Moderators: richierich, ua900, PanAm_DC10, hOMSaR
TheFlyingDisk wrote:Why can't the US introduce a federal sales tax that's applicable to both foreign & domestic carriers instead?
cledaybuck wrote:The addition was introduced by U.S. Senator Johnny Isakson of Georgia. Delta Air Lines, one of the most vocal critics of Gulf carrier practices, is headquartered in Atlanta.
Shocking.
enilria wrote:The addition was introduced by U.S. Senator Johnny Isakson of Georgia. Delta Air Lines, one of the most vocal critics of Gulf carrier practices, is headquartered in Atlanta.[/i]
https://finance.yahoo.com/news/gulf-car ... 00360.html
StudiodeKadent wrote:TheFlyingDisk wrote:Why can't the US introduce a federal sales tax that's applicable to both foreign & domestic carriers instead?
Asking the US to introduce a simpler tax policy? That's asking too much. Plus, campaign donors typically like complex laws with tons of loopholes because this allows them to rent-seek more effectively.
But the basic reason is that sales taxes hit EVERYONE, and actually have a regressive impact on the poor (since the poor spend a higher proportion of their income on consumer goods). "Broadening the base" is thus politically dangerous.
Also, "new taxes" are never an easy sell. Even Democrats can't win on such a platform (I believe the Dukakis campaign proved this). At best you can campaign to replace certain taxes with other tax systems, but also remember that the US federal income tax system is top-heavy (its mostly paid by the highest earners). Replacing a top-heavy system with a system that is more broad-based would result in people screaming that the broad-based system is a giveaway to billionaires, a Koch Brothers conspiracy, and an attack on the poor.
mjoelnir wrote:StudiodeKadent wrote:TheFlyingDisk wrote:Why can't the US introduce a federal sales tax that's applicable to both foreign & domestic carriers instead?
Asking the US to introduce a simpler tax policy? That's asking too much. Plus, campaign donors typically like complex laws with tons of loopholes because this allows them to rent-seek more effectively.
But the basic reason is that sales taxes hit EVERYONE, and actually have a regressive impact on the poor (since the poor spend a higher proportion of their income on consumer goods). "Broadening the base" is thus politically dangerous.
Also, "new taxes" are never an easy sell. Even Democrats can't win on such a platform (I believe the Dukakis campaign proved this). At best you can campaign to replace certain taxes with other tax systems, but also remember that the US federal income tax system is top-heavy (its mostly paid by the highest earners). Replacing a top-heavy system with a system that is more broad-based would result in people screaming that the broad-based system is a giveaway to billionaires, a Koch Brothers conspiracy, and an attack on the poor.
Top heavy in regards to amounts. not percentage of income. If income is top heavy, taxes should be top heavy.
Aesma wrote:My sister is dating a French guy who happens to have a Hawaiian father, I told her to never marry him.
Aesma wrote:The US has no problem with evading taxes when convenient, or Delaware wouldn't be allowed to do what it does.
dtw2hyd wrote:I am surprised to know US-UAE/Qatar doesn't have income tax treaty. I recall expat pilots talking about paying US taxes on their ME income.Aesma wrote:The US has no problem with evading taxes when convenient, or Delaware wouldn't be allowed to do what it does.
Most US corporations evade taxes thru Double Irish Dutch Sandwich scheme. Very difficult to plug that loophole without European co-operation.
Waterbomber wrote:The principle is sound though.
If a foreign carrier is flying to the U.S. a lot but no decent sized U.S. airline is interested in flying to that country, there must be an imbalance.
The foreign carrier can be suspected of competing indirectly through their hub against direct routes operated by U.S. airlines, while benefitting of fiscal advantages that make the playing field uneven (hence no tax treaty in place). To even the playing field, they should pay a tax.
The problem is how do you calculate such a tax?
I think that revenues of different origins are too complex to sort out. A tax on revenues seems more workable, but even there, they could cheat by attributing more revenues to the flight sectors between DXB and a third country. For instance, a 1000 USD BOM-DXB-JFK ticket could be made to show a 990 USD fare for BOM-DXB and only 10 USD for DXB-JFK.
Perhaps taxing Revenue seat miles at a fixed rate for the entire ticket originating or arriving to the U.S. would be smarter.
Waterbomber wrote:The principle is sound though.
