2011-02-17

In Defence of the Obama $6 Border Tax Grab

When I first heard of the inclusion of a US$5.50 fee for crossing the border into the USA, I was livid. But then I heard that it only applies to planes and boats. Sucks to be you if you live on Wolfe Island (near Kingston), but for the rest of us, it will have minimal impact.

A tax is a tax. They suck, don't get me wrong. But charging a 5% federal sales tax, what we do to Americans who visit Canada, is arguably worse (try to visit Canada by plane and not spend at least $100). Cuba, the Dominican Republic and Mexico all charge departure taxes. Since international airports are always subsidised in some way or an other (think construction, custom inspections, land used by the airport, air traffic control, etc...), it makes sense for those who use them to pay for some of the costs.

You could also argue that reducing the number of immigration and custom agents at the border would have been much more expensive. I recently missed a plane because of an unexpected delay at the border (the bus driver decided to wait for 3 passengers being interrogated). That 1 hour delay cost me a heck of a lot more than $5 !

Travellers from Canada and Mexico are currently exempted from the fee. So, all things being equal, Americans going to other countries currently save $5 by flying via Canada (often cheaper anyway thanks to the earth being round). 

I didn't read the entire Obama budget, but I do hope the airplane subsidy is out the window. Colgan Air got a 5 million dollar federal US subsidy this year to fly people to Boston from Plattsburgh (Burlington and Montreal are 1 hour away) on behalf of US Air. How much per passenger is that subsidy? By my math*: $1414 !

(maximum 68 passengers a day times 52 is 3536. 5000,000 divided by 3536 is $1414)


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