Lapas attēli
PDF
ePub

Arguments for the proposal

Pros and Cons

1. All users of the Federally financed highway system should bear part of the cost of the system.

2. Exemptions from highway user excise taxes discriminate against the tax paying users, and provide a tax subsidy to exempted users.

3. Exemptions from highway user excise taxes deprive the Highway Trust Fund of revenues to finance improvements and repairs to the system.

Arguments against the proposal

1. The exemptions for alcohol fuels encourage utilization of alternate fuel sources and reduces petroleum usage.

2. The exemptions for buses encourages greater usage of more fuel efficient transportation, thus reducing petroleum usage.

3. The exemption for State and local governments is part of a long standing mutual intergovernmental policy of tax comity with respect to excise taxes generally.

[blocks in formation]

3. Airport and Airway Trust Fund Excise Taxes

Present Law

Excise taxes are imposed on users of the Federally financed aviation system. Receipts from these taxes are deposited into the Airport and Airway Trust Fund, and expenditures may be made from the Trust Fund for purposes authorized in the Trust Fund statute in the Internal Revenue Code.

The Airport and Airway Trust Fund excise taxes include

(1) an 8-percent tax on air passenger transportation;

(2) a 5-percent tax on domestic air transportation of property; (3) a $3-per-person international departure tax;

(4) a 12-cents-per-gallon tax on gasoline used in noncommercial aviation; and

(5) a 14-cents-per-gallon tax on nongasoline fuels used in noncommercial aviation.

Exemptions from the fuels excise taxes have been provided for aircraft museums and for certain helicopter uses which do not utilize the facilities and services of the Federal airport and airway system.

The taxes on air transportation apply to the purchase of transportation services for persons or property beginning before January 1, 1988. The taxes on noncommercial aviation fuels expire after December 31, 1987.

President's Budget Proposal

The President's budget proposal would extend the present-law airport and airway system excise taxes for two additional years (i.e., through December 31, 1989), and would provide a two-year reauthorization of the Airport and Airway Trust Fund programs (for fiscal years 1988-1989).

Other Possible Proposals

1. The present-law airport and airway excise taxes could be extended for 5 years, i.e., through December 31, 1992. (H.R. 2310, as approved by the House Committee on Public Works and Transportation on June 3, 1987, would provide a 5-year extension of the trust fund program authorizations, for fiscal years 1988-1992.)

2. The air passenger ticket tax could be increased from 8 percent to 10 percent, with the additional revenue to go into the general fund. Also, corresponding increases could be made in the air cargo tax and the international departure tax, with the additional revenues to go into the general fund.

Pros and Cons

Arguments for the proposals

1. The present-law airport and airway taxes should be extended to conform to the extension of the Trust Fund program authorizations.

2. Extension of the Trust Fund taxes is needed in order to prevent a reduction in net budget receipts (as CBO includes them in the baseline budget).

3. In a time of budget stringency, and if other specific excise taxes are to be increased, it is appropriate also to increase the air passenger and air cargo excise taxes for the budget deficit reduction effort. Increases in such excises are less regressive than for other Federal excise taxes.

Arguments against the proposals

1. Revenues from the aviation excise taxes should be reserved (and earmarked as under present law) for the Airport and Airway Trust Fund programs, as these taxes represent user charges for payment of Federal airport and airway system costs; thus, the taxes should be considered separately in the context of the proposed extension of the trust fund program authorizations. Any potential increase in such aviation excise taxes should be earmarked for needed expansion of the national aviation system and related air safety programs rather than for general revenues.

2. Increasing the aviation excise taxes could adversely affect the air passenger and air cargo industry.

[blocks in formation]

*Extension of present-law trust fund taxes do not result in any net increase in estimated budget receipts (included in CBO's baseline budget).

4. Imposition of Air and Ship Travel Tax

Present Law

Present law imposes no general excise tax on international travel to and from the United States. A $3 per person international departure tax is imposed, however, as part of the funding for the Airport and Airway Trust Fund, applicable to certain international departure flights exempt from the 8-percent domestic passenger ticket tax. (See 3., above.)

President's Budget Proposal

The President's budget proposes to impose an excise tax of $1 per ticket for international travel to and from the United States, its possessions, and its territories by airline or cruise ship carriers. Travel to and from Canada, Mexico, and travel to the United States that originates in U.S. possessions and territories would be exempt from the tax.

Revenue from this tax would be used to support international tourism and marketing activities, defined to include planning, developing and carrying out programs to stimulate and encourage foreigners to travel in the United States. The proposal would fund the $12 million annual budget of the U.S. Travel and Tourism Administration; any revenues collected in excess of the existing USTTA budget would go into the general fund of the Treasury. This proposal would be effective January 1, 1988.

(On June 9, 1987, the House Appropriations Subcommittee on Commerce, Justice, State, and the Judiciary approved such a $1 "fee" on international airline and cruise ship passengers entering the U.S. as a part of the Subcommittee's fiscal 1988 appropriations bill.)

Arguments for the proposal

Pros and Cons

1. A specific revenue source would provide necessary funding of the U.S. Travel and Tourism Administration, which supports programs (now funded from general revenues) to encourage foreign tourism in the United States.

2. A tax on international air and ship travel to and from the United States would be less regressive than certain other excise taxes.

Arguments against the proposal

1. The proposed air and ship travel tax would impose an additional tax and administrative burden on international travel to and from the United States. There is already a $3 per person interna

tional air passenger departure tax, which goes to the Airport and Airway Trust Fund (see above).

2. The U.S. Travel and Tourism Administration should be funded out of general revenues rather than from a new earmarked excise tax.

[blocks in formation]
« iepriekšējāTurpināt »