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Short answer: let's say shipping a single person costs 100$ to an airline, and the airline sells the ticket 120$; but then you require that the airline pay 20$
by PoignardAzur 6y ago
Short answer: let's say shipping a single person costs 100$ to an airline, and the airline sells the ticket 120$; but then you require that the airline pay 20$ in taxes per ticket they sell: at this point the airline will sell its tickets 140$.
There's some wiggle room (eg maybe some airlines get too much profits and with the right incentives you can get them closer to the market price), but generally speaking, taxes to corporation trickle down directly to consumers.
That's something people don't understand, because they visualize giant mega-corporations as extracting immense amounts of wealth from the poor and giving it to their rich CEOs, but in practice these corporations benefit from economies of scale, and their margins are fairly tight.
- runarberg 6y agoEven though there is no difference economically speaking, there is definitely a psychological difference. We have studies that prove this fact. It is a gross oversimplification to ignore the perceived difference of an airline raising their price because of a tax, and a consumer having to have to pay an extra tax of their air tickets.