Obama for Corporate Jet Tax Break Before He Was Against It
Washington (CNSNews.com) – President Barack Obama signed two bills granting special tax breaks for corporate jet purchasers before making corporate jets a key target in populist rhetoric during Wednesday’s news conference.
Obama signed the American Recovery and Reinvestment Act, better known as the stimulus act, in February 2009. In September 2010, Obama signed H.R. 5927, the Small Business Lending Fund Act. Both pieces of legislation included tax breaks to help businesses buy their own planes.
This is in stark contrast to what the president said Wednesday. Obama mentioned corporate jet owners six times as the target for needed tax hikes.
“I’ve said to some of the Republican leaders, you go talk to your constituents, the Republican constituents, and ask them are they willing to compromise their kids’ safety so that some corporate jet owner continues to get a tax break,” Obama said during the news conference.
“If everybody else is willing to take on their sacred cows and do tough things in order to achieve the goal of real deficit reduction, then I think it would be hard for the Republicans to stand there and say that the tax break for corporate jets is sufficiently important that we’re not willing to come to the table and get a deal done,” Obama said.
The stimulus bill included an incentive for companies to buy large manufactured goods including jets, known as “accelerated depreciation,” to persuade more companies to purchase planes as a means of helping the slumping aviation industry. Under the stimulus law, companies were required to place orders by the end of 2009, with a plane delivered by the end of 2010.
National Business Aviation Association President Ed Bolen was quoted by the Associated Press on Feb. 18, 2009 as praising the provision of the stimulus law. “It’s trying to give you a reason to act now, rather than sit on the sidelines for the next two years,” said Bolen, whose trade group represents the general aviation interests of 8,000 companies.
Bolen issued a statementWednesday after the president attacked corporate jet owners, saying the industry employs 1.2 million people and generates $150 billion in revenue each year. Further, he said most businesses relying on these planes are small and midsize companies flying to small towns with little or no airline service.
“The president has inexplicably chosen to vilify and mischaracterize business aviation – an industry that is critical for citizens, companies and communities across the U.S., and one that can play a central role in the economic recovery he says he wants to promote,” Bolen said in the statement Wednesday.
In September 2010, Congress passed and the president signed the Small Business Lending Fund Act. Included in this legislation was “bonus depreciation” to encourage businesses to make major purchases, including aircrafts.
“NBAA thanks President Obama for enacting this important tax provision for American businesses,” Bolen said in a statement on Sept. 27, 2010. “Now that the President has signed the measure into law, companies will be able to take advantage of the provision right away, giving them access to the benefits of business aviation.”
But in Wednesday’s statement, Bolen said, “Nine months ago, this president extolled the virtues of shortening depreciation schedules to stimulate jobs. Now he seems to want to reverse course and push ahead with punitive treatment for general aviation, an industry that creates jobs, helps companies succeed and serves communities all around America.”
This is “of course” a reversal of the president’s previous policies, NBAA spokesman Dan Hubbard told CNSNews.com.
“The bonus depreciation was going to last for a year. He championed it,” Hubbard said. “It got passed into law nine short months ago. So he hasn’t gotten through the law he introduced, championed and got passed.
“Now that his policy is enacted, we get cut off, and wipe out everything for the rest of the year, or the three months remaining in the proposal? I suppose so. Would it impact everything going forward, I suppose so. I don’t know that we know the specific details because he didn’t make them clear,” he said.
During Wednesday’s news conference, Obama continued a string of references to raising taxes on corporate jet flyers.
“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.
He later said, “if we choose to keep those tax breaks for millionaires and billionaires, if we choose to keep a tax break for corporate jet owners, if we choose to keep tax breaks for oil and gas companies that are making hundreds of billions of dollars, then that means we’ve got to cut some kids off from getting a college scholarship. That means we’ve got to stop funding certain grants for medical research. That means that food safety may be compromised. That means that Medicare has to bear a greater part of the burden.”
As the press conference continued, Obama again said, “I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up a tax break that no other business enjoys.”
He talked about the rich paying less in taxes now than in several decades.
“If you are a wealthy CEO or a health – hedge fund manager in America right now, your taxes are lower than they have ever been,” Obama said. “They’re lower than they’ve been since the 1950s. And you can afford it. You’ll still be able to ride on your corporate jet; you’re just going to have to pay a little more.”