In a move to keep cheap airplane tickets and cheap vacation packages truly cheap, five Senate Democrats have introduced a bill that would change the tax code to eliminate a loophole that allows airlines to avoid taxes on fees. Currently airlines pay a 7.5 percent tax on fares, but no tax is charged on fees for non-essential services.
The airlines are given preferential tax treatment for fees on services that are not judged to be reasonably necessary for air transportation.
The BAG (Block Airlines Gratuitous) Fee Act would require that carry-on bags be treated as essential and taxed at the same rate as fares. Also introduced was the Free of Fees for Carry-On Act. This bill would forbid airlines from charging fees for carry-on luggage that satisfy existing standards for weight and size. It would also require airlines to make available to customers, prior to purchase, detailed information about airline fees.
Spirit Airlines claims that its carry-on fee, which will apply to reservations made starting August 1st, will make boarding an aircraft faster and easier. Spirit says that it plans to use the income from carry-on bags to reduce fees for checked baggage and drop some fares. Spirits position is that it wants to give its customers a choice as to what they pay for without some passengers paying for the choices of others.
Senator Robert Menendez, D-N.J., claims that action is required now or the flood gates will be opened and more airlines may start charging for carry-on bags.
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