Taxes lowered on airlines but airlines RAISE rates

[IGotWorms 4,058]

So, any of you rabid free-marketeers care to explain this to me:

 

A Bonanza for Airlines as Taxes End By JOE SHARKEY

Lets talk about taxes. Wait a second, come back here! I mean airfare taxes.

 

The subject comes up because of what Congress just did or, rather, did not do and what the airlines did in response.

 

On Friday, Congress failed to approve the extension of a bill to keep the Federal Aviation Administration running. Among other things, that meant the agency no longer had the authority to impose the various federal taxes that airlines add to the price of each ticket.

 

So as of 12:01 a.m. Saturday, the federal government began losing an estimated $25 million a day in tax revenue.

 

But did airlines simply pass on this savings to customers?

 

No, they did not.

 

Last week, evidently in anticipation of the taxs expiring, some airlines quietly began raising fares on average, roughly by the same amount as the federal taxes. Others did the same over the weekend, and most of the rest joined in on Monday.

 

Alaska Airlines and the discount carrier Spirit Airlines were among the few holdouts, said Rick Seaney, the chief executive of FareCompare.com, which monitors airline fares. In a statement, Spirit Airlines took the opportunity to chide its competitors.

 

Spirit is passing along all of these tax-rollback savings to its customers, it said. Some carriers have not been so generous and have pocketed the difference in taxes, in the form of higher fares.

 

The consumer should have saved anywhere from $25 to $50 round trip, Mr. Seaney said. Instead, its a windfall for the airlines.

 

But Jean Medina , a spokeswoman for the Air Transport Association , the airline industry trade group, said, Basically, consumers are now paying the same as they did last week.

 

Now I thought you all PROMISED me that if only the big, bad federal government would stop taxing people then the saintly, benevolent corporations would surely pass the tax savings along to me! Yet that is exactly what did not happen in this situation. Now how can that be?

 

Is it possible that an untaxed free market utopia might not be as kind as you all thought???

[Recliner Pilot 61]

I'm guessing taxes isn't the only cost a business has to deal with. Fuel costs have skyrocketed under your Hero.

 

Don't planes use fuel to stay in the air.

[IGotWorms 4,058]

I'm guessing taxes isn't the only cost a business has to deal with.

 

So it just so happens that every single airline was about to institute a fare increase that exactly equaled the expired taxes? I don't buy that.

[drobeski 3,061]

[IGotWorms 4,058]

 

Good retort

[Recliner Pilot 61]

So it just so happens that every single airline was about to institute a fare increase that exactly equaled the expired taxes? I don't buy that.

 

 

Link to "every single airline's" fares going up the exact amount of this tax? Apparently, your mom hasn't let you watch her book a flight. Fukkers change by $10-$200+ by the time you can check another website.

 

Good luck proving that claim, Moron.

[penultimatestraw 473]

Link to "every single airline's" fares going up the exact amount of this tax? Apparently, your mom hasn't let you watch her book a flight. Fukkers change by $10-$200+ by the time you can check another website.

 

Good luck proving that claim, Moron.

Isn't this in his original link?

 

Last week, evidently in anticipation of the tax’s expiring, some airlines quietly began raising fares — on average, roughly by the same amount as the federal taxes. Others did the same over the weekend, and most of the rest joined in on Monday.

[Phurfur 70]

So, any of you rabid free-marketeers care to explain this to me:

 

 

 

Now I thought you all PROMISED me that if only the big, bad federal government would stop taxing people then the saintly, benevolent corporations would surely pass the tax savings along to me! Yet that is exactly what did not happen in this situation. Now how can that be?

 

Is it possible that an untaxed free market utopia might not be as kind as you all thought???

 

You love to play the fool don't you?

[Phurfur 70]

I've been looking at booking a flight for next month all year and believe me rates are down. Today round trip was $237, it had been anywhere between $280 and $400 previously. I guess I got the savings passed along.

 

 

Worms, maybe you should change your booking agency.

