The World Travel & Tourism Council has today condemned a US$25 billion raid on airline passengers in the United States as “confused and counter-productive” and called on the US administration to think again about taxing an industry that is a driver of the US economic recovery.
The US administration is proposing to raise US$25 billion over 10 years through changes to the Aviation Passenger Security (APS) fee. APS is currently levied at between US$2.50 and US$5.00. Under the proposals, the current range will be replaced with a statutory fee minimum of US$5.00, with annual incremental increases of 50 cents from 2013 to 2017, to reach US$7.50 in 2017.
Of the US$25 billion additional revenue raised over 10 years, at least US$15 billion will be used for general taxation purposes, rather than passenger security.
Speaking after meetings today on Capitol Hill, Washington, David Scowsill, WTTC President & CEO, said:
“We fully support the US administration’s efforts to reduce its debt burden, but do not believe it is good economics to raid US$25 billion from an industry that is a driver of growth and recovery at a time when President Obama is keen to create millions of job through the US$450 billion American Jobs Act.
“Travel and tourism currently contributes more than US$1,300 billion or 9% of total US GDP, generates 9% of its total exports, and supports 15 million jobs. Taxes on travel and tourism tend to do more harm than good economically – as higher charges discourage high-spending visitors. Indeed, the US administration recognizes that each and every visitor contributes US$4,000 to the economy.
“WTTC believes that this plan has a laudable objective, but it is confused and likely to be counter-productive. We urge the Obama administration to send this plan back to the drawing board with instructions to promote an industry which will drive economic recovery and job creation – not damage it.”