Taxpayers Subsidize Jetset Lifestyle of the Rich and Famous

Food for Thought

Anyone who lives or works around San Jose Airport (SJC) is used to seeing the constant stream of jets arriving and departing. If you look carefully, you’ll notice that in between the usual airline company planes, there are just as many, if not more, unmarked jets of various sizes. These are the rides of the wealthy elite of the corporate plutocracy. You know, the ones who own (George Carlin RIP) this country and are much too important to stand in security lines and sit in Ken-and-Barbie-size coach seats like the rest of us; the one percent at the top who got there and stay there by taking what they can from the 99 percent of the rest of us.

You are probably thinking: “Fair enough. The captains of Silicon Valley and other industries probably pay through the nose for those jets.” Well, think again.  According to a report from the Institute for Policy Studies, we taxpayers—that 99 percent of the rest of us I was talking about—are subsidizing this elitist lifestyle toy. So not only do we nearby residents have to put up with being awakened at all hours of the night as these snake-oil capitalists return to SJC from their weekend trips to Maui and Superbowl soirees at 3 am, but we pay for them to do it.

For example, the buyers of these jets, costing anywhere from $40 million for a “common” Gulfstream to hundreds of millions for a Boeing 757, get a bonus depreciation, allowing them to take a large tax deduction in the year of purchase, thanks to the 2008 Economic Stimulus (sic) Act provision advocated by the private jet lobby. There are further various tax breaks in succeeding years. Corporate officers using the company jet for pleasure pay income tax on receiving the “gift” but at the value of a low-cost commercial ticket for the same trip, not the true cost of the flight which is astronomically higher. Non-commercial aviation uses 16 percent of the FAA’s services but pays for only 3 percent of the costs. The taxpayer also subsidizes the building and maintaining of airports for these jet owners.

The environmental costs are also considerable, according to the report. A typical passenger on a corporate jet is responsible for more than five times the pollution of a passenger on a commercial flight. Even worse, these planes often deposit CEOs somewhere for a couple of days, return home empty and come back that way again to pick them up. If you think your neighbor with a Hummer is burning a lot of gas, you should get a load of the fuel usage per person of some of these private jets. An hour of flying in one uses the same amount of fuel as a typical automobile in an entire year.

We are obviously stuck with having to put up with these symbols of elitism and conspicuous consumption—for the moment. Why should we also put up with subsidizing them? At the very least, the jet-owning rich and famous must be made to pay their own way and not be allowed to continue to inconvenience the rest of us by coming and going at all hours of the night. The report suggests a few remedies that I can get behind. All tax breaks should be stopped, fees raised to pay for actual usage of taxpayer-financed services, and luxury taxes imposed on ownership. Corporate-welfare-supported magnates get enough free rides and have plenty of our money already. Let them pay their own way for once.

28 Comments

  1. Jack:

    Obviously, you read the report from a left-wing source at:
    http://www.ips-dc.org/getfile.php?id=228

    This article describes the business aviation industry’s response:
    http://www.airportbusiness.com/interactive/2008/06/25/another-report-bashing-business-aviation/

    Actually, I agree that business aviation needs to pay more. ATC charges should be levied on a per-flight basis since a Gulfstream or Citation takes as much ATC resources as a 747-400 but carries a fraction of the passenger load. Furthermore, landing fees, calculated by weight, should be based on time of day so that you don’t get little private planes landing at JFK during the middle of the evening departure push.

    Another wasteful aviation fat-cat subsidy program is the “Essential Air Service” program, discussed in this article:
    http://www.usatoday.com/news/washington/2007-12-30-cheap-flights_N.htm

    Who benefits from EAS flighes? Politicians from smaller states. Therefore, EAS will continue to suck up taxpayer money subsidizing the fat cats.

  2. Jack:

    Do you truly support the removal of “all tax breaks” or just those provided to the individuals and corporations that provide jobs, products and substantial community and charitable services?

