J Brauer | © Stone Garden Economics
For summer travel, I booked flights from Barcelona via Zurich to Bangkok and back from Bangkok via Vienna to Barcelona. The cost? It is US$462.25 for the flights, and US$492.82 in taxes and fees. Yep, you read that right: that’s MORE in taxes and fees than for the cost of the flights! I have seen nonflying costs come close to the flying costs for a number of years now, but this is the first time that taxes and fees actually exceed the cost of the seats.
I have no problem with the notion that privately-owned and -run airports need to be reimbursed for their cost. (But I believe that airlines should roll that cost into their pricing and not try to “lowball” the ticket price.) And I have no problem with visitors making some contribution by way of government taxes to help bear the burden of security costs. (But I believe that citizens of the countries TO which visitors fly should bear that burden—those citizens, after all, benefit from the visitors in many other ways.) But paying MORE in taxes and fees than for the cost of the flights seems beyond reason.
Actually, I am lucky! Holding a German passport, I can travel from my residence in the United States to Spain without paying for a visa. Likewise, I can enter Thailand for 30 days without cost or trouble. My partner, however, suffers the grave misfortune of holding a Colombian passport. Despite being a legal, permanent U.S. resident (or “resident alien,” as U.S. authorities phrase it), it takes veritable mountains of paperwork and time and money to acquire her visas. At about US$100 per visa per country, this is not cheap. But if that were all, I might almost be happy having my pockets emptied by government. But living in the U.S. state of Georgia, the Spanish want us to travel to their consulate in Miami, Florida—about a 1,200 mile, 20-hour return trip, costing US$170 in gasoline money alone—to personally apply for and pick up her visa. Sure, we can also pay a duly authorized agent—if only the Spaniards’ website would tell how to get a hold of one.
Heaven help us all.
Governments are out of control. They love to slam private firms’ abuse of monopoly market positions and then abuse their own monopoly power with abandon.
Governments also enjoy to price discriminate: Locals pay a low fee to enter a national park, say, and foreigners are asked to pay plenty more. In Costa Rica last year, I was asked to pay a park entry fee ten times higher than the locals’ fee even as my U.S. income is barely higher (if that) than that of some of my Costa Rican friends. Unsurprisingly, I did visit many beautiful places but not very many national parks.
Within the United States, locals claw tax monies from out-of-town or out-of-state visitors. A hotel tax-rate of 11% seems to be the minimum norm across the country, with some jurisdictions charging far more. But suppose that a state abolished this odious tax and advertised this fact across the nation. Wouldn’t one expect very many more visitors to come for business conferences and vacations in a “zero tax for visitors” state? Wouldn’t the increase in business generate more than compensating taxable business profit and income taxes from increased employment?
Governments have become Moloch to which people sacrifice nearly all their income. Governments have become disgustingly insatiable revenue-addicted monsters. Veritable money-gobbling machines, they consume the private sector’s resources on an enormous scale. If only, at the other end, something useful was excreted! And if the local population does not sacrifice enough, why then the host treats visitors to a monetary shake-down.
I always liked the idealistic American phrase of “government for the people, by the people, and of the people.” But today government is “for,” “by,” and “of” the people no longer. It has become a thing onto its own. The ongoing unrest in the wake of budget crises in the United States, in the eurozone, and elsewhere shows that citizens have begun to rebel against government grown too big and independent of its own citizen. In a world that is completely globalizing, it is about time that parochial government make way and facilitate, not hinder, free peoples’ free travel in a free world.
J Brauer is Professor of Economics, James M. Hull College of Business, Augusta State University, Augusta, Georgia, USA.