Way back in 1990 when Democrats controlled Congress, they met behind closed doors to hammer out a budget with all kinds of politics strewn throughout the process and in their final plan. Eager to score political class-warfare points with their base, whose values they seriously misread, Democrats imposed a 10 percent “luxury” tax on recreational boats that cost more than $100,000. Their misguided attempt to kneecap the wealthy was a source of pride for them. After all, anyone who could afford a yacht costing more than $100,000 deserved to be punished — right?
Now, in yet another class-warfare misfire, President Obama is rummaging for cheap political points by attempting to tax corporate jets. Apparently, if one uses a private jet, even for business, one must be punished. Obama, in fulfilling his 2008 campaign promise to “redistribute the wealth,” has determined that businesses investing in a private jet should have their current tax break for accelerated depreciation decreased. It’s a blunder that will grow the unemployment ranks, rather than shrink the deficit.
As then-President George H.W. Bush said in his 1992 State of the Union address, appealing to Democrats to stop engaging in destructive class warfare and support his budget, which included repeal of the tax, “When they aim at the big guy, they usually hit the little guy. And maybe it’s time that stopped.”
The wealthy are usually wealthy for a reason — first and foremost because they are not stupid about their disposable income. When Congress imposed a tax on yachts, the wealthy simply spent their money elsewhere: on ski condos, beach houses, and varied and sundry other recreational investments not subjected to such ridiculous class-warfare luxury taxation. So the anticipated tax revenue was never going to be achieved anyway — not that the revenue itself was ever really the point.
Were President Obama even a C student of history, he would have absorbed the lessons of the boat luxury tax and avoided the clumsy repeat with the corporate jet tax. This latest revenge-on-the-rich ruse will allegedly bring in a mere $3 billion to the U.S. Treasury over the next decade, which is barely a drop in the $4 trillion deficit-reduction bucket needed to drag the economy out of the quicksand. Yet recently, this “drop” was front and center as Obama’s key talking point, proving to all the veracity of his commitment to class warfare as a centerpiece of his reelection campaign.
But just whom does the president hope to have on his side? In a joint letter to Obama, the heads of the General Aviation Manufacturers Association (GAMA) and the International Association of Machinists and Aerospace Workers (IAMAW) expressed alarm at the proposal that is almost certain to cost jobs in their industry, which has only just begun a slow recovery. “While such talk may appear to some as good politics, the reality is that it hurts one of the leading manufacturing and exporting industries in the United States.” This, from the head of a major labor union.
Just as in the case of the boat luxury tax debacle of the early 1990s, the result of a corporate jet tax hike would never bring in the anticipated revenue — and yet again, that was never the point, anyway.
Jacobus, president of Capitol Strategies PR, has managed congressional campaigns, worked on Capitol Hill and is an adjunct professor at George Washington University’s Graduate School of Political Management. She appears on CNN, MSNBC and FOX News as a GOP strategist.