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Wed, Feb 06, 2013

NBAA, GAMA Respond To Most Recent White House Swipe At GA

Both Organizations Say Facts, Not Rhetoric, Should Drive The Debate

The White House seems to be at it again. In a press briefing Tuesday in Washington, Press Secretary Jay Carney made a reference to "subsidies to corporate jet owners" as something that could be cut or eliminated as way to reduce the national debt.

Two major GA organizations, the NBAA and GAMA, responded that the Obama administration is resorting to rhetoric that ignores facts about the contributions GA and business aviation make to the economy.

NBAA President and CEO Ed Bolen today issued a statement regarding the comments, made as part of the debate over reducing the nation’s debt, which focused on the amount and timing of tax payments for companies using general aviation airplanes – also known as “depreciation schedules” on the aircraft.

“Everyone agrees on the need to find meaningful ways to reduce the nation’s debt, and to do so without harming the nation’s economy. As our country pursues this critical policy objective, it is important to ensure that the proposals we consider are based on reality rather than rhetoric," Bolen said. "Unfortunately, in the course of the debate over the debt, the White House has recently focused on misleading statements related to depreciation schedules for business aircraft.”

Bolen pointed to the following realities regarding general aviation and depreciation:

  • General aviation is a critical engine in America’s economy, and a vital link in the nation’s transportation network. The industry employs 1.2 million workers and generates $150 billion in economic activity.
  • The Great Recession devastated the general aviation industry, and it is not expected to recover to pre-recession levels for several years.
  • The depreciation schedule for general aviation aircraft is not a “loophole.” In fact, the depreciation schedule was established decades ago by the Treasury Department and adopted by Congress in 1986. The schedule works exactly as policymakers intended with no individual or company able to depreciate more for a general aviation aircraft than any other capital asset.
  • Changes to the depreciation schedule for general aviation aircraft would not yield meaningful progress toward reducing the national debt.
  • Any changes to such a well-established depreciation schedule, effectively established by both the executive and legislative branches of the federal government, should be the result of comprehensive analysis and debate—not part of a backroom bargain made in search of political talking points.

“The bottom line,” Bolen concluded, “Is that the White House’s rhetoric about general aviation depreciation ignores established facts and long-standing tax policies related to business airplane ownership and use, does almost nothing to seriously address the nation’s debt and has the potential to harm a great American industry in the process.”

A similar note was sounded in a statement from GAMA president and CEO Pete Bunce. “Politics in Washington continues to demonstrate that facts can be conveniently overlooked when one is trying to point fingers and score sound bites," Bunce said. “Once again, the Obama Administration is starting the drumbeat that we could end all the fiscal challenges our nation faces by changing the depreciation schedule for general aviation and business aircraft from five to seven years.  Their rhetoric is wrong and all it does is hurt general aviation companies and workers across this country.  Depreciation schedules for manufactured goods - everything from computers, automobiles and yes, aircraft are established to encourage businesses to buy new and improved products. Depreciation schedules help spur manufacturing sales and create jobs.

“Purchasers of jets, turboprops, rotorcraft, and piston aircraft didn’t create our country’s economic misfortunes; in fact, general aviation contributes more than $150 billion to the U.S. economy annually and employs more than 1.2 million people.  As manufacturers, we always stand ready to engage in a dialogue with regulators and political leaders to develop policies that allow us to create more manufacturing jobs.

“Government officials, including the President fly some of the best equipped business jets on the planet and use these machines for the same purpose that businessmen and women use their aircraft - as an efficient time management and security tool.  It’s time to stop all the political games and focus on boosting general aviation to help generate jobs and grow our economy.”



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