Aviation justice and the debt ceiling
By Michael R. Shannon
web posted July 11, 2011
In contrast with his recent actions in Libya, Barack Hussein Obama, stalwart class warrior, has declared non–kinetic action on corporate jet owners and is asking for Congress' help in promoting the conflict.
Obama's thinking has not evolved to the point where he wants to employ drone strikes on corporate jets, but he does want to end a tax break for jet owners as part of the negotiations surrounding a legislative package to raise the US debt ceiling from its current level of "extremely heavy" to the new level of "crush you and your grandchildren."
The tax break allows corporations that use these jet–powered sedan chairs to depreciate the purchase price over five years. The President wants to change that and treat corporate jets the same way Continental Airlines' jets are treated and extend the depreciation over seven years, instead of five.
For homeowners whose only experience with owning aircraft involves balsa wood and glue that's impossible to get off your fingers, it would be like depreciating the cost of your car over seven years instead of five.
Wait, Middle America doesn't get to depreciate cars. Deducting your house? No. Flight to grandma's? Negative. Dry cleaning cost to remove wrinkles and fingerprints after being felt up by that nice man at TSA? Nope.
OK. There's no equivalent analogy for the average taxpayer. We aren't high–flying plutocrats with specially designed tax loopholes, which makes it all the more imperative to eliminate this deduction. What's more, Republicans are blameless and don't have a dog in this fight.
Jonah Goldberg reminds us this deduction was passed as part of Obama's stimulus bill and no Republicans in the House voted in favor and only three RINOs in the Senate said "Aye." If Obama wants to do the John Kerry Cha Cha (for it, before he was agin it), then help him do it. Using our leverage during negotiations to correct Democrat spendthrift ways by cutting spending and eliminating subsidies is an important part of the debt increase process.
Unfortunately, many Republicans and conservatives (not always one and the same) are throwing away this golden "bipartisan" opportunity because many of these "brilliant lawyers who could make millions in the private sector" neglected to read the fine print before they signed Grover Norquist's Taxpayer Protection Pledge.
Most of them understood the part about not voting to raise taxes. What is tripping them up now is the clause that requires them to oppose "any net reduction or elimination of deductions and credits, unless matched dollar for dollar by further reducing tax rates." As my former tenant and current AP reporter Charles Babbington points out this means tax pledge signers can't vote to eliminate a gold–plated subsidy for corporate jets because in this instance cleaning up the tax code has the side effect of increasing revenue. Normally a good thing when one is in debt, but you aren't Grover Norquist.
This was the same objection the Tax Taliban was using to fight the Senate amendment to end the ethanol subsidy. For a while it looked like it would be easier to persuade the Senate to divert all the nation's corn supply to the manufacture of moonshine than it would to end the free–market distorting, economically insane policy of feeding corn to cars rather than cows.
But the unthinkable happened and 34 of the Senate's 47 Republicans (some of them potentially future presidential candidates who will have to visit Iowa!) voted for the first time to terminate the corn cash grab.
Then we had one of those beltway moments where the self–important take on the authentic. Norquist criticized Sen. Tom Coburn (R–OK), a genuine and principled conservative, for orchestrating the anti–ethanol vote.
Coburn's response was the GOP was willing to do the right thing "regardless of what Grover says."
Norquist, the leader of the Tax Taliban and a supporter of the "fair tax" or the "flat tax," is philosophically inconsistent on this issue. He says, "I would urge candidates to call for moving to a single rate tax that taxes income one time at one rate." And adds, "there is no pressing need to design the perfect tax reform." Which implies to me that he is willing to support interim steps.
Yet Norquist opposes ending the ethanol subsidy and the corporate jet subsidy. Both of which are votes and steps that will help reform the tax code by treating the same equipment equally -- like a flat tax -- and end special breaks for special people -- mostly those who can hire lobbyists.
Eliminating an unfair subsidy is not a tax increase; it's a fairness increase. The added revenue is a by–product and should not deter conservatives from their goal of overall tax reform and spending cuts.
Michael R. Shannon is a public relations, advertising and political consultant with experience around the globe. He is also a popular speaker and can be reached at michael–firstname.lastname@example.org.
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