I’m not an expert, nor am I a pilot, but I grew up in a family of aviators and know for a fact that the aviation industry—commercial and corporate—employs millions of Americans and is crucial to our economy. Unfortunately, the Obama administration fails to acknowledge this fact—or chooses to ignore it.
The latest example of the administration’s blatant disregard for jobs, the free market, and common sense comes in the form of a “user fee” that will seriously hurt the aviation industry as a whole if implemented. In the proposed 2013 budget, President Obama proposes a $100 per-flight fee for all commercial and corporate/general aviation operating in controlled airspace (piston aircraft, military aircraft, public aircraft, air ambulances, aircraft operating outside of controlled airspace, and Canada-to-Canada flights would be exempt from this fee). All aircraft, whether commercial or corporate, use the same air traffic control (ATC) services when operating within controlled airspace. The Obama administration, however, believes that everyone isn’t “paying their fair share” in taxes because corporate aviation often pays lower taxes than commercial aviation. This fee, the administration states, “[will] reduce the deficit and more equitably share the cost of air traffic services across the aviation user community.”
Taxes collected via fuel and passengers fund the Airport and Airway Trust Fund (AATF) which finances air traffic control services and the Federal Aviation Administration. And just last year, the AATF was reauthorized, providing more financial resources to the FAA and Air Traffic Control system and several aviation taxes were raised. The 2013 Obama budget proposes, clearly, to use the American aviation industry as a source of revenue to assist in downsizing the deficit.
Recently, concerned Americans—many of them pilots or aviation enthusiasts—sent a petition with over 8,000 signatures to the White House imploring the administration to “take aviation user fees off the table” and rely on the much more efficient and effective method of collecting revenue via fuel taxes. The Office of Management and Budget (specifically, Ms. Dana Hyde) responded to the petition defending the user-fee, stating:
“In a challenging budget environment, the Obama administration believes it’s essential that those who benefit from our world-class aviation system help pay for it’s ongoing operation. And we want to ensure that everyone is paying their fair share.”
Ms. Hyde goes on to state an example of how aviation taxes are unequally distributed between commercial and corporate aircraft; a commercial airliner flying from Los Angeles to San Francisco pays more in taxes than a corporate jet flying the same route using the same ATC services.
She’s right when noting the disparity in taxes paid, but to label this “unfair” shows pure ignorance of the aviation industry. Commercial aircraft are typically larger, burn more fuel, and pay taxes on the passengers they transport—transporting those passengers is the sole goal of commercial aviation. Corporate, however, does not profit from taking a passenger from point A to point B, and the aircraft is typically smaller and privately owned. The administration fails to see that commercial and corporate aviation pay varying amounts in taxes for the simple fact that they’re two very different types of aviation serving different purposes.
If this user fee is implemented, it will undoubtedly cost American jobs. The Air Transport Association predicts that this tax would cost nearly 10,000 direct passenger and cargo airline jobs and 180,000 jobs just in the year 2012. Small and mid-size businesses and their aviation departments would also feel the painful effects of this tax, and would be forced to downsize, costing more jobs in corporate aviation as well. You’d think the administration would find those probable job losses alarming when facing an already-depressing unemployment level, but ensuring that everyone pays their “fair share” seems to be priority over American jobs.
This user-fee would further hinder the free market. Most likely, a government agency would need to be formed to supervise the collection of these taxes. Sure, that government agency may create a few public-sector jobs, but it’d be irrelevant in comparison to the quality private sector jobs this user fee would demolish. Further, the current method of collecting taxes on commercial and corporate aviation—fuel taxes—is arguably the most efficient method of taxing this industry. A fuel tax is nearly impossible to evade, it is seamlessly collected upon refueling aircraft, and aircraft are taxed based on how much they use. Burn more fuel, pay more taxes. These taxes are intended to fund the Airport and Airway Trust Fund; they do so effectively. Why fix something that isn’t broken?
The proposed 2013 budget states that this user-fee is estimated to generate $7.4 billion over ten years, and would “help reduce the deficit.” With a national deficit currently over $1.3 trillion, is $7.4 billion really going to make a dent, considering the job loss that would be associated with that $7.4 billion? In essence, the Obama administration is taking advantage of an industry that contributes employment and revenue to our economy to make up for the federal government’s fiscal irresponsibility over the last couple years.
I sincerely hope the President acknowledges the value that the aviation industry brings to the American economy, and I hope he puts American jobs over his idealistic, detrimental crusade to ensure everyone pays their “fair share.”