The Biden administration made good on the President’s State of the Union Address promise to raise taxes on business jet operators by raising the federal tax on jet fuel fivefold over the next five years.
The White House’s 2025 budget proposal would boost the current tax of 22 cents per gallon to $1.06 by 2030. It’s estimated it would raise $1.1 billion over the five years. The proposal also includes a major funding increase for the FAA, including money to hire 2,000 air traffic controllers.
The fuel tax hike is being championed as a fairness issue by the administration. The background documents say business aircraft account for 7 percent of FAA airspace workload but the current tax only covers 1 percent of the revenue into the federal trust fund for aviation and airports. Airline passengers pay a flat $4.50 on each flight and 7.5 percent excise tax on the fare to pay for the other 99 percent.
The backgrounder on the State of the Union address said the administration wanted to make private jet operators “pay their fair share.” In the speech itself Biden send he wanted “end tax breaks for big pharma, big oil, private jets, massive executive pay.”
Aviation groups responded quickly to the SOTU address and were ready with comments on the budget proposal. NBAA President Ed Bolen reiterated his stance that private aviation is an important business tool and that most of those flying on the jets are mid-level managers doing company business and not their ultra-rich employers. “The Biden administration’s sweeping plan would hurt business aviation and the jobs and communities that depend on it, and make it harder for U.S. companies to compete in a global economy,” Bolen said.
The National Air Transportation Association hit all of NBAA’s points and also alleged that much of the revenue raised by the aviation fund is diverted to a similar fund for highway projects. “We are concerned that the Biden Administration is failing to account for the billions of business aviation tax dollars that are diverted from the Airport and Airways Trust Fund (AATF) into the Highway Trust Fund (HTF),” said NATA President Curt Castagna. “Such diversion weakens the National Airspace System and could place the safety of the industry at risk.”
Editor’s Note: This article first appeared on AVweb.
