Buffett Battles Bush as Corporate-Jet Owners Fight Tax Increase

[RamboLiberal]

Source: Bloomberg.com

U.S. airlines, which already share the sky with corporate jets, are pushing to share their tax burden too.

President George W. Bush is proposing to cut the amount passenger carriers such as American Airlines and Continental Airlines pay in federal taxes each year by $1.68 billion. Most of that obligation would be shifted to small-jet operators, including General Motors Corp., Exxon Mobil Corp. and NetJets Inc., the business-jet charter company owned by Warren Buffett's Berkshire Hathaway Inc.

The Bush plan has touched off a fierce battle in Congress that cuts across partisan lines, with the carriers' trade association being outspent by an opposition that includes groups in rural communities that rely on smaller air-service companies.

Lawmakers say they are being inundated with calls and letters. ``I don't walk, breathe or move without being assaulted by very strong opinions on the subject,'' says Representative John Mica of Florida, the top Republican on the House Transportation Committee.

Under current law, the government collects $2,015 in taxes every time a full Boeing Co. 757-200 jet flies between New York and Florida, according to the Federal Aviation Administration. A General Dynamics Corp. Gulfstream 4 business jet flying a similar route -- and requiring the same amount of attention from air-traffic controllers -- pays $236, agency figures show.



Read more: http://www.bloomberg.com/apps/news?pid=20670001&refer=home&sid=a_weVSOX_Ito

[1932]

1. Corp jets don't pay taxes to airports. Commercial flyers subsidize CEOs flying

corp jets.

Joe Stiglitz writes about this in his second last book.

[cigsandcoffee]

2. If one wants to target the wealthy for taxes...

...hitting up private and corporate jets seems like a surefire way.

[jljamison]

3. rebuttal

The statement that the private jet "and requiring the same amount of attention from air-traffic controllers" is a vast oversimplification of the problem. It is the carriers that set schedules that say 10 different flights will depart ORD at the same hour when only 1 flight every 3 to 5 minutes can take off.

It is also not true to say that corporate jets do not pay taxes to airports. Corporate jets and general aviation aircraft pay a fuel tax which goes into the Federal Aviation trust fund. The trust fund then distributes funds to airports for operations and expansion/improvements.

How many terminals, parking lots, and public transit infrastructure at airports are needed for private/corporate jets and general aviation? Zero. So all that construction that you see every time you go to the airport - that is for the benefit of the airlines.

The net effect for me as a general aviation pilot is - my fuel tax will go from about $0.19/gallon to about $0.79 a gallon. That is almost a 400% increase. And I very rarely make requests of ATC.

Similar privatization efforts in other countries have proven disastrous for private aviation. In all of the UK last year, there were perhaps 1 or 2 people who sought and obtained an instrument rating. It is exhorbitantly expensive for a private individual to go through instrument training in the UK (and Europe in general) because of the user-fee mentality that has made training for and operating in the ATC environment astronomically expensive.

Much of the FAA's budget problems is due to its own mismanagement of taxpayer money. This "shift" is essentially a bail out to let the FAA start new technology programs with the same bumbleheads that wasted hundreds of millions, if not billions, of dollars on failed technology initiatives over the last decade. And it is a sort of bailout for the airlines as they have proven themselves unable to sustain their own operations in a profit-making way.