February 14, 2013
As the 113th Congress gets underway, and Washington policymakers focus on the need for serious proposals to reduce the nation’s deficit, the rhetoric from the White House on the issue has often focused on business aviation, and on the notion that deficit reduction can be had by closing “loopholes” like those provided on tax payments, or depreciation schedules, related to business aircraft.
The White House statements have prompted stern questioning not only from NBAA, but from other key allies, who have moved quickly to establish the facts about business aircraft tax policies, and also about the industry’s importance to American citizens, companies and communities.
For example, in an op-ed published by Reuters and other news outlets, Tom Buffenbarger, president of the International Association of Machinists and Aerospace Workers, called the White House’s plan a “job-killing tax provision,” adding: “Like a bad game of whack-a-mole, this short sighted idea keeps raising its ugly head, threatening an industry [business aviation] that employs 1.2 million Americans and, with most of its product exported, creates a trade surplus with the rest of the world.” Read Buffenbarger’s op-ed in its entirety.
Also weighing in was Karen Kerrigan, president and CEO of the Small Business & Entrepreneurship Council, who questioned whether focusing on business aviation would meaningfully reduce the deficit. Extending the depreciation schedule for taxes on business aircraft would not generate any new long-term revenue, she wrote in a letter published in the Feb. 12 edition of The Washington Times.
Equally troubling, Kerrigan’s letter continued, the president’s proposal “would decimate the thousands of businesses that use these aircraft for a variety of critical functions. Contrary to the contentions of some inside the Beltway, the vast majority of businesses that own and operate their own aircraft are small to mid-sized companies – middle managers, technical specialists and sales personnel, in most cases,” Kerrigan noted. “They use these aircraft to visit far-off plants in rural areas, deliver and pick up supplies and reach customers. In addition, there are thousands of communities that depend on these aircraft for important services such as law enforcement, medical care, disaster relief and other purposes.” Read Kerrigan’s letter in its entirety.
Over the course of the week, members of Congress also registered their concerns about business-aircraft depreciation claims from the president and other White House officials.
On Feb. 13, Sen. Pat Roberts (R-KS) stood up for the industry during a hearing of the Senate Finance Committee. Roberts looked to the hearing, which focused on President Obama’s nomination of Jack Lew as Treasury Secretary, as an opportunity to grill Lew about the White House’s unfavorable characterization of business aviation, and “the seemingly unending attacks this Administration continues to direct at this essential aviation industry – i.e., general aviation.” He added that “general aviation has become a ‘piñata’ in regards to tax reform by this administration, and I’m more than a little tired of it.” See Sen. Roberts’s committee hearing remarks on YouTube.
The previous day, and on the other side of Capitol Hill, Rep. Mike Pompeo (R-4-KS) took to the House floor in a forceful speech noting that depreciation schedules like those on business aircraft are, “Something that every asset in America is subject to, and yet somehow [the president] has picked on this particular depreciation schedule is offensive and antithetical to the American way of life.” Pointing to the million-plus jobs created by the manufacture and use of aircraft for business, the congressman added: “It is unexplainable why anyone would pick on this industry.” Pompeo’s floor statement followed a “Dear Colleague” letter outlining similar concerns, which he sent to every member of congress the previous week. See Rep. Pompeo’s floor statement on YouTube.
International Business Aviation Council Ltd.