    If we are having a serious discussion about removing all tax breaks, be sure to include the earned and low income credits, child and dependent care credits, education expense credits, credits for the elderly and disabled, classroom expense credit for teachers and a host of others.

    If everything is truly on the table, I would be up for a full and comprehensive review of reforming our tax system. However, if this is just another one of your rants about the evils of corporations, we can forgo the tax discussion and move on.

  3. This sounds like a good first step, komrade.
    Later on as our Party gains strength we’ll confiscate their mansions in the suburbs and force them to live like socially responsible citizens-in high rise hovels next to the transit mall.

  4. Sometimes I wonder why I take the time to read these posts.  This was a joke right?

    Of course we shouldn’t have to subsidize private jets, or anything else in the private sector.

    However, I highly doubt you really support the idea of taxes being equitable to EVERYONE?

    If that were the case, you wouldn’t be able to demonize and take from one group and give to others.  Even worse, you wouldn’t be able to look and feel so noble as you do it.

  5. Hugh #3

    Thanks for providing those links.

    Mark #4

    I am with you. We badly need to reform our system of government spending and taxation and every proposed expenditure ought to be out in the open on the table in full view of every citizen. But we’ll have to fight the jet-owning rich elite and their bought-and-paid-for government representatives to get there.

    John #7

    I am not advocating taking away their toys and I didn’t say that. I just think the rich owners ought to pay their own way. Are you saying that you don’t mind the government subsidizing billionaires with your tax money? Or maybe you are a recipient yourself? If that is the case, you know that the jetset lifestyle subsidies are small potatoes compared to some of the other ones the wealthy get.

  6. Always a chuckle how the paranoid group on this blog always finds a way to simplify an issue into Right” and “Left”. As long as you suffer from this malady, we will continue to suffer as a nation.
    Let’s look at this for the problem it is. The “Right” seemingly doesn’t care about these issues, and although the “Left” seems to care more that doesn’t mean they can’t be hypocritical while trying to affect positive change.
    Neither group has total righteousness on their side. We should try to elevate the level of discussion beyond trying to trash one side or the other.I know there are a few consistent contributors to this site who are incapable of that, but perhaps the rest of us can try to solve the problems before us without trying to color them “Left” or “Right”.

  7. This kind of reads like an Obama speech. I’m outraged, resent ‘them’, but still have only a vague idea of who ‘they’ are.

  8. MC, despite the obvious left-wing bias of some of the writers here, bizav subsidies are a valid issue. You don’t have to be a flaming left-wing socialist to see that the corporate jets take up airspace and use ATC services without paying their fare share. Meanwhile, our out of date ATC system never gets modernized, partly due to FAA stupidity.

  9. #12 Hugh: Agreed. My point, and apparently I did not make it well, is the blog is so loaded with personal bias that the main issue becomes obscured.

  10. When I read phrases like:

    “the wealthy elite of the corporate plutocracy”

    “the one percent at the top who got there and stay there by taking what they can from the 99 percent of the rest of us”

    and my personal favorite: “snake-oil capitalists” we know this is not a serious discussion about aviation regulations or taxation.

  11. Jack,
    You say you weren’t “advocating taking away their toys” but it sure sounded that way to me. In the article you wrote, “We are obviously stuck with having to put up with these symbols of elitism and conspicuous consumption- for the moment”. That “for the moment” part makes it sound as though you hope that a day will come when we do NOT have to “put up” with them.

    I do not resent “subsidizing” the lifestyles of these billionaires any more than I resent subsidizing the millions of slackers and non-contributors on the low-income side of the scale and the millions of parasites in “public service” jobs. I don’t think for a minute that just because Meg Whitman or John Chambers pays MORE tax that that will mean that I will pay LESS – and if you believe that it works that way then you need to get right back on that turnip truck.  It is my observation that the more revenue our government takes in, weather it be federal, state, or local, the more they screw things up. So I don’t care who is lucky enough to stiff these meddlesome, corrupt bastards. I WISH it was me, but if it has to be Larry Ellison then I say, “good on ya!”

