It’s a time-honored tradition for Democrats: Attack “the rich” (whoever they may be) for not paying their fair share (whatever that may be).
President Barack Obama’s sustained attacks on corporate jet owners is merely the most recent example. Corporate jet owners do not engender much sympathy. They’re an easy target for attack. Which is why the president has repeatedly hammered jet owners and declared tax depreciation on private business aircraft as a “loophole” in need of repeal.
Forget for the moment that President Obama has twice signed into law increased depreciation of private aircraft. That would only allow inconvenient truths to stand in the way of political rhetoric. So on-message has the president been in his line of attack that during a June 29 press conference, Obama bought up the issue six separate times, leading Richard Wolf to write in USA Today, “President Obama must really have it in for the owners of corporate jets.”
Having it in for corporate jet owners might be politically expedient, but it comes with real consequences and real victims. Namely, someone has to build those planes. And that means jobs, which the nation so desperately needs.
According to the General Aviation Manufacturers Association, the industry contributes $150 billion to the economy annually, supporting approximately 1.2 million jobs. General aviation manufacturers directly employ between 120,000 and 130,000 workers. [See editorial cartoons on the economy.]
Like many industries, general aviation has suffered in this economy, resulting in 20,000 manufacturing layoffs since 2008.
That word “manufacturing” is significant. Time and again, President Obama has said manufacturing jobs must be part of our recovery—not realizing, or not caring—that the rhetoric he is employing and the higher taxes he is pursuing amount to a punch in the stomach for general aviation manufacturing.
Democrats should know better.
When in 1991 a 10 percent federal tax surcharge was enacted on luxury goods such as yachts, private planes, expensive cars, and even fur coats, sales of these products plummeted—costing both jobs and tax revenues from lost sales. [Check out political cartoons on Obama.]
This spurred then Rep. Patrick Kennedy, whose Rhode Island district included the yacht-centric Newport, to introduce in 1999 legislation to give yacht buyers a tax credit of 20 percent of the purchase price—up to a $2 million credit—legislation to halt the harmful impact of the luxury tax on yachts, a tax supported by his father, Sen. Ted Kennedy.
Why did he do so? Because yacht-building companies (also known as job creators) had been laying off workers in his district as a direct result of the tax.
“Rich people can go anywhere to buy their boats,” Kennedy said at the time. “What my tax cut will do is hopefully encourage them to buy their boats here.”
Rhode Island was not the only community affected. So, too, were yacht-building companies in the coastal areas of North Carolina. Bryant Phillips of Hatteras Yachts told 20/20 at the time, “Every time they buy one of these, they are keeping a thousand families in New Bern clothed, fed, educating their kids.”
For all of the huffing and puffing against private jet or yacht owners, it should be clear that what really matters are the jobs of those manufacturing the planes and building the yachts. Patrick Kennedy understood that in 1999—and if a Kennedy understands a tax can have a devastating impact on an industry and jobs, Democrats should come to that common-sense realization, too.