The Senate GOP Tax Bill Cuts Taxes on Private Jets

JM Ashby
Written by JM Ashby

I was going to say this provision has been added to the Senate Republican tax cut bill for 'inexplicable' reasons, but I suppose it's not really inexplicable, is it?

Several influential Senate Republicans have made it crystal clear that they're advancing this bill to please their super-rich donors and their donors are the kind of people who own private jets.

A measure in the Tax Cuts and Jobs Act would lower taxes on some of the payments made by owners of private aircraft to management companies that help maintain, store and staff those planes for owners.

The language would exempt owners or leasers of private aircraft from paying taxes on certain costs related to the upkeep and maintenance of the jets, according to a description from the Joint Committee on Taxation.

Eliminating these taxes will apparently cost the government about $50 million.

That's not enough money to make a great deal of difference in any direction, but it will certainly please a few donors.

  • muselet

    Kevin Drum:

    … [T]his provision of the bill clears things up by specifying exactly which activities from a management company count as taxable and which don’t:

    • Exempt payments are those amounts paid by an aircraft owner for management services related to maintenance and support of the owner’s aircraft or flights on the owner’s aircraft.

    • Applicable services include support activities related to the aircraft itself, such as its storage, maintenance, and fueling, and those related to its operation, such as the hiring and training of pilots and crew, as well as administrative services such as scheduling, flight planning, weather forecasting, obtaining insurance, and establishing and complying with safety standards.

    I don’t truly understand the distinctions here, but there doesn’t really appear to be anything corrupt going on. As for why the amendment was sponsored by the bipartisan team of Sherrod Brown and Rob Portman, it’s because they’re the senators from Ohio, and Ohio is where NetJets is headquartered. They’re the ones who sued the IRS earlier this year and won, so their home state senators were the obvious ones to take an interest and make the tax code clear on what’s taxable and what isn’t.

    I’m with Drum, at least tentatively. Yeah, it doesn’t look particularly good, but it also doesn’t seem to be particularly corrupt.


    • Christopher Foxx

      If nothing else, it’s certainly corrupt in the sense that the Republicans are touting this as tax cuts for the middle class while making most of the cuts on things, like private jets, that the middle class doesn’t have.

      • muselet

        Ohio’s senators championed an Ohio company’s position with regard to an unclear point in the law and IRS regulations, and the amount of money involved is a rounding error in the federal budget. Sorry, but I see nothing obviously corrupt here.

        And Rs loudly proclaim the middle class will reap huge benefits every time they blow their noses, so that hardly counts.


        • Christopher Foxx

          I agree with you that there may not be anything obviously corrupt in the Ohio senators position on this item. I disagree with your implication that the amount of money involved should be a factor in determining if something is corrupt.

          Or that someone shouldn’t be called on their lies/hypocrisy just because they are liars/hypocrites most of the time.

  • Badgerite

    Not surprised. I wonder how Orrin Hatch defends that. Oh Yeah. He came from ‘regular people’. Regular people don’t have private jets. The only tax ‘cuts’ that are permanent in this legislation are the cuts to corporate taxes and the taxes of the ultra rich. And if Hatch is not aware of that then he doesn’t know what he is voting for. I think he does.
    The Medicare cuts are meant to be automatic and permanent over time. That’s why “Leave’um on the Ice Flow” Ryan is smiling. The Bush tax cuts as well went overwhelmingly to the richest in the country and it did pretty much nothing for the economy. Growth was pretty anemic under GW and, of course, fell off a cliff in the “the fundamentals are sound” fall of 2008. Not only was Hatch’s outburst apparently the only way he could respond to Sherrod Browns accurate assessment of this legislation, he had this outburst while sitting next to “death panel” Grassely. I’m sorry gentlemen, but you are documented liars and sell outs. Don’t expect people to treat you as otherwise.

    • Christopher Foxx

      Don’t expect people to treat you as otherwise.

      Alas, there are people, a lot of them, that will treat them otherwise.