existent. Thank you Tea Party, I expect nothing less.

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