USA special tax on corp aircraft owners

[Gulfstreamaviator]

The BBC World service ticker is suggesting that a new tax is proposed on fat cats with aircraft.....White House proposal.......

glf

[Marcus550]

Haven't heard this, don't much care. Whatever it is, I'll pay it and continue to fly. Do find the "fat cats" characterization a bit annoying though.

[con-pilot]

Same here, I have not heard anything about this either. However, I'm not saying something like that is not in the works, considering the trouble President Obama is in.

Business aviation has been one of his top targets since he has been in office.

[bingofuel]

Does the tax apply to Air Force One.

After all, it is an airborne office, conference suite, enroute resfreshment facility , communications facility etc, and is available to fly certain high powered persons, at times that suit them to destinations not always readily available with direct routing by the airlines........

hmmm sounds pretty much what a lot of people use 'biz jets' for!!

[westhawk]

It's just more presidential posturing written by his handlers rhetoric mill. Congress members catch allot of free rides on corporate jets and I doubt that they'd vote their biggest campaign supporters a tax penalty. Even if they did, there would be a big fat loophole written in. I don't see this having any discernible effect on actual corporate jet usage. However the effect on industry confidence will not be positive in an already devastated bizjet market. Even recognizing the effect of the automakers affair, I still fail to understand the real source of the presidential vendetta against bizav.

Oh well.

[whenrealityhurts]

Most corporate biz owners are completely oblivious to the regulatory issues facing their flight departments...it's simply a 'fly me here, why is the plane down, how long, why did it cost that much' type of mentality.

More then a few of us flight department managers see some of this stuff coming down the pike and know much of it is started by the airlines to deflect some of their costs onto us, trying to spread their issues all over GA etc. So if an airline crashes because their pilots can't figure out where they are...we have to go out and get flight recorders and ground prox. Did RVSM come about because of all the corporate planes clogging up the skies...nope, but it cost every aircraft owner a 100k to comply. What about TCAS? Who's flying a G5 into that little field with Taylorcraft circling the pattern? So I guess it's there to keep from running into an airliner when you fly into LAX.

There have been all sorts of proposals out there to dump more costs onto corporate aircraft owners, and quite frankly despite the NBAA being there to support us, they are about as effective as the NRA is when it comes to gun control.

It's been my experience that there just aren't enough corporate aircraft out there to seriously generate any kind of serious revenue for the federal government, even when the FAA wanted to do a 'pay to fly' type of deal, like in Europe. Anytime 'fairness' comes up with regard to how much planes fly, what services they use, their impact on the environment, etc..it's the airlines that should take a little $ out of their profits to help pay the tab.

[Marcus550]

Ah....now I know what it is. The proposal is to REMOVE a tax break for corporate owners of business jets. It seeks to eliminate "accelerated depreciation" which allows the corporate owner to write off the cost of the airplane against his taxes much faster.

Makes zero difference to me. Our airplane is not now, nor has it ever been used for any business purpose.

[whenrealityhurts]

It shakes out the same over 5 years, and doesn't change the recapture. I always thought paying extra for a new plane to get the 33% that year was panic mode for most companies...like the CFOs were out to lunch chasing write offs the last day of the year.

More then a few startups went this way, then three years later when the bills started rolling in and nobody was flying anywhere, the planes were for sale.

[con-pilot]

Ah....now I know what it is. The proposal is to REMOVE a tax break for corporate owners of business jets. It seeks to eliminate "accelerated depreciation" which allows the corporate owner to write off the cost of the airplane against his taxes much faster.



Okay, now that I've heard of, funny thing is, although this makes good headlines for the Democrats, it is not removing a tax loophole, as all the tax is paid anyway, it is just a question of how soon or later.

Just more 'class warfare' political posturing. Not that hasn't been going on for over two hundred years. :p

[KKoran]

The purpose of the accelerated depreciation is to encourage companies to purchase aircraft--not to benefit the company, but to benefit aircraft manufacturers and increase employment. Obama supports accelerated depreciation to boost the economy and provide jobs, but when he's looking for tax revenue, fat cats in jets are just too good to pass up from the class warfare perspective.

[His dudeness]

I´m not from the States, however the problems over here are, IMO, the same than in the States (or even worse, if I look at the German tax law, which is the most complicated in the whole world...)

Exemptions on end, brought forward and into legislation by lobbyists, and them without having real benefit checks and hard legislation on the other end. What I mean by that is, that oftne taxbreaks or subventions or the like are given without checking the real impact and without punishment when it becomes clear that the receiving part uses them just to make money and not as intended, e.g. creating jobs that LAST.

The truth IMO is, that we should have a tax code without any breaks etc. at all.

Who wants to make money producing something buys a machine and thats it. He has to calculate that into his price and thats it. IF that would be the universal code and violators would be banned from the markets - or taxed - competion would be on real things such as know-how, how good your craftmanship is etc and not who has got the best taxlawyer.

Then there is the issue that rich people in most western countries enjoy real low taxes, the lowest in history I was told, and that coorperations don´t really pay taxes any more (at least the big ones)

That leaves the 'little man' to pay for all the ****e.

So, if Pres.Obama does cut the dead wood out of TAXING, he does something good. Somehow, however, I doubt this is more than a publicity stunt. The last few months showed how weak he really is.

BTW, my old boss moved to the States, sold his business that his family owned for more than 160 years (!) because of the lower taxes in the US.

Food for thought, at least for me.

Then, if you can´t afford a Jet without tax break, you probably don´t generate the jobs we want anyhow. And then look how much of the shiny jets is already produced in Mexico etc.

The CL 30 is parceled together with great sections coming from Belfast (UK) and Korea, the Sovereign has loads of Mexican made stuff in it etcetc.

So who benefits from an american tax break to keep the manufacturers afloat? The few (and fewer) dudes in Wichita or Conzuela etc in Cancun?