A reprint of an article released by Lachlan Markay on June 29, 2011
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 reauthorized 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.
The Associated Press noted the tax break’s potential economic benefits in this February 2009 report:
Just a few months after lawmakers scolded auto executives for flying to Washington in private jets, Congress approved a tax break in the stimulus package to help businesses buy their own planes.
The incentive — first used to help plane makers recover from the 2001 terror attacks — sharply reduces the up front tax bill for companies who buy assets like business planes.
The aviation industry, which is cutting jobs as it suffers from declining shipments and canceled orders, hopes the tax break in the economic-stimulus bill just signed by President Barack Obama will persuade more companies to buy planes and snap a slump in general aviation that began last year.
“This is exactly the type of financial incentive that should be included in a stimulus bill,” said Rep. Todd Tiahrt, R-Kan., in an interview. His state lost at least 6,900 jobs at Cessna and Hawker Beechcraft, both based in Wichita.…
The incentive — known as accelerated depreciation — lets companies take a larger deduction in the early years of the life of an asset such as a plane.
Let me refresh your memory. The Dems were against allowing those tax deductions to continue, yet they COMPROMISED in order to get the GOP to vote on the stimulus. However the GOP doesn't even seem to be willing to compromise in order to save the countries credit. H Reids plan, that the GOP has said isn't good enough, gives EXACTLY what the GOP said it wanted. Cuts that match the debt extension, NO revenues and includes cuts in medicare. Yet NOW they won't vote for it! Seems to me their only interests is Obama's failure to achieve anything at ALL costs.
I will not debate the mistakes of your statements for you are following Dem talking points instead of reading what is really going on. Before you claim I am on the right Do not bother. I do not follow either party or their taliking points. I do research to see the facts.
Staying on topic, Obama is not for making serious cuts in the budget. He can spout Jet tax loophole all he wants. It only goes to show how uninformed he is. The CBO did a reort and the Credit if revoked only save $30 million per year, as opposed to $4.6 billion that is added to the national debt everyday. EVERY DAY.In addition, it will cost thousands of jobs, 6,900 in whitchita alone. Add up the unemployment benifits for all of those who lose their jobs and will cost the US Government more than what we would save in repealing the tax cut. Just one example why tax cuts work and put people to work
So true Danny. Sad but true. I fear for my beloved country. My ancestors have been here since the beginning. They would be very upset right now at the amount of stalling and downright unwavering stubbornness of today's politicians. We are at a crossroads and it doesn't look good.
by fishskinfreak20088 years ago
So President Obama's approval rating after one month is...only 68%. Our expectations of him on Inauguration night were too high. His approval rating back on Jan. 20 was around 80%.
by rlaframboise7 years ago
Do you think Obama actually believes in the merit of the Constitution or do you think that he thinks that the chains i places on the Federal government are a bad thing?I for one think he would love to see a purely...
by MikeNV7 years ago
When these Tax "Breaks" expire... you know the ones put into place by that Evil Bastard Bush...Will they not effect those under $250,000? Of course Obama can just say he didn't raise them... he just let...
by MikeNV7 years ago
The Associated Press released a story today... an anti-republican, pro Obama piece about jobs created with stimulous money in South Carolina in a mostly Republican area."The new hires came from a broad area...
by Nickny798 years ago
HIGH tax rates reduce economic growth, because they make it LESS profitable to work, save, and invest. This translates into less work, saving, investment, and capital--and ultimately fewer goods and services. Reducing...
by Judi Burton6 years ago
I find this argument sound and wonder at how republicans can be serious about the possible demise of the US Treasury Bond for the sake of taxes for the top 1% of the wealthiest Americans. Economists are flabbergasted...
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