Bag fees are a tax dodge for airlines because ticket prices are taxable and bag fees aren't. Taxpayers end up making up the difference to fund the aviation system.
To keep airfares down as fuel costs rise, airlines charge fees – some of which are federal-tax exempt – for reservation changes, seating, early boarding, meals, entertainment and baggage. Untaxed baggage fees in particular have generated $12.8 billion for airlines since 2007. If taxable, the revenue would help federally fund the air transportation system.
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