President Joe Biden has put forth a proposal to significantly raise fuel taxes for private jets. The administration frames this move as a matter of fairness when compared to airline passengers who already pay special taxes on each ticket they purchase.
The U.S. Department of Transportation has released a budget request of $109.3 billion, which includes a proposal.
The future of the proposal in Congress remains uncertain. Numerous budget ideas put forth by Biden are likely to be met with opposition in the Republican-controlled House. The leading business-aviation trade group has expressed its disagreement with the proposed increase in targeted fuel taxes, arguing that private jets play a vital role in fostering company success and job creation.
The White House has allocated a substantial amount of money, totaling approximately $22 billion, to the Federal Aviation Administration (FAA). This funding will be used for various purposes, including the recruitment of at least 2,000 new air traffic controllers and the replacement of outdated FAA facilities. According to FAA Administrator Mike Whitaker, the average age of these facilities is currently 40 years old. Both Democrats and Republicans in Congress have shown their support for increasing the number of air traffic controllers and safety inspectors within the FAA.
The budget allocates $62 billion for the maintenance and improvement of roads and bridges, as well as $3.2 billion for railroad infrastructure, inspections, and the Amtrak passenger-rail system.
The tax on fuel used by private jets would be gradually increased over the span of five years, from approximately 22 cents per gallon to $1.06 per gallon. This increase, as proposed by the Transportation Department, aims to provide a more stable funding source for the Federal Aviation Administration’s management of the national airspace. Currently, airline passengers bear the majority of the cost for this management.
Airline passengers are required to pay a 7.5% excise tax on their tickets, along with an additional levy of up to $4.50 per flight. These charges are specifically allocated towards funding airport projects.
According to the administration, private jets make up only 7% of all flights managed by the FAA. However, they contribute less than 1% of the taxes that support the federal trust fund for aviation and airports. The Transportation Department has estimated that the proposed policy could generate $1.1 billion over a span of five years.
In his State of the Union address last week, President Biden hinted at the proposal to increase the minimum income tax on corporations.
“I want to put an end to tax breaks for big pharma, big oil, private jets, and excessive executive pay,” he asserted to Congress.
According to Ed Bolen, the president of the National Business Aviation Association, Biden’s actions were deemed unfair.
According to him, business aviation plays a crucial role in America’s economy and transportation system. It not only creates jobs and connects communities but also contributes to the success of companies and provides humanitarian assistance during times of crisis. Instead of criticizing it, he believes that this industry should be supported and encouraged.