[MDC 7,428]

You love to play the fool don't you?

 

Still waiting to hear about how the fans lost out cause of the NFL lockout.

[Phurfur 70]

Still waiting to hear about how the fans lost out cause of the NFL lockout.

 

Ignorance is bliss my friend, enjoy. You may will never figure it out so that is a good thing for you?

 

 

Hint #1 - My season tickets went up again this year.

[IGotWorms 4,058]

I've been looking at booking a flight for next month all year and believe me rates are down. Today round trip was $237, it had been anywhere between $280 and $400 previously. I guess I got the savings passed along.

 

 

Worms, maybe you should change your booking agency.

 

So every single major media outlet is wrong when they say that, on average, rates have been rising for the past year and ESPECIALLY after the FAA tax lapsed?

 

I think I'll trust the NY Times over your anecdotal evidence.

[IGotWorms 4,058]

Isn't this in his original link?

 

Poor Recliner Pilot can't read too well.

[RLLD 4,230]

Still waiting to hear about how the fans lost out cause of the NFL lockout.

 

It's called macroeconomics, you should read about it...

 

Rink

 

Goodell's announcement canceling the first preseason game exposes CAP's argument as a fraud. "But no one cares about the preseason," you might say. Not true. Preseason games generate $800 million in revenue for NFL teams.

 

Those revenues pay the wages of food vendors, ticket takers and souvenir salesmen. That $800 million number will go up significantly if the lockout continues into the regular season.

 

Unions inflict these kinds of completely unnecessary losses on their employers, and fellow employees, all the time. Remember the 2007 Writers Guild of America strike?

 

 

Read more at the Washington Examiner: http://washingtonexaminer.com/opinion/columnists/2011/07/conn-carroll-nfl-lockout-shows-unions-hurt-economy#ixzz1TCq6tqDe

[drobeski 3,061]

 

I think I'll trust the NY Times.

And this folks is all you need to know about this potato head.

[Blitzen 0]

And this folks is all you need to know about this potato head.

 

Sorry buddy but if you think this increase, which is being talked about by FareCompare, not just the New York Times, is simply coincidental to the tax reduction, then you're delusional. Please note that FareCompare does say that it will help keep airlines above water and that this is a good thing but to state that it isn't an opportunistic cash grab is ridiculous. Instead of fighting that part of the argument, you should instead focus on "taxes are bringing airlines to their knees" as a talking point.

[RLLD 4,230]

Sorry buddy but if you think this increase, which is being talked about by FareCompare, not just the New York Times, is simply coincidental to the tax reduction, then you're delusional. Please note that FareCompare does say that it will help keep airlines above water and that this is a good thing but to state that it isn't an opportunistic cash grab is ridiculous. Instead of fighting that part of the argument, you should instead focus on "taxes are bringing airlines to their knees" as a talking point.

 

But, when people were selling their homes for double and triple the fair value, no one uttered a peep?

[Blitzen 0]

But, when people were selling their homes for double and triple the fair value, no one uttered a peep?

 

I'm going to hazard a guess that it's because too many people benefited from it. Some didn't of course but many many did. Now in the case of the airlines, it's tough for consumers to see that keeping more companies afloat with this cash grab might make it possible to sustain lower prices longer through higher competition....all they see if the short term cash grab.

[RLLD 4,230]

I'm going to hazard a guess that it's because too many people benefited from it. Some didn't of course but many many did. Now in the case of the airlines, it's tough for consumers to see that keeping more companies afloat with this cash grab might make it possible to sustain lower prices longer through higher competition....all they see if the short term cash grab.

 

Perhaps. But I would submit that here is yet another case of wanting your cake and eating it too. People are only too happy to ream each other for unjustified profit, but when a business does it they cry foul.....

 

You cannot have it both ways, either reaming the consumer is good for the goose and the gander or it is not....

[Blitzen 0]

Perhaps. But I would submit that here is yet another case of wanting your cake and eating it too. People are only too happy to ream each other for unjustified profit, but when a business does it they cry foul.....

