The airline industry’s trade organization, the Air Transport Association of America, is asking Congress to reject President Obama’s plan to levy $3.5 billion a year in new taxes and fees for airlines and passengers, saying it would increase fares or reduce service, resulting in job losses.

The tax increase was part of the $3 trillion deficit reduction plan that Obama introduced last week (see Obama Deficit Plan Includes Tax Code Overhaul). It calls for an increase in the Aviation Passenger Security Fee to more accurately reflect the costs of airline security. The fee has been limited to $2.50 per passenger “emplanement,” with a maximum of $5.00 per one-way trip.

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