If a foreign carrier is flying to the U.S. a lot but no decent sized U.S. airline is interested in flying to that country, there must be an imbalance.
The foreign carrier can be suspected of competing indirectly through their hub against direct routes operated by U.S. airlines, while benefitting of fiscal advantages that make the playing field uneven (hence no tax treaty in place). To even the playing field, they should pay a tax.
The problem is how do you calculate such a tax?
I think that revenues of different origins are too complex to sort out. A tax on revenues seems more workable, but even there, they could cheat by attributing more revenues to the flight sectors between DXB and a third country. For instance, a 1000 USD BOM-DXB-JFK ticket could be made to show a 990 USD fare for BOM-DXB and only 10 USD for DXB-JFK.
Perhaps taxing Revenue seat miles at a fixed rate for the entire ticket originating or arriving to the U.S. would be smarter.
mjoelnir wrote:So if the USA taxes air travel done on an UAE airline, should than the UAE tax Boeing profits of selling aircraft to the UAE? The UAE airlines would stop flying to the USA and stop buying Boeing aircraft. I assume the USA would lose more than the UAE.
mjoelnir wrote:Waterbomber wrote:The principle is sound though.
If a foreign carrier is flying to the U.S. a lot but no decent sized U.S. airline is interested in flying to that country, there must be an imbalance.
The foreign carrier can be suspected of competing indirectly through their hub against direct routes operated by U.S. airlines, while benefitting of fiscal advantages that make the playing field uneven (hence no tax treaty in place). To even the playing field, they should pay a tax.
The problem is how do you calculate such a tax?
I think that revenues of different origins are too complex to sort out. A tax on revenues seems more workable, but even there, they could cheat by attributing more revenues to the flight sectors between DXB and a third country. For instance, a 1000 USD BOM-DXB-JFK ticket could be made to show a 990 USD fare for BOM-DXB and only 10 USD for DXB-JFK.
Perhaps taxing Revenue seat miles at a fixed rate for the entire ticket originating or arriving to the U.S. would be smarter.
The principle is everything else but sound. It is a terrible idea and only people who do not think about consequences could contemplate it. Talking about looking no farther than your nose.
You never view trade with only one part of the trade in view or mind. To make an example, the UAE sells air travel internationally. The USA sells aircraft internationally. In both cases you find imbalance in trade. So if the USA taxes air travel done on an UAE airline, should than the UAE tax Boeing profits of selling aircraft to the UAE? The UAE airlines would stop flying to the USA and stop buying Boeing aircraft. I assume the USA would lose more than the UAE.
Once again for people thinking about trade in regards to airlines only. The UAE is one of the few countries with whom the USA has a positive trade balance. Including air travel the UAE buys more goods and services from the USA than sells to the USA. Imbalance in different sections of trade is usual.
StudiodeKadent wrote:Seriously, the US3 aren't even overly exposed to the ME3 in the first place.
dtw2hyd wrote:So ME3 doesn't pay taxes at both ends by gaming the system, but a foreign carrier like US3 pays taxes at one end.
dtw2hyd wrote:No country levies taxes on foreign carriers with the basic assumption everyone pays taxes at home. Occasionally local/state/federal governments give temporary incentives to local carriers, like the much-hyped Georgia's fuel tax exemption.
What makes ME3 practices unfair, they neither pay local taxes nor pay taxes in the foreign country.
Had US3 offer similar frequency, reciprocity would take care of this issue, but now...
Waterbomber wrote:mjoelnir wrote:Waterbomber wrote:The principle is sound though.
If a foreign carrier is flying to the U.S. a lot but no decent sized U.S. airline is interested in flying to that country, there must be an imbalance.
The foreign carrier can be suspected of competing indirectly through their hub against direct routes operated by U.S. airlines, while benefitting of fiscal advantages that make the playing field uneven (hence no tax treaty in place). To even the playing field, they should pay a tax.
The problem is how do you calculate such a tax?
I think that revenues of different origins are too complex to sort out. A tax on revenues seems more workable, but even there, they could cheat by attributing more revenues to the flight sectors between DXB and a third country. For instance, a 1000 USD BOM-DXB-JFK ticket could be made to show a 990 USD fare for BOM-DXB and only 10 USD for DXB-JFK.