 

You cannot have it both ways, either reaming the consumer is good for the goose and the gander or it is not....

 

Now I can't remember, did most of the people make money in RE off of the sale of primary residences or secondary residences? When I sold in Montreal to buy in the Ottawa area, my house had increased in price/value/whatever so I sold it for much more than I had paid for it but I ended up buying a house that was also overpriced so I don't see how I benefited that much in the process save for the house being more recent and slightly larger (it is further out of town however). I can see that if I had been reselling secondary houses and not buying anything else then yes it would have been a cash grab. As it stands now, the only way I will make money on the deal is if our next house (which may be the last) is far smaller and in the boonies where prices are lower. It was more of a lateral move in our case. I have to say that if I had not bought when I did, I would have been a LOT further in debt today. But that is why I bought when I did as all indicators pointed to massive market price increases. I was single at the time and buying a large house seemed ridiculous to many but it was the best investment I have ever made.

 

I'm just curious, do you have issues with say, people who have stocks and sell them at an inflated price after buying low? Because that is what I feel I did. I realize stocks are different than primary residences however. But my motivation was not related to making money off of someone, it was that if I didn't buy when I did, I might have a much tougher time buying or I might have had to buy off of the Island in Montreal with all of the issues that involves.

[RLLD 4,230]

Now I can't remember, did most of the people make money in RE off of the sale of primary residences or secondary residences? When I sold in Montreal to buy in the Ottawa area, my house had increased in price/value/whatever so I sold it for much more than I had paid for it but I ended up buying a house that was also overpriced so I don't see how I benefited that much in the process save for the house being more recent and slightly larger (it is further out of town however). I can see that if I had been reselling secondary houses and not buying anything else then yes it would have been a cash grab. As it stands now, the only way I will make money on the deal is if our next house (which may be the last) is far smaller and in the boonies where prices are lower. It was more of a lateral move in our case. I have to say that if I had not bought when I did, I would have been a LOT further in debt today. But that is why I bought when I did as all indicators pointed to massive market price increases. I was single at the time and buying a large house seemed ridiculous to many but it was the best investment I have ever made.

 

I'm just curious, do you have issues with say, people who have stocks and sell them at an inflated price after buying low? Because that is what I feel I did. I realize stocks are different than primary residences however. But my motivation was not related to making money off of someone, it was that if I didn't buy when I did, I might have a much tougher time buying or I might have had to buy off of the Island in Montreal with all of the issues that involves.

 

You cannot compare homes to stocks, they are not fungible. I know that many people did make this comparison and treated the "investment" of residential real estate as a kind of stock/commodity. But they are not.

 

I have issues with any entity that knowingly gouges consumers, or a given market. I have a particular issue with the real estate fraud because of the outcome. I was outraged in 2006 and on into 2007 with the lack of market discipline across the board; mostly from banks, brokers and buyers, but sellers as well.

 

Here we have the airlines doing the same thing people so gleefully did to each other for years, but somehow its now wrong.......one cannot help but find it odd. And then you have the banks who cry and whine to the government to back off, ease regulation, then they get some room and nearly take down the entire global economy, and whine more to have the government then intervene in their markets......wanting their cake, and eating it too..... I will never forget the arrogance and gall of Fuld who clearly expected to be bailed out, wasn't and was indignant....

[Blitzen 0]

Perhaps. But I would submit that here is yet another case of wanting your cake and eating it too. People are only too happy to ream each other for unjustified profit, but when a business does it they cry foul.....

 

You cannot have it both ways, either reaming the consumer is good for the goose and the gander or it is not....

 

I would also argue that businesses do this too. Look at the softwood lumber issue, Is it out fault that we have cheap plentiful softwood to export? I think it's a competitive advantage but US companies cry foul over it all the time. Now China has plentiful cheap labour but it's funny how you don't hear companies complain about that one as much. Unions get tar and feathered if they mention it as an unfair advantage. Why is that? I think it's because too many benefit from it. It's unfortunate but that is human nature and I doubt it will change anytime soon.

