THE AIRLINES’ CHECKED BAG FEES ARE IN LARGE MEASURE A TAX ARBITRAGE PLAY: “That’s because moving revenue out of fares and into ancillary revenue excludes that revenue from the domestic 7.5% excise tax on tickets…Eliminate the tax disparity and — since most aircraft don’t max out their carrying capacity — in ten years I’d bet that checked bags get rebundled back into the fare.”

(Via Virginia Postrel.)