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Comment by mike_hearn

2 months ago

Air travel is taxed not subsidized. As far as I know there are no subsidies to the airline industry, unless you get into very ideological arguments by claiming the US military is a form of subsidy to anything that depends on fossil fuels. Double checking Wikipedia confirms this. After a huge page listing all the taxes, there's one unsourced paragraph claiming that "some" governments subsidise air travel with a "who?" dispute filed against the claim:

https://en.wikipedia.org/wiki/Aviation_taxation_and_subsidie...

Road travel is usually profitable for the government as fuel taxes cover more than the costs of building and maintaining the roads. Drivers end up subsidizing rail in every country that I know of. It's possible EV cars will start to change this.

US passenger rail is nationalized. Amtrak is majority owned by the federal government, for example.

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mike_hearn

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ElevenLathe  2 months ago

There's not really a way to have this discussion without being ideological but military contracts, fossil fuel production subsidies (yes there is a tax on the fuel, but also a subsidy to the people pumping and refining it), and municipally-financed airports (including the tax subsidy on muni bonds) all seem to be pretty direct subsidies that the air travel industry would not exist without. Air traffic control is also a 100% governmental function that is necessary for the industry to exist.

On what you would probably term the more ideological side, there is noise pollution, environmental costs (this one is admittedly likely a wash -- it's not as if our airports would be nature reserves if they weren't used for aviation), and presumably a major hit to revenue and quality in major metro areas -- is O'Hare really the best possible use of that extremely extremely valuable piece of Chicago real estate, or could it generate more revenue for the city and happiness for citizens as housing, shops, commercial and industrial space, and parks?

Anyway have a good day. I'm glad you're a fan of motoring and aviation and hope it brings you great joy.

  • mike_hearn  2 months ago

    I don't get much joy from long distance travel in any form tbh ;) I keep posting in this thread because people keep making untrue claims about transport economics, and it's important to be realistic here.

    So we go unto the breach once more: in the USA the government run parts of the air system are funded by taxes on fliers, not direct subsidies. ATS is a part of the FAA which is funded by such taxes:

    https://usafacts.org/articles/who-funds-the-faa-you-whenever...

    Airports usually fund themselves via fees charged to airlines, which are then ultimately charged to the flier. You can see them in the fare breakdowns sometimes. I'm sure there are tiny airports in the US that are subsidized because governments love subsidizing uneconomic things for prestige reasons, but it isn't structurally needed.

DiogenesKynikos  2 months ago

In the US, fuel taxes and tolls combined only cover about 35% of the cost of building and maintaining roads. The rest of the cost is covered by the federal, state and local governments.

  • mike_hearn  2 months ago

    That's because gas taxes are an unusually live wire in US politics, not because roads are fundamentally uneconomic. Until 2008 gas taxes did cover highway spending, and they now require general transfers because gas taxes weren't indexed to inflation. According to this website the taxes weren't increased since 1993, so in practice the US system has been deliberately starved of sustainable revenue.

    https://taxpolicycenter.org/briefing-book/what-highway-trust...

    "Congress could pay for projected highway and mass transit spending by simply raising the federal tax rate on gasoline and diesel fuel. Increasing those rates by 15 cents per gallon along with indexing the rates for inflation would increase federal revenues by $240 billion over ten years (CBO 2022)."

    Balancing the highway books in the USA would be easy, and it's done already in most other parts of the world.