[RLLD 4,230]

I would also argue that businesses do this too. Look at the softwood lumber issue, Is it out fault that we have cheap plentiful softwood to export? I think it's a competitive advantage but US companies cry foul over it all the time. Now China has plentiful cheap labour but it's funny how you don't hear companies complain about that one as much. Unions get tar and feathered if they mention it as an unfair advantage. Why is that? I think it's because too many benefit from it. It's unfortunate but that is human nature and I doubt it will change anytime soon.

 

Agree. But when I hear people complain about it, in this case the airlines, i am struck by the duality......

[Blitzen 0]

You cannot compare homes to stocks, they are not fungible. I know that many people did make this comparison and treated the "investment" of residential real estate as a kind of stock/commodity. But they are not.

 

I have issues with any entity that knowingly gouges consumers, or a given market. I have a particular issue with the real estate fraud because of the outcome. I was outraged in 2006 and on into 2007 with the lack of market discipline across the board; mostly from banks, brokers and buyers, but sellers as well.

 

Here we have the airlines doing the same thing people so gleefully did to each other for years, but somehow its now wrong.......one cannot help but find it odd. And then you have the banks who cry and whine to the government to back off, ease regulation, then they get some room and nearly take down the entire global economy, and whine more to have the government then intervene in their markets......wanting their cake, and eating it too..... I will never forget the arrogance and gall of Fuld who clearly expected to be bailed out, wasn't and was indignant....

 

As I said I understand the difference between RE and stocks but how many people were in my situation, where you happened to buy at the right time and merely want to make a lateral move in primary residences? If I sell at a much lower price, I won't be able to buy so why sell? If I don't sell, the policeman/fireman won't get my house anyway. I think what you're hoping to see would involve everyone at the same time making the same decision to sell low. I guess I wouldn't hold my breath....we are dealing with human nature here and not robots.

[RLLD 4,230]

As I said I understand the difference between RE and stocks but how many people were in my situation, where you happened to buy at the right time and merely want to make a lateral move in primary residences? If I sell at a much lower price, I won't be able to buy so why sell? If I don't sell, the policeman/fireman won't get my house anyway. I think what you're hoping to see would involve everyone at the same time making the same decision to sell low. I guess I wouldn't hold my breath....we are dealing with human nature here and not robots.

 

While my volume of posts clearly outlines the banks, government and brokers as being the truly culpable, and then too the buyers, it seems that people immediately like to go on the defensive when I also suggest that the sellers were complicit, and focus only on that portion. I am accustomed to this response, its likely the same one the airlines would use too....

 

If we are to expect the airlines to lower prices, and object to them not doing so, then why not also object to the suggestion that people too should lower their asking prices for homes? Particularly now?

 

I am often shocked by the level of acrimony I get when suggesting such a notion...

[Recliner Pilot 61]

Poor Recliner Pilot can't read too well.

 

Show me in your link where it says this:

 

 

"every single airline was about to institute a fare increase that exactly equaled the expired taxes"

 

Peanut pointed out on avg fairs would be about the same. Very different than "every single airline" raising it "exactly" the amount of the taxes.

 

I read just fine. You......not so much.

[Recliner Pilot 61]

Still waiting to hear about how the fans lost out cause of the NFL lockout.

 

 

Hall of Fame Game cancelled. The fans that would have gone to the game, and all the fans who would have made money because of the game, lost out.

 

http://www.cleveland.com/browns/index.ssf/2011/07/nfl_cancels_pro_football_hall.html

[Blitzen 0]

While my volume of posts clearly outlines the banks, government and brokers as being the truly culpable, and then too the buyers, it seems that people immediately like to go on the defensive when I also suggest that the sellers were complicit, and focus only on that portion. I am accustomed to this response, its likely the same one the airlines would use too....

