The FAA shut down over House Republicans’ insistence on including anti-union provisions in the agency’s re-authorization bill and the airlines are poised to collect $1.3 billion or more of extra profits in forgone taxes. With the FAA unable to collect the $28.6 million a day in aviation taxes it usually takes in, some of the nation’s largest airlines, including United and Delta, are pocketing the windfall, instead of passing their savings onto customers.
Appearing on Fox News this afternoon, House Majority Leader Eric Cantor (R-VA) defend this practice, saying, “That’s what business does”:
CANTOR: And what airlines have done is have stepped in and said, well, if we’re not going to pay that money to the federal government, we’re going to keep it towards our own bottom line. And I guess that’s what business does.
Oddly, Cantor seems to be unintentionally making the progressive argument about corporate taxes here. While conservatives generally argue that cutting business tax rates will lead to companies passing on savings to consumers and hiring more employees, progressives argue that corporations will just pocket much of these savings. The FAA shutdown offered an ideal test case for this question, and it seems that even Cantor agrees that pocketing tax savings is “what business does.”