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The total price of my airline ticket is how much?!?!

by on Jan. 26, 2012, under Politics

I’m not a frequent flyer these days, and the few trips that I have taken don’t make me yearn for another opportunity to fly any time soon.

The problem begins, and often ends, when checking airfares. Dinking around on Google can result in a wide array of posted ticket prices, but that’s merely the beginning of a final cost nightmare. While there have been some taxes on airline tickets for years, the current array of add-on charges will make your eyes glaze over and, if it was physically possible, cause steam to come out of your ears from frustration and outright agitation. Here are several examples of what the feds have now mandated for “up front” disclosure, but that doesn’t mean you’re gonna like them any more than you did when discovering them at the final stage of the process when payment is due: government excise tax, government segment fees, September 11th security fees, and airport passenger facility charges.

It used to be an easy proposition getting a non-stop flight to most major cities, but not these days. This is likely due in part because the feds have quietly “encouraged” airlines to segment their flight to accommodate the government segment fee. That’s right, every time that plane lands, even if you aren’t required to get off the plane, that fee is tacked onto the price of your ticket. But why? When I called several airlines the answers I got were essentially the same; “Because we’re required to charge it…” That answer was obviously directed by some government bureaucrat that probably flies on a private plane, not a commercial one.

And what the heck is a passenger facility charge?! Yes, it is as absurd as it implies; it’s a charge for the privilege of being able to access the inner sanctum of the airport, that magical area beyond the security checkpoint. I suppose in reality it’s an up front payment for the potential of being groped by a TSA agent who came to work in a bad mood.

Yep, things just keep getting better and easier when it comes to commercial air travel, and that pretty much explains why politicians will continue doing everything in their power to avoid using the same type of air transportation as the “commoners.,” commonly known as taxpayers. As usual, the joke is on us, but most of us aren’t laughing…

 


Air Force One fueled with tax dollars

by on Jan. 25, 2012, under Politics

During the State of the Union address the President’s made a pledge for closing tax loopholes on the wealthy, and in theory that sounds like a reasonable initiative. However, that would almost assuredly guarantee the elimination of the mortgage interest tax deduction, the charitable gifts deduction and to a lesser extent the state and local tax deduction, and each of these is economically helpful to mainstream taxpayers. But he did insist that he would sign legislation that would make a politician’s investments subject to the same insider-trading restrictions, conflict of interest rules and penalties that are imposed on regular taxpayers. While long overdue, it should be a completely supportable action by Congress. We’ll see…

He also called for action that would reduce the size of government and eliminate the redundancy of a number of agencies. But then he promptly announced the formation of a new mortgage crisis unit that will be headed by New York Attorney General Eric Schneiderman. The unit’s mission will be to investigate mortgage misconduct and illegal activities, but it’s clearly yet another expansion of big government and an blatant conflict with the genuineness of his words.

So why is Obama is on a post-State-of-the-Union junket in states that are critical to his re-election by attempting to sell the voters on all of the proposals highlighted in his speech. He’ll be traveling on Air Force One during the next three days in the following states: Michigan (16 electoral votes), Arizona (11), Colorado (9), Iowa and Nevada (6 each). But why is he allowed, and apparently comfortable, with the massive cost of using this aircraft for political gain? His speech called on all Americans to essentially suck it up and do their part in helping overcome the ongoing economic downturn. Nonetheless, his actions don’t align with his words.

By the end of his speech it was clearly apparent that it was more about launching his re-election campaign than about focusing on worthwhile legislative programs. Realistically, very little is going to be accomplished on his “to-do” list during 2012. In effect, business as usual in Washington with the leader of the country spending much of his time focusing on getting to remain in the oval office.


Going green may cause you to see red

by on Jan. 21, 2012, under Politics

As you pat yourself on the back for “going green” by installing solar panels purchased from a local company, you may have unknowingly boosted the Chinese economy as well. Most people are unaware that a solar trade war is being waged right inside our country due, in part, to an avalanche of of inexpensive imported panels from China and the ongoing push by environmental groups to abandon virtually everything associated with oil and gas energy.

But there’s a slight glitch; the U.S. solar industry is equally split over these imports with U.S. manufacturers of the panels insisting their sales are being diminished and are demanding a special tariff placed on the imports. However, another segment of the U.S. solar energy industry supports the import of less expensive panels are actually helping to fuel solar sales across the country.

U.S. based solar panel manufacturers are now offering a new patriotic sales pitch something on the order of “True green is also red, white and blue.” While this sounds good in theory, it isn’t resonating with consumers who must also consider their bottom line, and that means if the products perform comparably well, then the nod goes to the lowest cost option, and the U.S. manufactured panel are much higher priced than the ones coming from China. When boiled down to the ultimate reason for the price differentiation, its once again a union-driven phenomenon of higher wages being passed on to the consumer.

U.S. solar panel manufacturers also insist that the Chinese are breaking trade laws using a practice called “dumping” whereby they subsidize a customer/company that ultimately opens the door for selling a huge quantity at a discounted price rather than trickling in the products at a higher price. So far the U.S. Department of Commerce and the International Trade Commission hasn’t been able to determine any wrong doing on the part of the Chinese, they’re simply following U.S. laws to the letter.

Interestingly, an owner of one of the largest solar panel manufacturing companies in the U.S. openly admits that adding tariffs to Chinese solar panel imports would result in higher prices for American consumers, but the equalization of pricing makes the industry a much more fair place overall. It’s unlikely that most U.S. consumers look much beyond the bottom line price when shopping for comparable products whether they’re solar panels or any other mass produced commodity.

Another significant factor is that the majority of solar-related businesses in the U.S. are solely involved in installation of the panel, not the actual retail sale of them. So adding a tariff to Chinese solar panel would indirectly undermine the profitability, and potentially the sustainability, of these businesses and could ultimately put them out of business when consumers reach a financial tipping point of postponing the addition of solar panels. This aspect play directly into the shortage of jobs in the country, and shuttering solar panel installation businesses that are finally gaining some traction seems counter-productive at this time when millions of Americans remain out of work. In addition, such a move to hike tariffs could spark a trade war with China, and that’s surely a no-win issue, especially for the U.S.

The bottom line, as with most buying decisions, is the price of the product, not the country of origin. If a solar panel from the U.S. and China perform equally well, then a consumer is most likely to buy the one that has the lowest cost. We do it every time we go grocery shopping or searching for something online. Like it or not, it’s all about the money, and when we can buy a comparable product for less that means we have more money left over for buying something else. And when that “something else” is sold by an American company it tracks back to actual jobs versus unemployment.


 

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