    The bottom line is that the answer to all your “unfairness in taxation” concerns lies in the idea of LIMITED GOVERNMENT. If the overall tax burden is lower then there will be no need for we Americans to squabble over who’s paying how much.

  12. John #14

    This particular issue isn’t so much a squabble over “who’s paying how much” but “who’s getting how much” and for what.

    I can certainly sympathize with your frustrations with the state of government in our country. You say you believe that it’s a good thing for the rich to bankrupt the government so we can get rid of most of it. You may get your wish soon, thanks to disasterous corrupt leadership (as you point out), and the trillion dollar wars of aggression, mortgage and banking industry boondoggles and bailing out failing Wall Street corporations. We may not end up with utopian anarchy though.

  13. Hugh #16

    Sorry. I should have said $2 trillion war of agression in Iraq (where there were no First WTC, Cole, African embassy, 9/11 terrorists) because it’s looking like that now. Meanwhile, if you have been following the news (not the propoganda coming from the serial liars in the White House), you will know that we have been getting our butts kicked by the Taliban in Afghanistan where the real terrorists who attacked us that you speak of are. Furthermore, our overwhelmed soldiers in Afghanistan will not be getting any relief according to our own generals because the rest of our available forces are fully committed in Iraq in order to protect the oil deal for Bush’s and Cheney’s corporate buddies that is the real priority.

    Wake up, Hugh. You have been hoodwinked by the usurperous Bush Crime Family and their Congressional enablers. Read the Declaration of Independence like I suggested in today’s column and you’ll see what I mean.

  14. Jack:

    I’m not buying your leftest propaganda. Iraq/Afganistan should not be an either/or question. I don’t object to the Iraq war, because as Douglas Feith put it, “President Bush inherited a worrisome Iraq problem from Bill Clinton and from his own father. Saddam had systematically undermined the measures the U.N. Security Council put in place after the Gulf War to contain his regime.” See
    http://online.wsj.com/article/SB121504452359324921.html?mod=opinion_main_commentaries

    As for Bush, “He should wear their scorn like a badge of honor. I would love to see a day when America is admired consistently from continent to continent. But let the world admire us because we have done the right things, even when unpopular, not because we changed our definition of what is right to appease evil leaders and misguided masses around the globe.”
    See
    http://www.realclearpolitics.com/articles/2008/07/bush_can_take_pride_in_scorn.html

  15. #19 Hugh

    “Leftest” propoganda? Good one. I guess that’s what the tiny minority who still believe the catalog of lies told by “the decider” and his cadre call truth and fact these days.

    Is the man you quote to support your belief in and devotion to “the decider” the same mendacious Douglas Feith that was Don Rumsfeld’s neoCon lapdog? The man who was in charge of Abu Ghraib when the war crime torture abuses, which he approved of, occurred? The man that Gen. Tommy Franks called “the fucking stupidest guy on the face of the earth?” The man who didn’t see the need for a postwar plan to put Iraq back together? A man who—-along with “the decider,” his inner circle, all the citizens who foolishly supported him, and the Congress that enabled him—-has the blood of thousands of American soldiers and more than a million Iraqis on his hands? Is that the Douglas Feith you believe in?

    “The decider” DOES wear the scorn of the world and a large majority of his own fellow citizens as a badge of honor (just as smalltime dictators like Mugabe do). If you will just carefully read the Declaration of Independence and the US Constitution, you will see how truly contrary to American founding principles that is. Ooops, sorry. That would be “leftest propoganda.”

  16. Back to the topic, I don’t think Jack is advocating socialism on this one.

    It’s a question of how the tax code should treat private jets.  To me, they are a form of consumption by those fortunate enough to afford them, and should be taxed at full market value.  They certainly do not deserve the subsidy of accelerated depreciation.  (any depreciation schedule should be based on real world decline in value.)

  17. 24 – You have a clear view of the playing field. Sen. Lieberman, a liberal? You and Novice should get together and discuss how you wish it was instead of how it really is. Have a good 4th!

