Private jet owners label Obama proposal to increase take-off fees a tax

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The Obama administration has not said much about the private jet take-off fee proposal since the supercommittee failed to reach an agreement on budget cuts at the end of last year. The administration has focused mostly on automatic across-the-board cuts Obama had argued proposals like the take-off fee would help stave off, although the proposal was included in the president's 2013 budget proposal.   

That has been enough for supporters of general aviation, as non-commercial flights is commonly known as, to raise the specter of the proposal being implemented. However, the proposal was not included in recently approved legislation for both transportation spending and the Federal Aviation Administration. 

That did not stop King, who was testifying Wednesday on behalf of the National Business Aviation Association, from telling lawmakers that increasing the take-off fee would be a bad idea. She said the current system of charging private jets owners taxes based on their fuel use has been effective. 

"Today, business aviation pays at the pump through a per-gallon fuel tax. It is simple," she said. "It is fair. It is efficient. It is progressive. It is environmentally friendly. And it is adjustable." 

Lawmakers on the Small Business Committee largely agreed. 

"Imposing such a plan has the very real potential to stifle the general aviation industry as a whole and harm job creation," committee Chairman Rep. Sam Graves (R-Mo.) said.

"The general aviation industry is predominantly made up of small businesses," he continued. "Annually, it accounts for about 27 million flight hours and carries 166 million passengers to around 5,000 communities." 

Of the inclusion of the proposed take-off fee in Obama's 2013 budget, Graves said "[U]nfortunately, this is not a new proposal.  

"Previous presidents have suggested a user fee system for aviation, in addition to the current taxes and fees already levied, as a way to bolster the Airport and Airways Trust Fund," he said. "Fortunately, these proposals have never been enacted and today, we’re going to discuss how important it is that they never are." 

Obama has generally cast the take-off tax proposal as part of his campaign to ask wealthy citizens to pay a more "fair share" of U.S. taxes. 

"The tax cuts I’m proposing we get rid of are tax breaks for millionaires and billionaires; tax breaks for oil companies and hedge fund managers and corporate jet owners," Obama said during a news conference last summer that drew sharp rebukes from general aviation supporters. 

Republicans on the Small Business Committee brought in a panel full of business owners like King on Wednesday to counteract that point from president. 

Brad Pierce, owner of Orlando, Fla., business Restaurant Equipment World told the panel that he considered his airplane to be "one of my best employees." 

"It has consistently allowed me to expand the boundaries of our service area because we can reach potential clients fast, even when they are located hundreds or thousands of miles from our Orlando headquarters," said Pierce, who was testifying on behalf of the Aircraft Owners and Pilots Association. 

"I have personally flown our aircraft to 49 states," Pierce continued. "We utilize our aircraft to maintain existing relationships, attend industry events and pursue new business for our company. And because the airplane allows us to set our own travel schedule, we can stay on site to make sure our business interactions are complete and our clients are satisfied; we don’t have to worry about catching a flight." 

George Mason University Center for Transportation, Policy, Operations and Logistics Director Kenneth Button told the panel that user fees for aviation had merit, but the $100 amount was "arbitrary." 

"The broad conclusion is that in principle user charging has merit in terms of ensuring better use of existing infrastructure and in facilitating better decisions regarding its capacity, but that a $100 surcharge per flight on users is confusing and probably not helpful in moving towards genuine economic user fees," Button said.

Graves argued, however, that "[I]mposing a $100 per flight user fee on operators is simply the wrong approach. 

"The president offered few details as to how such a system would be established and even less analysis of how it would impact the aviation industry," he said. "I believe this is bad policy, and there is little doubt it would stifle job creation and economic growth in the United States." 

Obama's budget recommendation also included a $7.50 increase in the security taxes commercial airline passengers pay each way on trips. However, that proposal was similarly opposed by the airline industry, which argued it would cost companies $36 billion.