Perhaps taxing Revenue seat miles at a fixed rate for the entire ticket originating or arriving to the U.S. would be smarter.
The principle is everything else but sound. It is a terrible idea and only people who do not think about consequences could contemplate it. Talking about looking no farther than your nose.
You never view trade with only one part of the trade in view or mind. To make an example, the UAE sells air travel internationally. The USA sells aircraft internationally. In both cases you find imbalance in trade. So if the USA taxes air travel done on an UAE airline, should than the UAE tax Boeing profits of selling aircraft to the UAE? The UAE airlines would stop flying to the USA and stop buying Boeing aircraft. I assume the USA would lose more than the UAE.
Once again for people thinking about trade in regards to airlines only. The UAE is one of the few countries with whom the USA has a positive trade balance. Including air travel the UAE buys more goods and services from the USA than sells to the USA. Imbalance in different sections of trade is usual.
There is something radically incoherent about your argument. Ignoring the fact that we're comparing apples and oranges, let's analyse it.
When the UAE buy a Boeing aicraft, they are buying a finished product that has been produced through design, development, certification, production. It's the fruit of labour over labour, and labour is taxed in the U.S. Any remaining margins for Boeing and its suppliers at every stage of the process are also subject to corporate taxation. So when Boeing sells an airplane, tax has already been applied to the entire aircraft.
Now the same happens at U.S. airlines, where labour is subject to taxes as are airlines' corporate profits.
However, the same can't be said about the ME3. No taxes are collected on labour nor corporate profits. Yet they carry the same pax to/from the U.S. through their hubs.
As a result, the ME3 can carry the same pax at a lower cost than U.S. airlines, but at the same rate of profit, hence creating unfair competition and market share.
The U.S. can't do much about the labour not being taxed, but lower labour taxes means lower labour cost and higher corporate profits so they can do something about the corporate profits generated to/from the U.S.
Found a relevant document from IATA
https://www.iata.org/policy/Documents/t ... _final.pdf
4.2. IATA recognises that the amount of net income derived
from any particular State by an international airline, and consequently
the income tax payable in respect of that income,
may be challenging to determine.
4.5. Operation of an airline to and from one State in its
global network has an economic effect on its operations in
every other State of its network and vice versa. It has therefore
been considered by most tax administrations and by the
airlines themselves that apportionment formulas provide a
reasonable base on which to levy net income tax in States
other than the State of fiscal domicile. Appendix 7 provides
a brief outline of several generally accepted net income
apportionment formulas.
4.6. Any State which levies tax generally on a net income
basis, should allow international airlines doing business within
its jurisdiction to apportion expenses and other charges incurred
during the year against the revenue derived in that same period.
This should be irrespective of whether these expenses or other
charges were actually incurred in the State seeking to levy tax.
This permits a reasonable determination of the taxable net
income of the international airline within the taxing State.
4.7. In contrast, taxation based on deemed profit or as a
percentage of gross revenue has no relationship to operating
profit, could result in double taxation and is discriminatory
and regressive. IATA cannot proffer or endorse these methods
of taxation and ICAO also does not endorse these forms
of imposition.
If anything, the Americans are giving the world a lesson on business.
First sell them the B787's, then and only then, tell them that they'll also be paying taxes in the U.S. for as long as they compete unfairly against the US3.
Bravo.
enilria wrote:It's not that EK and EY don't pay taxes, NO COMPANY IN THE UAE PAYS NATIONAL INCOME TAXES. So, basically we are penalizing a whole country for not having an income tax? Plenty of countries have a GST instead of an income tax, BTW. This is one of the many ridiculous half true statements the U.S. carriers use.
U.A.E. Corporate tax (exception of oil and gas companies and subsidiaries of foreign banks):0%. There are no taxes levied by the Federal Government on income or wealth of companies and individuals.
https://en.portal.santandertrade.com/es ... tax-system
Varsity1 wrote:Only on A.Net is it "totally fair" for a country to dump on the USA (because their own markets suck), when the USA taxes it "OH BIG BAD MEAN USA!"
haha
Hope it passes.
dtw2hyd wrote:Another example of fairness.
Dubai Airport says State-owned aircrafts don't pay airport fees
dtw2hyd wrote:Emirates says we pay airport fees according to Dubai airport rules.
dtw2hyd wrote:Can Heathrow Holdings and British Airways pull this kind of English language parsing tricks?