  18. Yes these are the times that try the left’s soul.  You can just feel the twisted angst dripping from Jack’s posts.

    Success in Iraq?  Heaven forbid. 

    Pictures, stories, footage leaving no doubt that Iraq is on a trajectory to becoming a prosperous, democratic nation has the left reaching for the pepto.

    The US military winning hearts and minds in the middle east has those on the left, those on the left so heavily invested in US defeat, has the left frantically, comically searching in vain for it’s collective ‘happy place’.

    The prospect of Bush and the neocons getting it right – that the way to fight terrorism is by giving people freedom – has given the left the vapors.

    You would think that the left, the oh so compassionate, liberal left, would be happy to see freedom come to a people so brutalized by one of the most evil tyrants of our time.

    But you would be wrong.

    The left’s vanity and debilitating hatred of Bush has caused them to entirely lose what little remained of their collective moral compass.

    The left would rather the US suffer humiliating defeat in Iraq and Afghanistan. 
    The left would rather the US lose in the war against al Qaeda.
    The left would rather the Iraqi and Afghan people continue to suffer.

    Than have to deal with the thought that Bush and the neocons have been proven right and that history will judge them favorably on Iraq and Afghanistan and the war on terror.

    But don’t you dare ever, ever question the left’s patriotism.

    The US is winning in Iraq.  NATO is winning in Afghanistan.  The US military is winning hearts and minds in the middle east.  And al Qaeda is on the ropes.

    These are indeed dark days for the left.

  19. Jack:

    It’s too bad you let your Bush hatred cloud the fact that there are terrorists out there who want to kill us, and have in the past. Some liberals get that. Sen. Joe Lieberman said it well: “We could rightly criticize the Bush administration when it failed to live up to its own rhetoric or when it bungled the execution of its policies. But I felt that we should not minimize the seriousness of the threat from Islamist extremism or the fundamental rightness of the muscular, internationalist and morally self-confident response that Bush had chosen in response to it.”

    Greg:
    You’re right about the tax code’s treatment of bizjets. Bottom line is that business aviation does not pay its way. See:
    http://www.bts.gov/programs/federal_subsidies_to_passenger_transportation/html/federal_subsidies_to_passenger_transportation.html

    “The federal government provided more subsidies to the general aviation system per thousand passenger-miles than for commercial aviation for the entire period 1990-2002 (Figure 6). Federal subsidy per thousand passenger-miles for general aviation grew rapidly between 1990 and 1993 and then fell between 1994 and 2000, before rising afterwards.”

  20. Novice – Have a Happy 4th and get plenty of rest. Obviously, you need it—badly. I always enjoy reading your delusional ramblings that read like a script from Fox “News”. Enjoy your freedom to rant—I enjoy mine and it has nothing to do with the bloodshed and death we are involved in in the “name of freedom.”

  21. #21

    Is it true that CA purchasers of yachts and private aircraft do not have to pay sales tax on their multi-million dollar purchase if they purchase it out of state, and keep it out of state for 90 days?

    It would seem that for aircraft at least, and out of state purchase and storage is trivial.

  22. Jack#9 asked:“Are you saying that you don’t mind the government subsidizing billionaires with your tax money?”  As in giant subsidies for venues for major sports?

    John Galt #14—well said!

  23. What are we debating?
    The fact that persons who earn Millions and in some cases Billions through investing in Companies and Services and paying out Millions and sometimes Billions in salaries and Taxes, should not enjoy tax breaks?
    The landing Fees on many Private planes that in some cases are close to, above or the same as Airline Transport Aircrafts and landings beyond regular opening hours are paid for on an overtime bases. 
    All Aircrafts meeting FAA requirements must be allowed to use available atc resources are we arguing from the correct view point?  Because it is sounding just a little bit like “Bad-minded reasoning”. Many Private planes make use of Jetports or General Aviation facilities or gates not utilized by the general traveling public so I believe if you check the stats you will find that use of an International processing FBO is not as wides spread with these private airplanes that many of us will acquire as soon as our income is able to so be careful what we wish for.
    Good Blessings to all.

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