About 100 people, including Gov. Sam Brownback, gathered in an aircraft engine shop Wednesday to protest President Obama’s recent comments about tax breaks for corporate planes.
During ongoing battles over the budget and the federal debt ceiling, the president has cited corporate aircraft as an area where he wants to repeal tax breaks to generate more revenue for government.
Those who gathered at the National Center for Aviation Training — a mix of union aircraft workers, business leaders and local politicians — loudly applauded as Brownback, U.S. Rep. Mike Pompeo, Wichita Mayor Carl Brewer and others called on the president to leave the tax structure as it is and temper his rhetoric about corporate jets and their owners.
Brownback said the industry employs 1 million Americans, and Kansas has produced more than a quarter of a million aircraft. One-fourth of the state’s revenue is generated by the five major aircraft manufacturers in Wichita, he said.
“Don’t kill the goose that laid the golden egg,” he said, adding that aviation, as one of America’s few successful export industries, is vital to the nation as a whole and not just industrial pockets like Wichita. “Go pick on somebody else, we’re having enough difficulties,” he said. “These are American jobs that are under significant pressure from overseas. We don’t want to lose this fight, and we’re going to fight.”
Specifically, the president is proposing to end a practice of allowing businesses that buy corporate aircraft to depreciate their planes over a five-year period, which creates a tax advantage for the buyer.
Obama has proposed changing that so that corporate planes would be depreciated on the longer and less tax-advantaged seven-year depreciation schedule that applies to commercial airliners. Private planes for personal and recreational use are not eligible for the depreciation tax break.
The White House estimates that more than 70 percent of the plane owners affected by accelerated depreciation on aircraft make more than $1 million a year.
In negotiations on raising the federal debt ceiling, Republicans have sought deep cuts in government spending while the president has advocated a mix of spending cuts and upper-income tax increases, including the change in policy on corporate aircraft.
“The President believes that if we’re going to be asking seniors, students and family farmers to make cutbacks to address our nation’s deficit problem, then we should be asking the same of those who can afford to pay a little bit more, including corporate jet owners,” said White House spokeswoman Joanna Rosholm.
Pompeo, speaking at the news conference from Washington, argued that the additional taxes would represent only about $3 billion over a 10-year period, a “tiny fraction” of the trillions of dollars on the table in the debt ceiling fight.
“The president’s comments, the attacks, the class-warfare argument that this president put forth is nothing more than cover for a political challenge he faces,” Pompeo said. “He spent too much money.
“We’ve watched as he spent hundreds of billions of dollars trying to resurrect the automotive manufacturing industry,” Pompeo added. “And now he’s trying to destroy one (industry) that’s asking for nothing more than to let us be and to go let us grow.”
The Machinists union, which campaigned against Pompeo in last year’s election, joined him at Wednesday’s event.
Steve Rooney, president of Machinists Local 70, compared business jets to the tools aircraft workers use on the factory floor and said they’re not just for top executives.
“Most of these people that are flying on these aircraft are the managers and the people out there trying to contact the suppliers, the customers, the people they’re selling to on a daily basis,” he said. “And you can’t do that with a commercial airline. The number of flights aren’t there.”
Brownback said changing the tax code would ripple through the business realm, ultimately affecting the companies and workers who build planes for a living.
“When the president attacks private aviation, it sends a comment through all the board rooms in the country about watch out for buying a business jet, because you may get attacked politically, No. 1,” Brownback said.
“No. 2, it sends a comment to the CFOs of companies that the business depreciation may not be there in the future, which is part of the calculation on buying or using an aircraft.”
Brownback, a former senator, acknowledged that it would take more than a news conference/pep rally in Wichita to influence Washington, which is locked in a major budget battle.
“You start here, you make the comments here, you hope you can migrate them to Washington, D.C., to the decision makers,” Brownback said.
“You do things like what the mayor is doing, linking up with other cities’ mayors in other states, saying it’s a key sector to us. We do that through governors, through business organizations — and you fight.
“If it doesn’t start in Wichita, Kansas, I don’t know where it does start,” he said.