Schumer and Carry-On Baggage

http://www.futureofcapitalism.com/2010/04/schumer-and-carry-on-baggage

New York's senior senator, Charles Schumer (who, a Democratic operative told me recently, is already collecting votes for the majority leader job in anticipation of a loss by Senator Reid), has been on a rampage recently against the idea that airlines might charge a fee for carry-on-bags. Why this is a government issue beats me -- if some airline figures it can ease the fighting over overhead bin space by making passengers pay for it, and thinks that is worth the chance of annoying customers over the fee, why not let them try it? But anyway, that is not how Mr. Schumer thinks about issues. He has issued not one, not two, not three, but four -- count them, four -- press releases on the carry-on baggage issue over the past week.

One of the releases announces legislation that Mr. Schumer calls the "Block Airlines' Gratuitous (BAG) Fees Act, or the BAG Fees Act."

You could fill a carry-on bag with just the Schumer press releases. One does make the interesting point that:

Airlines currently pay a 7.5-cent tax to the federal government for every dollar they collect in fares, but no tax is imposed on fees collected for non-essential services. Last January, the Treasury Department issued a ruling that deemed carry-on bags as non-essential for air travel. As a result, airlines can impose fees on these bags without paying any tax to the federal government on the revenues they collect. This creates a tax incentive for airlines to try to bilk consumers in the form of fees rather than fares.

In other words, if the airlines just charged everyone higher fares, rather than collecting the fees on bags, consumers would wind up paying more money to fly. But that way, the federal government would get a piece of the action, which is just how Mr. Schumer likes it.

The other interesting point is the one made by a New York Sun editorial back in 2008:

Mr. Schumer has accepted at least $11,000 in campaign contributions from JetBlue executives and employees. JetBlue's chief executive officer, David Barger, gave $2,000 to Mr. Schumer, while the airline's founder, David Neeleman, gave $3,000, and a vice president, John Owen, gave $1,750, and two other vice presidents, Margaret Ann Rhoades and Thomas Kelly, gave $1,000 each. On April 6, 2001, another seven JetBlue employees — David Ulmer, Alfred Spain, Nelson Holly, Jennifer Littleford, Robert Land, Christopher Collins, and Thomas Anderson — gave Mr. Schumer's campaign $250 each, while an eighth Jet Blue employee, Jeffrey Cohen, gave Mr. Schumer $500 on that same day.

JetBlue isn't charging the carry-on fee. The press releases, however, do a fine job of publicizing that some of the airline's competitors might do so.

We're not suggesting that Mr. Schumer's concern about carry-on bag fees is motivated by anything other than concern for the traveling public, together with the senator's overall idea of corporate America being ready, if not for Congress standing in the way, and willing to get away with anything it can at the expense of its customers. Anyway, it's all a neat little example of the man who may be the next majority leader in action.

by Ira Stoll  |  Apr 20, 2010 at 1:03 pm Related Topics:  Campaign Finance, Senator Schumer, Taxes receive the latest by email: subscribe to the free futureofcapitalism.com mailing list