New taxes on airfare coming your way in new Obama budget

The new Obama budget will increase the current the current $2.50 per segment (and ominously named) "September 11th Security Tax" to something higher - exact details have not emerged as of yet but expect it to be substantial. The government claims that the current tax covers only 36% of the actual costs of security screening.

While all airline tickets are already heavily taxed, this is the only tax that (currently) also applies to frequent flyer award redemption tickets. Its that little (and annoying) $5 or $10 that airlines collect from you when you make an award redemption.

Here is an interesting description of the current taxes on an airline ticket have increased over the years. Its only going to get worse.

Expect the Air Transport Association (ATA) to fight this vigorously. Southwest will also fight this harder than the other carriers because they are hit harder by segment fee taxes than percent of revenue taxes due to their lower average fares, shorter flights and lack of higher-priced international services.