By Keith Laing - 09/27/11 03:07 PM EDT
Corporate jet owners are fighting back at President Obama, who has made them a poster child for tax reform.
The Alliance for Aviation Across America, which represents non-commercial business aviation, says Obama should stop his criticism of corporate jets owners and drop his plans for imposing user fees on their air travel.
The Washington, D.C.-based group argues Obama’s proposed user fees would hurt the economy and cost jobs.
“The president has consistently referred to businesses that use general aviation aircraft as wealthy CEOs who deserve additional taxes,” Alliance Executive Director Selena Shilad said on a conference call Tuesday. “It makes no sense to move from the existing fuel tax mechanism.”
The group released a letter on Tuesday signed by mayors in 43 states calling on Obama to leave corporate jets out of his populist pitch to voters.
Obama has been barnstorming the country in support of his jobs bill, which he proposes to pay for with higher taxes on the wealthy.
As part of the deficit-reduction suggestions the president made recently to the supercommittee of lawmakers tasked with cutting $1.5 trillion or more from the federal deficit, Obama proposed a per-flight fee on private aircraft that could be as high as $100.
The administration has said the fee would generate $11 billion over 10 years.
Obama has backed up his proposal to high corporate jet owners with higher fees with tough rhetoric against Republicans.
During the debate over raising the federal debt ceiling this summer, the president frequently accused Republicans of preferring to preserve tax breaks for wealthy private jet owners than average Americans. In one news conference, he invoked tax breaks for corporate jet owners six times in about an hour’s worth of remarks.
But members of the Aviation Alliance, including mayors of small towns whose airports handle a large share of private airplane traffic, warn that all noncommercial plane users are not wealthy.
“I cringe every time these types of comments are made,” said Carl Brewer, the mayor of Wichita, Kansas.
Wichita is home base for several major private aircraft manufacturers like Cessna and Beechcraft, and is nicknamed “the Air Capital of the World.” Brewer said the general aviation industry generates $10.4 billion of economic activity and 47,000 jobs in Kansas alone.
That makes Obama's remarks and tax proposals “something that's a real challenge for us in the state of Kansas,” he said.
Obama's jobs plan is estimated to cost $447 billion. To pay for the bill and further reduce the deficit, Obama has proposed ending the Bush tax rates for wealthier taxpayers. He also wants to institute a “Buffett rule,” named after billionaire Warren Buffett, to ensure millionaires and billionaires don’t pay a smaller portion of their income in taxes than the poor and middle class. It’s unclear how the Buffett rule would work in practice.
The moves by the president have been widely interpreted as a pivot toward traditional Democratic economic populism - and away from any effort to actually compromise with Republicans.
The aviation alliance argues the general aviation tax structure is not in need of reform.
“User fees would impose an unfair regulatory and financial burden on the millions of Americans who depend on small planes for their livelihood, and have the potential to ground small aircraft,” the alliance says on its Website. “AAAA opposes this tax structure and supports the current ‘pay at the pump’ fuel tax system, as it is the simplest, most efficient way to pay into the Airport and Airways Trust Fund.”
The group said that it was responding to Obama’s remarks about private airplanes Tuesday because of the tax proposal, but Brewer said the president has always singled out private planes for ridicule.
The alliance, which was founded in 2007, began raising its concerns “immediately after the president was elected,” Brewer said, “and we’ve been addressing them every time he’s made these comments.