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January 27, 2012

Boxer To Airline – “Thou Shalt Not Bear True Witness Against Obama Administration”

The folks at Spirit Airlines decided to tell their customers the unvarnished truth about a new government regulation on advertising airfares – and Beastly Babs is spitting mad about it.

Sen. Barbara Boxer (D-Calif.) is sharply criticizing Spirit Airlines for its response to new price advertising rules from the Department of Transportation.

Spirit, a discount airline based in Florida, has protested DOT's requirement that advertisements for airline tickets include all taxes and fees in the prices that are listed for flights. The airline placed a pop-up ad on its website that says “new government regulations require us to HIDE taxes in your fares.”

But Boxer, writing to Spirit CEO Ben Baldanza about the new rules, which took effect this week, said that "nothing could be further from the truth."

The problem is that Spirit is exactly right. By requiring that the airlines tell only the total cost of the ticket rather than breaking out the government-imposed taxes and fees, DOT has hidden those taxes and fees from the consumer. That keeps the consumer (You and me) from knowing how big a cut that the government is getting of the ticket price.

This is akin to what is done with gas taxes. We see the price at the pump and blame the oil company or the station operator. But the reality is that if the price were broken down it would look like this:

gasprices.jpg

In other words, government is getting many times more in taxes than the oil company and gas station are in profits. The DOT regulation hides taxes in the same way -- and will allow the government to engage in scuch price gouging without us ever knowing that they were the culprit!

So I would like to praise Spirit Airlines for telling us the truth – and urge them to keep doing it.





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