 

If we are to expect the airlines to lower prices, and object to them not doing so, then why not also object to the suggestion that people too should lower their asking prices for homes? Particularly now?

 

I am often shocked by the level of acrimony I get when suggesting such a notion...

 

Look at it from another point of view. What is my advantage to sell at a lower price? If I cannot buy another primary residence because others don't do this, then I'm shiot out of luck. However, you could make an argument that an airline could have a competitive advantage if it passes the savings to consumers as it will lower its prices.

[RLLD 4,230]

Look at it from another point of view. What is my advantage to sell at a lower price? If I cannot buy another primary residence because others don't do this, then I'm shiot out of luck. However, you could make an argument that an airline could have a competitive advantage if it passes the savings to consumers as it will lower its prices.

 

What is the airlines advantage to not raise prices? They will only make more money. If they raise prices, people will still fly......

 

I think you as the home seller would eventually have a competitive advantage if the housing market remains steady and strong, your investments remain steady and strong. The tax base remains steady and strong.

 

Bubbles are not to our advantage.

[Blitzen 0]

What is the airlines advantage to not raise prices? They will only make more money. If they raise prices, people will still fly......

 

I think you as the home seller would eventually have a competitive advantage if the housing market remains steady and strong, your investments remain steady and strong. The tax base remains steady and strong.

 

Bubbles are not to our advantage.

 

I'm not debating about the sanity of bubbles. But how would I, as a homeseller, have a competitive advantage if I cannot buy another primary residence? What is the incentive to sell at a lower price and not be able to buy if you are not forced to?

 

I'm talking about homeseller behaviour in a bubble not before a bubble. I did not buy my house at an inflated price and I wasn't responsible for the bubble. The bubble happened between the time I bought my first house and the time I sold it.

[RLLD 4,230]

I'm not debating about the sanity of bubbles. But how would I, as a homeseller, have a competitive advantage if I cannot buy another primary residence? What is the incentive to sell at a lower price and not be able to buy if you are not forced to?

 

I'm talking about homeseller behaviour in a bubble not before a bubble. I did not buy my house at an inflated price and I wasn't responsible for the bubble. The bubble happened between the time I bought my first house and the time I sold it.

 

The incentive to maintain reasonable home prices is there for all, but it was the banks, brokers and buyers who you should be questioning, not the sellers. The sellers were complicit, but were not the ones who created and propagated the mess.

 

The compulsion to keep home prices reasonable ensures that your next home purchase will be lower, that your kids will have access to affordable homes, that the people we rely on for essential services can stay local.

 

I am talking about banks regulating themselves, being permitted to fail, I am talking about brokers behaving ethically, and I am talking about buyers using better common sense; but I am also suggesting that people who sell items recognize that inflated profits may seem super at the time, but they have consequences, that hurt you greatly later.

 

I sold two homes, for what was at the time half of market value....yes I know, that sounds crazy, but i want to live my life in a way where I earn what i deserve, and do not hurt others.

 

Now, if you are suggesting that there is no compulsion for home owners to adhere to a greater responsibility I can get with that... I can understand wanting to make huge profits, and I think the airlines also understand.....

[KSB2424 3,148]

Airline ticket was 10 dollars

Taxes were reduced by 50 cent

Airline raised rates by 50 cets

Airline ticket remained 10 dollars

Consumer sees no difference

 

The Supply/Demand/Price spit out that the consumer is willing to spend 10 dollars for an airline ticket so they kept it there instead of reducing it. The extra 50 cents goes to the Airline and not the gov't.

 

NOW lets say taxes were RAISED.

 

Airline ticket was 10 dollars

Taxes raised by 50 cents

Airline raises rates by 50 cents

Airline tickets raise to $10.50

Consumer has a 5% price increase on Airline tickets.

 

The Airline will always, and I mean always pass the tax increase to the consumer. A tax decrease will result in prices remainging the same or going down (by way of competition now that each airline has more wiggele room)

 

Class dismissed.

