During Wednesday's press conference, Obama repeatedly (at least six times) mentioned fat cats who get tax breaks on their corporate jets, saying that these kinds of tax loopholes should be scrapped. This is the kind of rhetoric that appeals to those who love class warfare. After all, who cares about rich guys who get to fly in corporate jets? Shouldn't they be paying their fair share?
Obama apparently forgot that the tax breaks he constantly berated were created by his own "stimulus" package. Oops.
The tax breaks allow for accelerated depreciation, which let companies take a larger tax deduction in the early years of the life of an asset, such as a plane. This obviously makes the purchase of a jet more attractive to companies. The incentive was first used after 9/11 to help plane manufacturers cope with lost sales as a result of the terrorist attacks. With the recession, the aviation industry again experienced a slump in business and had to cut jobs as a result. Cessna and Hawker Beechcraft, based in Wichita, KS, lost almost 7,000 jobs. So, Congress approved the tax break in the stimulus, signed by Obama.
There should be a lesson here for Obama, beyond the need to remember what he signed into law. You can't soak the rich without affecting those who aren't rich. Go ahead and revoke the tax break on corporate jets. A lot of people will applaud that the rich are getting what they deserve. Tell that to the people who then lose their jobs in the aviation industry as a result of declining sales.
This is the same lesson that should have been learned from the 1990 luxury tax, but some people refuse to learn it. Or, maybe Obama knows better, but the temptation to wage class warfare is simply too great to pass up. Facile but foolish appeals to the notion of fairness evidently trump reality.
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