Association Says New Taxes And Fees Will Stifle Manufacturing, Cost Jobs

The White House released their blueprint for the Fiscal Year 2013 budget, which sets the Administration's spending parameters. Manufacturing, which is identified as a key to lifting the economy and creating jobs, remains a cornerstone of the Administration’s priority to turn the U.S. economy around and address the nation’s debt. GAMA welcomes the proposals to extend 100 percent depreciation for one additional year and the research and development (R&D) tax credit permanently. However, general aviation manufacturers remain confounded by the inclusion of proposals that would hurt the economic recovery of the general aviation manufacturing industry and cost jobs.

“As an industry, we understand the urgency to address the fiscal challenges facing the United States,” said Pete Bunce, president and CEO of the General Aviation Manufacturers Association (GAMA) (pictured). “However, we have tremendous concerns about debt-reduction proposals like user fees and changes to the general aviation aircraft depreciation schedule. We look forward to being partners with the Administration and Congress in finding ways to strengthen the U.S. fiscal situation, but general aviation manufacturers will not stand for any proposals that threaten safety, jeopardize jobs or endanger the full recovery of the industry."

Specifically, GAMA has grave reservations regarding the president’s new tax, couched as a "user fee," which would require a $100 per flight fee on operators who fly in controlled airspace. This tax, which Congress has repeatedly rejected, would not only impose a significant new administrative burden on general aviation, but it would also necessitate the creation of a costly new federal collection bureaucracy. General aviation has long paid its fair share through an efficient per-gallon fuel charge at the pump and there is no rationale for change.

GAMA also remains baffled that the Administration continues to propose that the depreciation schedule for general aviation aircraft used for business purposes should be altered.  Changing from a five-year to a seven-year depreciation schedule in the United States will hinder recovery of the largest aircraft market in the world. Moreover, the overheated rhetoric surrounding this tax provision is harmful to the revitalization of the industry.

“If President Obama is truly sincere in his goal to increase U.S. manufacturing and exports, which he repeatedly cites as key to economic recovery and long-term viability, his Administration should embrace general aviation manufacturers and its workforce as a part of the solution, not a target,"  added Bunce. "We do not understand how the Administration on the one hand can propose 100 percent depreciation for an additional year to strengthen the economy and at the same time attempt to lengthen the depreciation schedule for general aviation aircraft in 2013 and beyond. These two proposals are diametrically opposed.”

The Fiscal Year 2013 budget is sent to Congress as a guideline for Administration priorities, but Congress has the authority to determine its own spending parameters. Therefore, GAMA will work with members on both sides of the aisle to convey the ramifications of these proposals, while also underscoring the benefits of investment in manufacturing.

FMI: www.gama.aero