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Quote of the Day: Taxpayer Privacy and IRS Abuse

At CFIF, the issue of improving taxpayer privacy and protection against persistent abuse by the Internal Revenue Service (IRS) remains among our most important missions.  Among the abuses that we've chronicled is the case of convicted criminal Charles Littlejohn, who rejoined the IRS in 2017 with the specific purpose of illegally breaching and leaking the private tax returns of Donald Trump and other Americans to radical left-wing organizations like ProPublica.

In The Wall Street Journal this week, one of those victims speaks out on his own experience and the need for greater taxpayer protection against this recurring problem that should terrify all Americans of every political persuasion.  Ira Stoll, whose tax information was passed to ProPublica, even helpfully details how…[more]

May 29, 2024 • 11:28 AM

Liberty Update

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Corporate Jet Tax Will Kill Manufacturing Jobs Print
By Ashton Ellis
Thursday, September 22 2011
A casual observer might think Obama’s jet fixation is just a petty way to look tough on so-called fat cats with deep pockets. But it’s not Warren Buffett and his ilk who are crying foul. It’s the aviation unions.

With President Barack Obama threatening to raise taxes on corporate jet purchases, members of private aviation unions are wondering why their manufacturing industry is being singled out for punishment. 

In a June 29 speech about cutting the deficit, President Obama said six times that buyers of private jets should pay more for the privilege.  Since then, the president has repeatedly lumped together oil companies, private jet owners and faceless “millionaires and billionaires” in public remarks designed to build a wedge between everyday Americans and fiscal conservatives opposed to tax increases. 

There’s more.  As part of his latest deficit reduction plan, the president called for imposing a $100 tax per takeoff or landing for simply using a private jet on the pretext that flyers don’t “pay their fair share” of Federal Aviation Administration operating costs. 

All told, Obama’s jet levies would total little more than $3 billion over the next 10 years in added revenue, a tab even the White House admits is more symbolic than substantive since the budget deficit is measured in trillions.

Still, a casual observer might think Obama’s jet fixation is just a petty way to look tough on so-called fat cats with deep pockets.  But it’s not Warren Buffett and his ilk who are crying foul.  It’s the aviation unions. 

“I think it’s just insulting,” Steve Rooney, president of District 70 of the International Association of Machinists and Aerospace Workers, told the Associated Press (AP).  “He acts like it is just a luxury for somebody to own a business jet when they’re used as tools.  And I don’t think he realizes how many people that this industry employs and how much revenue is brought in here from those types of aircraft.”

Indeed, private jet manufacturers Cessna and Hawker Beechcraft, both located in Wichita, KS, have seen their workforces plummet during the recession.  According to the General Aviation Manufacturers Association, Hawker reduced its employee levels by a third since 2008 (9,000 to 6,000), while Cessna cut half its workforce (16,000 to 8,000) during that time.  Industry wide, private jet makers have shed 20,000 workers since 2008. 

Other aviation groups have weighed in as well.  The General Aviation Manufacturers Association expressed “deep concern” to Obama’s proposed tax changes.  The head of the National Air Transportation Association said he “is appalled by President Barack Obama’s attacks on general aviation.” 

And for good reason.  Under current law, corporate jet owners can deduct the cost of their purchase from their income taxes for five years.  Commercial airlines must do so over seven years.  The policy helps encourage purchases of American-made aircraft among business clients that need and can afford more options in air travel.  But by equalizing the depreciation schedules in favor of the longer interval, Obama’s plan amounts to a tax increase that may dissuade some companies from buying private jets.  That, in turn, could lead to a new slowdown in manufacturing and more layoffs. 

Stressing that American-made private jets “are one of the few remaining manufacturing industries left in this country,” Shawn Vick of Hawker Beechcraft told the AP that “it would seem to me it would be important to help us grow, not put impediments to our growth in place.” 

Rep. Mike Pompeo (R-KS) agrees.  “[The President’s] rhetoric kills sales of American manufactured goods, and with them the jobs that are created when those airplanes are built,” he warned on the House floor two days after Obama’s $100 fly fee proposal.  

Luxury goods providers have seen this movie before.  As part of his much maligned 1990 budget, President George H. W. Bush broke his 1988 campaign pledge not to raise taxes.  One of those increases was a 10 percent sales tax on yacht purchases.  The result was to deepen the impact of the recession then driving down sales, eventually forcing layoffs of thousands of yacht builders as buyers fled the market. 

Note to President Obama: Those yacht jobs did not return. 

In response to Obama’s first swipe at killing working class jobs associated with the private jets, Senator Marco Rubio (R-FL) said that the president was sounding more like a Third World leader than America’s chief executive.  If Obama succeeds in ruining one of the last bastions of American manufacturing to make a symbolic political point, he’ll turn rhetoric into reality. 

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— Natalia Mittelstadt, Just the News
Liberty Poll   

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