According to Bloomberg, the Obama administration has proposed a new $100/flight tax on turbine-powered aircraft. Such aeroplanes are already subject to a tax on every gallon of fuel used and, if chartered, a 7.5 per cent excise tax on the ticket price.
The existing taxes tend to favour efficiency. Al Gore’s Gulfstream will pay more than an efficient turboprop or light jet for the same trip.
A charter trip in a heavy jet will pay more in tax than a charter trip in a light jet or turboprop. The new tax will do the opposite, imposing the same fee on a Gulfstream and a self-piloted Piper Meridian.
Mostly I’m confused by why anyone would want to create a new tax and associated federal bureaucracy (forms, help desk, inspectors, enforcement, appeals process) to collect it. If the goal is to raise more revenue, why not simply raise the rates on the existing taxes? Do we want our government to bleed us with paper cuts?
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