Washington eyes tax on airlines' ancillary revenue

11/16/2009 | NYTimes.com

Leading members of Congress have asked the Government Accountability Office to investigate airline fees, with an eye toward taxing the billions of dollars in revenue that the fees generate each year. "Maybe we have to teach them a lesson, and make them pay their fair share," says Rep. James Oberstar, D-Minn., noting that excise taxes help fund airport improvements seen as crucial to the industry. But the airlines counter that fees have helped to offset a steep decline in ticket sales, and any new tax would likely be passed along to passengers in the form of higher ticket prices. "It falls in the category, first, do no harm," says a spokesman for the Air Transport Association.

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