Dear Member of Congress
On behalf of National Taxpayers Union (NTU), the nation’s oldest taxpayer advocacy organization, I write to express our support for efforts to extend the suspension of certain aviation excise taxes. We believe that such an extension, coupled with more generalized tax policies to help support an economy-wide recovery, will help reduce operating costs on air carriers to maintain profitability, while also reducing ticket costs on taxpaying air travelers to boost consumer demand. To this end, addressing tax burdens is a sound approach, one which can avoid overreliance on complex aid programs that increase government interference in the private sector over the long term.
As you are keenly aware, the COVID-19 pandemic has decimated many economic sectors, with the travel industry experiencing some of the most significant impacts. In order to stop a complete collapse of the U.S. economy earlier this year, Congress included many provisions in the CARES Act to help alleviate both general and specific business conditions. These included measures to prevent air carriers from becoming completely insolvent, keep airline workers on payroll, and begin creating conditions to restore travel demand. While air travel remains far below 2019 numbers, and is likely to stay this way for the foreseeable future, this important sector has shown signs of recovery over the last few months.
Now is not the time to send signals that could jeopardize this fragile recovery. We urge Congress to continue Section 4007 of the CARES Act, suspending aviation excise taxes beyond its expiration at the end of the year. Some have recommended extending these taxes through the end of 2021 or when passenger traffic reaches 75 percent of its 2019 level. While other options for duration and termination triggers are possible, this is a sensible starting point for a discussion Congress must begin soon.
As you may know, NTU has supported a variety of fiscal policies to provide for relief and eventually recovery from the economic impact of COVID-19, ranging from less restrictive Flexible Spending Account rules to expansion of the Employee Retention Tax Credit. NTU has likewise called for suspension or delays in other types of tax payments, including excise taxes affecting other portions of the private sector. All such pro-taxpayer options, as well as an extension of Section 4007, should be on the table in upcoming deliberations of Congress.
While not a complete solution to the problem, easing tax burdens can help in the air transportation sector just as it can in numerous other areas of the economy, where all types of businesses and their employees need to hold on to their hard-earned money even more urgently now. In fact, given the unusually heavy tax load that air travel bears, an immediate adjustment could have a more salutary effect than elsewhere in bolstering investor and consumer confidence, not to mention the cash positions that could help airlines and their employees cope with economic instability. Thank you for your consideration, and if you have any questions, we are at your service.
Sincerely,
Pete Sepp, President