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By Jon Coupal
In last month’s State of the Union address, President Joe Biden chose to spend an inordinate amount of time on matters that most Americans don’t care about. Not much was said about the important issues of border security, inflation, crime, or China’s surveillance balloon that traversed over the entire U.S. before – belatedly – our Commander in Chief decided that it should be shot down.
Among the more trivial topics that Biden focused on is so-called “junk fees.” He urged Congress to pass a new “Junk Fee Prevention Act” which would curtail extra fees on the sale of online entertainment tickets; certain airline fees; early termination fees for TV, phone, and internet service; and resort and destination fees.
To be sure, these add-on charges can be annoying, but there is a huge difference between whether such fees should be disclosed in advance (they should) or whether banning such fees is government overreach at its worst. As noted by the Wall Street Journal in a February 13, 2023, editorial (The Junk Economics of “Junk Fee” Politics), prohibitions of additional services at higher costs actually reduces consumer choice. Even worse, it “will result in higher prices or fewer services for lower income Americans.”
Not to be outdone, California’s progressive politicians quickly jumped on the Biden “junk fee” bandwagon, introducing several bills targeting what they claim are either deceptive or excessive charges imposed by private businesses. For example, SB 611 (Senator Caroline Menjivar, D – Panorama City/San Fernando Valley) would require landlords to clearly state to potential renters what their up-front and monthly payments will be, including all required fees, to rent the apartment. But, under current law, this information is already required to be disclosed by the landlord.
Another, AB 1222 (Tina McKinnor, D -Inglewood) purports to provide greater transparency by ensuring that rental car companies quote rental rates that contain the entire amount, including all applicable taxes and additional fees or charges, necessary to rent the vehicle. But, like SB 611, this bill is more posturing than substantive. As anyone who has booked a rental car knows, the amount of the charge is clearly disclosed prior to the rental.
More insidious is SB 680 (Senator Nancy Skinner, D – Berkeley) which would prohibit auto dealers from charging above the Manufacturer’s Suggested Retail Price for electric vehicles. All this bill would accomplish would be to ensure that highly popular vehicles that are in limited supply would be shipped to other states where a market-based sales price could be negotiated. If the goal was to put more EV’s on the road in California, this bill could easily have the opposite effect.
To read the entire column, please click here.
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