Wednesday, August 26, 2009

Travel and Taxes

Are taxes levied specifically on hotel room bills, airlines, car rentals and other travel-related things discriminatory? And are they by nature illegitimate and downright nasty?

Such are the implications of a new report jointly produced by a foundation linked to the National Business Travel Association ( and the employee travel spending tracker Concur and released by the NBTA this week at its annual meeting in San Diego. While both travel prices and tax revenue - general sales tax and travel-specific taxes - have fallen due to plummeting business and leisure travel and cautious consumer spending, the NBTA report warns that travel costs for Americans will rocket back up when the recession ends.

Fay Beauchine, chair of the NBTA Foundation, said in a prepared statement that "Taxes increased and more were implemented across the United States to make up for government revenue shortfalls during the recession. So, when the economy recovers, travelers will take a double hit of rising prices and exploding taxes...''.

This, the foundation clearly believes, will be a bad thing.

Will it? Does it matter what those taxes are used for? If we want things like roads and bridges that don't collapse, fire and police protection. airports that aren't falling apart, or music classes in schools, and - oh, the arts - it may indeed be necessary to hoist what the foundation calls "a discriminatory tax burden'' on our frail shoulders.

Consider the San Francisco Hotel Tax Fund, to cite one example. Instituted in 1961 and now notched at 14 percent of visitors' hotel bills, tax revenue from hotel room rentals in San Francisco - a tourist town where tourism is the largest industry - has for 48 years funneled millions to worthy and often-needy recipients in the city.

Among other things, the hotel tax supports Grants for the Arts (, a San Francisco city agency that in the 2008-09 fiscal year awarded $11.5 million to 231 groups and activities inside the San Francisco city limits. Cultural institutions as august as the San Francisco Opera, as festive and fun as the St. Patrick's Day and Carnaval parades and as grassroots-minded as neighborhood arts centers have found good things to do with the money.

Why shouldn't visitors help to keep those ventures alive? Local residents need and want them, and a good many travelers flock to San Francisco for its high culture and edgy arts scene, cultural diversity and offbeat energy. Travel-related taxes in turn help nourish the attractions that draw those visitors, joining travel and taxation in a feedback loop.

Look, no one deeply loves paying taxes, and opposition to taxes of any kind is a quasi-religious tenet in the United States, I realize. But if Americans want the cultural depth and richness of Europe and the 21st century infrastructure of Japan and parts of fast-developing China and the Middle East, the money has to come from somewhere.

Travel can and should pay its fair share.

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