Full text of Obama tax proposals

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Full text of Obama tax proposals

Post by SonomaCat » Mon May 11, 2009 2:38 pm

I haven't had a chance to kick back and enjoy an engaging read through the doc yet, but if you are interested, it can be found here:

http://www.treas.gov/press/releases/tg125.htm

The link at the bottom of the press release goes to the full text.

At a glance ... some good, some bad, in my opinion.

As to the international stuff ... my general response would be that Obama needs to use a scalpel and not an ax to reform the current taxation regime (to paraphrase his budget debate argument with McCain). Right now it looks like an ax was used.



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Re: Full text of Obama tax proposals

Post by TIrwin24 » Mon May 11, 2009 4:20 pm

One thing not noted in that link is that Obama plans to create user fees for general aviation. So basically, if you want to hop into your airplane and go to Kalispell for the weekend it is going to cost you a fee not only park there, (which is standard policy now) but to also pay to actually land your plane, and increase the tax on fuel from around .20 cents a gallon to around .70 cents a gallon. Ridiculous!

This has been a longstanding debate in Washington to do this (since 2006ish), but Bush kept vetoing the bill to keep general aviation somewhat separate from the commercial sector. If Obama's plan goes forward to enact this general aviation user fee, it could very well ground a lot of pilots around the US, as they will not be able to afford the costs to fly their airplane.

Once I find the article in AOPA and an appropriate link, I'll post it.


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Re: Full text of Obama tax proposals

Post by SonomaCat » Mon May 11, 2009 4:38 pm

TIrwin24 wrote:One thing not noted in that link is that Obama plans to create user fees for general aviation. So basically, if you want to hop into your airplane and go to Kalispell for the weekend it is going to cost you a fee not only park there, (which is standard policy now) but to also pay to actually land your plane, and increase the tax on fuel from around .20 cents a gallon to around .70 cents a gallon. Ridiculous!

This has been a longstanding debate in Washington to do this (since 2006ish), but Bush kept vetoing the bill to keep general aviation somewhat separate from the commercial sector. If Obama's plan goes forward to enact this general aviation user fee, it could very well ground a lot of pilots around the US, as they will not be able to afford the costs to fly their airplane.

Once I find the article in AOPA and an appropriate link, I'll post it.
Please do provide a link ... if it isn't included in the official budget proposals, it would seem unlikely that it is actually a part of Obama's plans.

Apparently you believe that people who own/use airplanes are entitled to be subsidized to the huge extent they current are by the taxpayers by way of taxpayer spending on air traffic control, airports, emergency services, etc., etc.?

You socialist. :wink:



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Re: Full text of Obama tax proposals

Post by TIrwin24 » Mon May 11, 2009 9:58 pm

It is in Obama's budget proposal.

From AOPA (Aircraft Owner's & Pilot's Association) Magazine (May 2009):
President Barack Obama's proposed budget is calling for aviation user charges starting in 2011. The White House Office of Management and Budget released the proposal and although there is not much detail, the document makes it clear that the administration wants to replace some of the aviation excise taxes with "direct user charges."

"Direct user charges are just another name for user fees," noted AOPA President Craig Fuller.

User charges would total some $7 billion in 2011, or about half of the FAA's total budget.

"We don't know what kind of user charges the Obama administration would propose to implement, but the previous administration wanted to raise about $7 billion through air traffic control system user fees," Fuller said.

In February, Fuller testified in support of Transportation Committee Chairman James Oberstar's (D-Minn.) bill, H.R.915, to finance the FAA through the current system of aviation excise taxes. The House Transportation and Infrastructure Committee recently approved H.R.915, the FAA Reauthorization Act of 2009, which now moves to the next committee.

"This is an important first step, and we strongly support this bill," said Fuller. "But with the Obama administration's call for user fees, we know we have a rough flight ahead of us."

The Transportation Committee believes that the time-proven system of aviation excise taxes, not user fees, should continue to fund the FAA and modernization of the air traffic control system. However, taxes are the jurisdiction of the Ways and Means Committee. Last year, that committee accepted the recommendation of the Transportation Committee and passed a companion bill that would have funded the FAA from fuel taxes and other taxes paid into the aviation trust fund. But those bills stalled in the Senate.

The Ways and Means Committee, meanwhile, has indicated it won't begin to consider this year's funding measures until after it examines the president's budget.

Oberstar said he would reluctantly support another temporary funding extension until the end of September to allow airport grant funding (Airport Improvement Program) to continue through the construction season.

Both Oberstar and aviation subcommittee Chairman Jerry Costello (D-Ill.) said they would prefer quick passage of H.R.915. "We need to be maintaining and upgrading facilities to make our economy as efficient as possible," said Costello.


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Re: Full text of Obama tax proposals

Post by TIrwin24 » Mon May 11, 2009 10:01 pm

And for your smart-ass comment about the subsidization:

The general aviation community and commercial businesses provide for roughly 75% of all money utilized by the FAA. The other 20-25% is provided by the federal government.


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Re: Full text of Obama tax proposals

Post by SonomaCat » Mon May 11, 2009 10:24 pm

TIrwin24 wrote:And for your smart-ass comment about the subsidization:

The general aviation community and commercial businesses provide for roughly 75% of all money utilized by the FAA. The other 20-25% is provided by the federal government.
Which means they are being subsidized by the taxpayers ... just like I said. Thanks for providing the stats to back me up.

