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News Outlets Again Challenge White House’s Business Aviation Tax Claims

April 12, 2013

News organizations are not letting the White House’s business aviation rhetoric and policy proposals go unchallenged. Already, The Washington Post and Politico have run articles or blog posts sternly questioning the Obama Administration’s budget proposal targeting business aviation. The latest outlets to renew questions about the proposal are The Washington Times and Newsweek/The Daily Beast.

In an April 8 article titled “Ending Tax Loophole for Private Jets Will Hurt More Than Help,” The Washington Times looked into the full story after White House spokesman Jay Carney again suggested Congress has a choice between protecting “corporate jet owners” and average Americans.

“For one thing, the so-called tax loophole the White House likes to bash applies to all aircraft except commercial airlines,” including small airplanes and helicopters, according to the Times’ report. Furthermore, the article points out a simple fiscal reality that NBAA has long made clear: “The revenue produced by ending the tax break would amount to only a drop in the nation’s deficit-reduction bucket.”

The article notes business groups and labor unions alike have urged President Obama’s administration to cease their repeated attacks on business aviation, and that the provision enabling business aircraft to be depreciated over five years rather than seven “has been a part of the tax code since 1987.”

Meanwhile, at The Daily Beast website, which is owned by Newsweek, special correspondent Megan McArdle likewise echoes long-standing NBAA arguments about the Obama administration’s rhetoric and proposals for business aviation, in an April 10 post, titled “Tax Breaks for Corporate Jets: The Non-Issue at the Heart of the Presidential Agenda.” In her piece, McArdle takes a detailed look at the White House’s accounting assumptions for estimating the revenue that might be raised from changing the depreciation schedule for business aircraft – and finds them on shaky ground.

“The phrase ‘tax breaks for corporate jets’ implies that we're giving companies some extra subsidy for buying swank private planes. We're not,” writes McArdle. “This is a quibble over a technical accounting adjustment that in the end, just doesn't make that much difference one way or the other.”

McArdle concludes the proposal serves no purpose other than as a political talking point.

“It’s encouraging to see that the allegations from White House are not going left unchallenged, not just by news organizations, but also members of Congress, labor leaders, small business champions and others,” said NBAA President and CEO Ed Bolen.

To illustrate his point, Bolen pointed to just a few examples of recent investigations by reporters into the Obama administration’s claims and policy proposals regarding business aviation. Last month, the administration’s allegations didn’t completely clear the factual bar with The Washington Post’s Fact Checker blog, which gave the White House’s budget proposal a “Pinocchio” for telling a selected version of the truth, with notable omissions and exaggerations. Just weeks before, Reuters, Politico, and even local news outlets like Wichita, KS, ABC affiliate KAKE-TV all gave the proposal similar scrutiny, and also highlighted its impact on employment in the aircraft manufacturing industry.