[Phurfur 70]

So every single major media outlet is wrong when they say that, on average, rates have been rising for the past year and ESPECIALLY after the FAA tax lapsed?

 

I think I'll trust the NY Times over your anecdotal evidence.

 

Living is easy with eyes closed, misunderstanding all you see.

- John Lennon

[Blitzen 0]

The incentive to maintain reasonable home prices is there for all, but it was the banks, brokers and buyers who you should be questioning, not the sellers. The sellers were complicit, but were not the ones who created and propagated the mess.

 

The compulsion to keep home prices reasonable ensures that your next home purchase will be lower, that your kids will have access to affordable homes, that the people we rely on for essential services can stay local.

 

I am talking about banks regulating themselves, being permitted to fail, I am talking about brokers behaving ethically, and I am talking about buyers using better common sense; but I am also suggesting that people who sell items recognize that inflated profits may seem super at the time, but they have consequences, that hurt you greatly later.

 

I sold two homes, for what was at the time half of market value....yes I know, that sounds crazy, but i want to live my life in a way where I earn what i deserve, and do not hurt others.

 

Now, if you are suggesting that there is no compulsion for home owners to adhere to a greater responsibility I can get with that... I can understand wanting to make huge profits, and I think the airlines also understand.....

 

But that's my point: I did not make that huge profit you keep talking about despite the market value of the house being higher because the house I was moving to was also overpriced. It was pretty much a lateral move and yet you say I should have downgraded and incurred a loss instead? My point is that if I had wanted to sell at a much lower price, I would not have been able to move to where we wanted to go for work so no policeman/fireman would have had my house anyway. If not for buyers willing to put their necks on the line and lenders giving them the rope, prices would have been lower. I would have sold for less and bought for less but would likely have ended up in the same house with the same amount of debt. I understand the Greater Responsibility aspect but are you saying I should have sold at a lower $ and put myself in the street or in a much smaller house totally outside of town? And then only have accepted offers from low wage earners for my home? What if I unknowingly sold at a low price to some big wig who then turns around and sells it for much more? Do I need to ask for the earnings of all home buyers? I think it's sad that some folks cannot afford a single family dwelling, I really do. But I don't think this is simply a RE issue. You don't think having to pay more and more for everything, on salaries that basically go up much slower than the cost of living (the real one), has any impact on what RE people can buy?

[MDC 7,428]

Ignorance is bliss my friend, enjoy. You may will never figure it out so that is a good thing for you?

 

 

Hint #1 - My season tickets went up again this year.

 

Because of the lockout? What a freaking moron you are.

[BLS 314]

It's called macroeconomics, you should read about it...

 

Rink

 

 

 

 

I would argue that the $800M that is NOT collecting via the 1 preseason game we'll miss is now free to spent elsewhere.

It didn't evaporate into thin air...and this is why I don't support state funding for stadiums.

The local businesses to the stadium prosper on the tax dollars of other people. That's redistribution.

[NewbieJr 541]

Because of the lockout? What a freaking moron you ate.

Dude, keep up that trash talk with Durfer and you'll end up on the business end of a John Lennon quote.

[Phurfur 70]

Because of the lockout? What a freaking moron you ate.

 

Let's see where ticket prices are in 10 years you short sighted moron.

[cbfalcon 825]

Dude, keep up that trash talk with Durfer and you'll end up on the business end of a John Lennon quote.

 

and not just any John Lennon quote. But a nebulous quote from a tired song that was inspired by dope and going through a divorce. Very politically relevant indeed.

[RLLD 4,230]

I would argue that the $800M that is NOT collecting via the 1 preseason game we'll miss is now free to spent elsewhere.

It didn't evaporate into thin air...and this is why I don't support state funding for stadiums.

The local businesses to the stadium prosper on the tax dollars of other people. That's redistribution.

 

Keep in mind the people who relied on training camp, and the patronage that it included, fantasy football magazines that were not published.....it goes on and on, when a business is not operating, the residual effects can have a large footprint.