Waterbomber wrote:The principle is sound though.
If a foreign carrier is flying to the U.S. a lot but no decent sized U.S. airline is interested in flying to that country, there must be an imbalance.
Waterbomber wrote:The foreign carrier can be suspected of competing indirectly through their hub against direct routes operated by U.S. airlines, while benefitting of fiscal advantages that make the playing field uneven (hence no tax treaty in place). To even the playing field, they should pay a tax.
enilria wrote:dtw2hyd wrote:Can Heathrow Holdings and British Airways pull this kind of English language parsing tricks?
In fact, UK has just such a rule in place to help British Airways. Funny you are unaware of it.
https://en.wikipedia.org/wiki/Air_Passenger_Duty
The fee is up to $600 per passenger and BA is exempt from paying it for their connecting passengers (BA represents 81% of all passengers connecting in London).
enilria wrote:Dubai Airport says State-owned aircrafts don't pay airport fees? Even Delta doesn't claim that. Please provide any link to that.
dtw2hyd wrote:enilria wrote:Dubai Airport says State-owned aircrafts don't pay airport fees? Even Delta doesn't claim that. Please provide any link to that.
Section 3.10.2 Royal, diplomatic, and state aircraft are exempted from landing and parking charges.
Read "Conditions of Use" Dubai International Passengers & Cargo document.
BTW, this is not about passenger fees.
Planesmart wrote:Phew. Only three more years to go.
enilria wrote:dtw2hyd wrote:enilria wrote:Dubai Airport says State-owned aircrafts don't pay airport fees? Even Delta doesn't claim that. Please provide any link to that.
Section 3.10.2 Royal, diplomatic, and state aircraft are exempted from landing and parking charges.
Read "Conditions of Use" Dubai International Passengers & Cargo document.
BTW, this is not about passenger fees.
link?
enilria wrote:True, but the current administration seems much more receptive to it.Planesmart wrote:Phew. Only three more years to go.
The effort to screw the ME3 has several years already behind it.
enilria wrote:..
Here's the same link from 11 years ago on this site, there was no evidence EK planes are State aircraft.
viewtopic.php?t=387947
cledaybuck wrote:enilria wrote:True, but the current administration seems much more receptive to it.Planesmart wrote:Phew. Only three more years to go.
The effort to screw the ME3 has several years already behind it.
AirbusCanada wrote:The Middle Eastern countries can just easily start taxing American corporations that do business there, like oracle, google, Exxon, chevron etc.
Sent from my iPad using Tapatalk
MSPNWA wrote:enilria wrote:The addition was introduced by U.S. Senator Johnny Isakson of Georgia. Delta Air Lines, one of the most vocal critics of Gulf carrier practices, is headquartered in Atlanta.[/i]
https://finance.yahoo.com/news/gulf-car ... 00360.html
That says all we need to know. You scratch my back, I'll scratch yours. That's a very bad proposal and a perfect example of collusion between politicians and businesses at the expense of everyone else.
klm617 wrote:MSPNWA wrote:[quote=enilria"]
Perfectly stated exactly Delta owns every city and state it has a hub and the airports do little or nothing to do what's in the vest interest of the traveling public.
dtw2hyd wrote:enilria wrote:..
Here's the same link from 11 years ago on this site, there was no evidence EK planes are State aircraft.
viewtopic.php?t=387947
Those were the good old days EK used to claim we are a true numbers run commercial airline until Delta gumshoes proved otherwise. Now they are a run of the mill state-owned subsidized airline.
Delta couldn't prove this issue in particular, but in general undisclosed transactions between state-owned arm length entities are listed as one of the concern.
We can play this whack-a-mole game forever.
klm617 wrote:airports industry.If I was EK I would pay one of the US# to operate a daily flight to DXB just to nix this tax idea and when they all refuse you will see the true intentions of the US carriers to keep international fares as high as they can and to control every market price and capacity wise.
enilria wrote:So you are admitting there is no proof this is true? Then what it's nothing more than a conspiracy theory. Why are we talking about it? ...and what that there is actual evidence of did Delta prove? Links only please? The only thing they have proven is that costs at DXB are subsidized by retail sales...the same model as the entire (government owned) U.S.