Obama blasts private jet tax breaks created by his own stimulus

From the Heritage Foundation, my favorite think tank.

Excerpt:

The chief economic culprit of President Obama’s Wednesday press conference was undoubtedly “corporate jets.” He mentioned them on at least six occasions, each time offering their owners as an example of a group that should be paying more in taxes.

“I think it’s only fair to ask an oil company or a corporate jet owner that has done so well,” the president stated at one point, “to give up that tax break that no other business enjoys.”

But the corporate jet tax break to which Obama was referring – called “accelerated depreciation,” and a popular Democratic foil of late – was created by his own stimulus package.

Proponents of the tax break lauded it as a means to spur economic activity by encouraging purchases of large manufactured goods (planes). So the president’s statement today – and his call to repeal that tax break generally – is either a tacit admission that the stimulus included projects that did not, in fact, stimulate the economy, or an attempt to “soak the rich” without regard for the policy’s effects on the economy.

For many Americans, those effects could be dramatic. Cessna and Gulfstream have facilities in a combined 15 cities nationwide (and another four abroad). A significant decline in consumption of private jets would undoubtedly have adverse effects on at least some of those local economies. Given the sizable bump in consumption that the initial tax break yielded, its repeal would likely have that economic domino effect.

Rightly or wrongly, any increase in the taxes paid by any US-based business is going to result in higher prices for consumers, or layoffs, or both. Even talking badly about businesses causes them to feel uncertain about the future. And when businesses are uncertain, they don’t hire people and they don’t expand. Obama’s solution to the recession created by the Democrat housing policies was to take money from the private sector and blow it on the public sector. Private companies realize that the bill is going to come due soon, and they are sitting on their money in case Obama succeeds in his plan to raise taxes on businesses.

 

3 thoughts on “Obama blasts private jet tax breaks created by his own stimulus”

  1. I don’t see how your conclusion follows from your given example – companies will lose tax breaks on private jets – very expensive to buy, very expensive to maintain, very expensive to insure, very expensive to house, very expensive to operate, and very expensive to man (needs a pilot and copilot and at least one stewardess – you don’t think the CEO’s will pour their own drinks do you?), hence they won’t buy jets, saving tens of millions, hence prices on their products will increase….really? where’s the logic? I can see layoffs from makers of corporate jets and their suppliers. You also have failed to make the argument of why they should be subsidized for making a luxury purchase.

  2. JERRy..well in Florida they put in a lux tax.. It closed down our yacht business and cost 1000s of jobs and lost more in taxes than it gained.. They said when they passed it. I don’t see how a lux tax to yacht buyer would effect his decision to buy a yacht.. The tax was finally repealed and new yacht companies came back to Florida.

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