Taxes are virtually always born by both consumers and producers

One wonders if any reporters have ever taken any economics. From the SF Chronicle:

American, United, Continental, Delta, US Airways, Southwest, AirTran and JetBlue all raised fares, although details differed. Most of the increases were around 7.5 percent.

Only a few airlines were still passing the tax break on to passengers Saturday night, including Virgin America, Frontier Airlines and Alaska Airlines.

The expiring taxes can total $25 or more on a typical $300 round-trip ticket. They died after midnight Friday when Congress failed to pass legislation to keep the Federal Aviation Administration running.

That gave airlines a choice: They could do nothing - and pass the savings to customers - or grab some of the money themselves.

Tom Parsons, who runs the Bestfares.com travel website, said consumers should get the tax break.

"Why would the airlines deserve it?" he said. "They already hit us with enough fees. Now they're keeping the government fees too." . . .

Hint: draw a positively slopped supply curve and a negatively sloped demand curve. Now impose a tax. It should be pretty obvious that both the consumer and producer surpluses have been reduced by the tax.

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