Pain At The Pump For Gulfstreams?

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12 years 4 months

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From Bloomberg News (yes, the same Bloomberg as the NYC mayor):

U.S. Private-Jet Fuel Taxes Rise 65% in Senate Accord (Update2)

By John Hughes

April 25 (Bloomberg)

-- U.S. business-jet owners would pay 65 percent more in fuel taxes to finance federal air-traffic control upgrades, under an agreement among Senate leaders.

The levy would increase to 36 cents a gallon from 21.8 cents now, under the accord announced in a statement today in Washington by Senator Jay Rockefeller, a West Virginia Democrat. [Yes, the same Rockefeller as in Standard Oil. "He bought it, he paid for it, it's his" - Pat Buchanan on Jay's Senate seat.] Airline passenger fees and taxes wouldn't rise, he said.

The agreement between Rockefeller, chairman of the Senate aviation subcommittee, and Montana Democrat Max Baucus, who runs the Senate Finance Committee, ends a seven-month standoff that stalled an aviation-funding bill. Today's deal clears the way for an April 28 vote to bring the bill to the full Senate.

Rockefeller wanted to double fuel taxes for corporate aircraft while cutting fees for airlines, which he said paid disproportionately for aviation services. Instead, he settled for the smaller boost, so that small-jet owners will pay 5 percent of federal aviation costs, up from 3 percent.

``This agreement is a good down payment toward ending the growing inequities that exist between airline passengers and corporate jet users,'' Rockefeller said in the statement.

The House approved its version of the funding legislation, which would finance the Federal Aviation Administration through 2011, on Sept. 20.

The House bill, which would boost business jet-fuel taxes to 35.9 cents a gallon, and the final Senate proposal would need to be reconciled in a conference committee before being sent to President George W. Bush for his signature.

Bush Veto Threat

The Bush administration threatened in June to veto the House legislation, saying it doesn't meet needs such as creating user fees to pass on even higher charges to business-jet operators. U.S. airlines backed the Bush position on user fees.

Today's Senate agreement means that the user fees, which business-jet owners viewed as more burdensome than higher fuel taxes, are in neither version of the legislation.

The National Business Aviation Association, a Washington- based trade group for business-jet operators, said its members support funding the FAA and improving air-traffic control technology ``with a reasonable fuel tax.''

``We applaud the continuing work Congress has done on this very important issue,'' Ed Bolen, the association's chief executive officer, said in a statement.

Airlines' View

An airline trade group called the tax increase for business-jet users ``a step in the right direction.''

``It still falls short of the costs they impose on the system,'' James May, president of the Washington-based Air Transport Association, said in an e-mailed statement. ``We will remain engaged with these committees as the remainder of the package is developed.''

While losing the battle for user fees, airlines gained other benefits in the Senate legislation, which doesn't increase their costs. The House version raises airline passenger ticket charges for airport improvements to as much as $7 from $4.50, which would generate $1.1 billion a year.

The Senate bill also creates a new $400 million FAA account dedicated to upgrading the air-traffic control system. Raising the excise tax on fuel used by private jet owners will bring in an additional $240 million a year.

To contact the reporter on this story: John Hughes in Washington at [email][/email]

Last Updated: April 25, 2008 20:09 EDT

Well, they say that the rain falls on everyone. And as J.P. Morgan said of his yacht Corsair, if you have to know how much it costs, you can't afford it.

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Profile picture for user Moggy C

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20 years 1 month

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Something similar has happened in the UK where operators of GA turbines have suddenly faced a huge tax increase on anything that is not business related.

My friend with a Jet Ranger is spitting feathers.


Profile picture for user Whiskey Delta

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16 years 9 months

Posts: 2,513

A G550 burns a little less than 3000 lbs. per hour at cruise. The tax increase would cost the operator $63 per hour more. Nothing that the owner of a G550 is going to be concerned about.

Member for

16 years 7 months

Posts: 8,505

But people with that sort of money are the ones who complain the loudest usually, us mere mortals grin and bear it knowing that we've got no choice. We know that nothing we say or do will change anything.

Profile picture for user Whiskey Delta

Member for

16 years 9 months

Posts: 2,513

Not in my experience. It's the common folk who are the loudest opponents to the small flucuations in fuel/food/etc. prices. The folks who are blasting around the sky in personal jets aren't in as much touch with these changes.

Profile picture for user J Boyle

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15 years 4 months

Posts: 9,664

I wonder exactly how the bill is written?

If it's just "turbines" as Moggy says the UK law is written, it would effect far more than just the bizjet guys with top of the line Gulfstreams.
Remember, most US bizjets are far down the scale, not that they couldn't afford more taxes, but it would effect a small firm with a Caition, one of the new VLJs, or old Lear (some sell for less than a most new 4 seat piston GA aircraft) more.

I hope someone in D.C. remembers...
Most AG aircraft are turbines...
as are all Medevac helicopters
and many bush planes and most firefighters...
not to mention the few non-business GA guys with turbine "toys".

Hardly the "fat cat" rich guys the bill was meant to target.