U.S. airlines led by United Continental Holdings Inc. (UAL) may pocket $1.3 billion in higher fares tied to the Federal Aviation Administration’s partial shutdown as Congress deadlocks on the agency’s funding.
The FAA already has been unable to collect $28.6 million a day in aviation taxes since midnight on July 22. Missed receipts may climb by $1 billion if the matter remains unresolved until lawmakers reconvene in September, FAA Administrator Randy Babbitt said. President Barack Obama today urged congressional leaders to reach a resolution this week.
The largest U.S. carriers, including United, Delta Air Lines Inc. (DAL) and Southwest Airlines Co. (LUV), stand to reap that much new revenue after raising fares to mirror the suspended taxes and keeping the difference, said Rick Seaney, chief executive officer of Dallas-based ticket researcher FareCompare.com.
“This is manna from heaven, and a real windfall for the airlines,” Seaney said in an interview. “I don’t expect them to drop the fare increases. Why would they? Total ticket prices are the same and it doesn’t seem to be hurting bookings.”
Economic super genius and House Majority Leader Eric Cantor had this to say:
[W]hat airlines have done is have stepped in and said, well, if we’re not going to pay that money to the federal government, we’re going to keep it towards our own bottom line. And I guess that’s what business does.
So much for the idea that lower taxes means lower prices, eh? If you raise their taxes, they pass it on to the consumer and if you lower their taxes, they just keep the “manna from heaven”.
Also, too, wrong.
Here’s the grim report that will surprise no one who’s been paying attention the past three years: The fat cats are fatter than we thought, and the incomes of regular folk are worse than we thought.
Profits account for a larger share of GDP than at any time in the past 60 years…And personal incomes of American families were $265 billion lower over those three years than previously estimated.
Profits at staggering levels. Wages down. Hiring? Not so much. Have a look at this graph from the Michigan Department of Technology, Management and Budget:
Republicans held the unemployment insurance benefits of out of work Americans hostage last winter to ensure that the Bush tax cuts on wealthy Americans (“Job Creators™”) with assurances that they would, you know, create jobs. Problem is, they aren’t creating jobs. They are pocketing the profits. And the most insanely profitably companies, the oil companies, GET GOVERNMENT SUBSIDIES PAID FOR BY THE AMERICAN TAXPAYERS!!! (Yes, I’m shouting.)
All of this and people still believe what Republicans say about cutting taxes and its affect on costs and job creation. It really is an idiocracy that we live in, innit?
Let’s not forget that the Stimulus passed by Congress in 2009 had over $32 billion in tax cuts to businesses and over 40% of the $787 billion package was tax cuts in general. This was a move that was heralded by the Republicans. It hasn’t had a discernible impact on the unemployment rate but, despite their cheerleading for it, Republicans still blame its lack of impact on President Obama.
Heads they win, tails Obama loses. Perfect. Idiocracy in action.