De Facto Travel Restrictions in the USA?

In the Soviet Union, travel was restricted via an internal passport system. The idea was to keep the people in their cities or towns so that they could then be easier controlled. In a similar way, riding its tradition of consumerism, much of the west has implemented de facto travel controls by taxing tourists as much as cigarettes and alcohol and the services they need while on the road.  As the cost of living goes up and savings are destroyed, travel bears the burden of footing the bill of local deficits. Leaving one to ask: What’s so bad about travel?

Chicago’s tax on beer is about 9%, which pales in comparison to the 16.4% tax on hotel rooms and 23% tax on car rentals at O’Hare International Airport. Travel costs in Chicago are the highest in the nation. Baltimore and Washington, DC also levy heavy “fines” on its tourists. In Baltimore, taxes on rental cars are 40% of the total on corporate rates, and 25% at least on regular rates.

It is well-known that high government taxation on alcohol and cigarettes are designed to discourage use, but are tourism taxes intended to do the same or are they merely to pay for deficits? Or both?  What’s more, while taxes on cigarettes and alcohol don’t necessarily discourage use, service providers say the taxes do dampen travel demand. People just aren’t leaving that suburb.

As one of the most heavily taxed activities  in the US, travel represents one of the most schizophrenic industries in the nation. Cities and towns work hard to encourage visitors and tourism, but tax it more than anything else.  Clearly, bankrupt cities prefer taxing those individuals without a vote in pursuit of funding. Simultaneously, however, it is logical to presume that the powers-that-be in the west also desire similar sorts of travel controls on individuals as the Soviet Union had, and especially in the US.  It looks like they are getting that through intense travel taxes, such as the ones pursued by Rahm Emmanuel in Chicago.

Only part of the revenue actually pays for amenities used by travelers, while much of it pays for other things like massive sports arenas, indigent care, law enforcement and education.  So, for instance, US people from all over the country – and world – are paying for Yankee stadium and the  NYPD stop-and-frisks.

Naturally, car-rental companies and airlines say heavy taxes on their services stifle demand.  Smaller cars or no travel are chosen by individuals instead of paying taxes on cars that sometimes exceed the car cost.

Car-rental companies and airlines say heavy taxes on their services damp demand. With rental cars, some consumers, particularly leisure travelers, are discouraged from travel or opt for smaller cars to hold down the price of a rental, where taxes can sometimes exceed the car cost.

“Taxes clearly have an impact on consumer behavior,” said Richard Broome, spokesman for Hertz Corp.

In major destinations, a day’s travel tax can differ between $22.21 in Fort Lauderdale, Fort Myers and West Palm Beach, Fla. and $40.31 in Chicago, according to GBTA.  This is calculated by keeping the cost of hotels, car rentals and meals the same in each city. The difference, then, reflects merely the tax structure, and not higher nor lower travel costs. Those cities which do not fleece their tourists are Honolulu and Orlando, as they simply depend too much on tourism. But, even then, it is not clear if these figures take into consideration the Florida day state tax of $2.  At the Las Vegas airport, taxes and fees for car rentals exceed 100% of the rental rate.

Car-rental companies have had to align themselves against city councils working on proposals to raise taxes on rentals. They lost just recently an effort in San Mateo County, Calif. to raise taxes 11% at the San Francisco International Airport. ”It seems like increasing travel taxes is one of the first places local politicians go when they need revenue,” said a car company spokesperson.

Airlines say taxes absolutely affect air travel due to the substantial price increases they cause.  So, get this – maybe you remember this from Econ 101: high prices deter demand. This second part might not have been taught to you in your econ classes: that taxes increase prices by stifling demand causing smaller margins. Airline tickets are taxed like alcohol and cigarettes.  It is general knowledge that the government imposes high taxes on the latter so as to discourage truth – but, could the same be true of the former?

17 potential taxes and fees taken by the federal government makeup the scope of added costs on airline tickets. Passengers are forced to pay a federal excise tax to help fund the Federal Aviation Administration, which is the security fee which gives rise to the monstrosity of the Transportation Security Information or the Trans Sexual Assaulters, as well as fees incurred due to international inspections and fees charged by airports for passing through terminals.

The Department of Transportation began forcing airlines to include taxes in all price quotes for airline tickets. Rental car companies have had to do the same, as are hotels.  This perhaps disguises the truly parasitic nature of taxes.

Was Rahm Emmanuel sent as an agent  to increase travel costs across the country? That’s what he is doing for those individuals who must pass through Chicago, one of the busiest travel centers in the nation.

The hotel tax increase in Chicago made Chicago one of the highest cities for people to travel.  The levy there is now 16.4%. This includes 2% for a new Chicago White Sox stadium.  Chicago’s rental car tax is even higher – 23%.

Taxation without representation?

Not to mention the exit tax paid in some cities. One person responded to an article with the details of this article by mentioning the scene in the movie “Godzilla” with Mathew Broderick. As Godzilla tears up the city, NYC is being evacuated with bridges jam packed with cars. It was as if, according to the commenter, they were being forced to pay their tolls.

It is important to know your bottom line while traveling. Many companies have seemingly already begun doing this. One family chose LA as a destination in California over San Francisco because the latter charged too much in taxes.

One family was asked in Cleveland if they liked the Browns. They were puzzled.

“Cause, you’re paying for their new stadium . . .” she explained.

.Phoenix, AZ is another place to steer away from. A rental car there went from the price of $350 to to $600.  This was due to an airport tax, city tax, county tax, state tax and concession tax on rental cars and mostly at compounding rates.  So much for that being a haven of conservatism.

Boston just announced the building of a new stadium for the Red Sox – $80 million. But, they will only use the stadium for 10-12 games per year. County residents there were told not to worry, as the tax dollars for the project will not come from local sources. “Bed taxes” on tourism will take care of the bill.

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