And that's just the money utilized by the FAA ... and I assume large chunks of airport construction money don't go throught that agency and therefore aren't counted in your stat.

It makes perfect sense to me that the people who utilize the infrastructure for their own enjoyment (recreational pilots) and the people who profit from the infrastructure (commercial airlines) actually pay for the infrastructure the government provides for them as opposed to expecting people who don't use the infrastructure for their own pleasure or don't profit from it having to subsidize it. Don't you agree?

Explain to me why the current excise tax scheme is preferable to a user fee system (assuming you agree with the position of the guy quoted in your article).



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Re: Full text of Obama tax proposals

Post by TIrwin24 » Tue May 12, 2009 8:57 am

Actually any airport that is given an identifier code on an aviation map comes under governance of the FAA (think of the FAA as a "big brother" type of position here) and under the FAA, the direct decisions regarding airports are given usually to the state or the state's port authority. So therefore, money that is held in the FAA trust is given to various airports for construction, remodeling ect. So yes, the FAA has to approve funds to be used on these structures before they are touched.

Why I prefer the existing system? Simply put, I don't want to have to pay exuberant sums of money if I want to fly to a different city to visit friends or family. The plan calls to increase fuel taxes from .20 cents to .70 cents a gallon, which would sharply increase the price of aircraft fuel. This aspect doesn't just affect the general aviation sector, but the commercial sector as well. Whenever you want to fly to Bozeman from San Fran, your ticket prices will be considerably more expensive than they already are.

Another reason that I said above is that many pilots will not be able to afford to fly if these fees are enacted. In that same magazine that I quoted above, they estimate that the number of pilots that drop out due to enacted user fees will keep the income of money to the FAA at the same level as it is now without the user fees.

So if we leave the system we have now, big brother will have total control of what money comes out of our pockets, and that alone is socialist.


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Re: Full text of Obama tax proposals

Post by SonomaCat » Tue May 12, 2009 7:57 pm

This was in the Greenbook that my initial post linked to (I made the mistake of assuming that you had read through it and determined that it hadn't been spoken to in there because you indicated that it hadn't been spoken to in there):
MODIFY FEDERAL AVIATION ADMINISTRATION FINANCING

Current Law

The Airport and Airway Trust Fund is supported by taxes on air passenger transportation, domestic air freight transportation, and aviation fuel. The tax on domestic air passenger transportation is 7.5 percent of the amount paid for the transportation plus a segment fee of $3.60 per segment. The tax on international air transportation is $16.10 on each international arrival or departure. Both the segment fee and the international arrival and departure fee are adjusted annually for inflation. The tax on domestic air freight transportation is 6.25 percent of the amount paid for the transportation. The tax on aviation fuel, to the extent dedicated to the Airport and Airway Trust Fund, is 4.3 cents per gallon for kerosene used in commercial aviation, 21.8 cents per gallon for kerosene used in noncommercial (general) aviation, and 19.3 cents per gallon for aviation gasoline. The tax is generally imposed when the fuel is removed from a terminal.

The taxes that support the Airport and Airway Trust Fund expire on September 30, 2009. The taxes on air transportation do not apply to amounts paid after September 30, 2009. The taxes on aviation fuel do not apply to fuel removed from a terminal after September 30, 2009. The authority to make expenditures from the Trust Fund for airport and airway programs also expires on October 30, 2009.

Reasons for Change

The Federal Aviation Administration’s (FAA’s) financing system should be more cost based. The current excise tax system, to the extent based on taxes on the amount paid for air transportation, does not provide a direct relationship between the taxes paid by users and the air traffic control services provided by the FAA. The Administration believes that the FAA should move toward a model whereby FAA’s funding is related to its costs, the financing burden is distributed more equitably, and funds are used to pay directly for services the users need.

To provide for necessary Federal airport and airway expenditures until a cost-based system is developed, the aviation excise taxes and the expenditure authority from the Airport and Airway Trust Fund should be temporarily extended.

Proposal

The taxes on air transportation and aviation fuel would be extended through September 30, 2011, at their current rates. Beginning October 1, 2011, the Budget assumes that the air traffic control system will be funded with direct charges levied on users of the system. The Budget reflects such a reform being in place starting in 2011, with a user charge collecting $9.6 billion in that year and with aviation excise taxes being commensurately reduced. Expenditure authority from the Airport and Airway Trust Fund would be extended through September 30, 2019.
The proposal sounds like it makes perfect sense to me.

It also doesn't include an increase in taxes on fuel as you claimed ... in fact, it explicitly notes that excise taxes will be reduced and replaced with the user fees. So it certainly looks like the impact on commerical airline passengers will be a REDUCTION in the taxes they pay.

As for your "socialist" theory ... I'm still struggling to figure out how making people who fly planes pay the actual costs of the services they receive (as opposed to having all taxpayers subsidize these costs for them) is a bad thing.

I totally understand people advocating government spending that benefits them, but let's be honest about what this is ... taxpayer-funded subsidies for people whose hobby is flying a plane. So there is no way you can argue that the proposed system (that charges the users of the services fees to pay for those services) is more "socialistic" than the current system ... because the exact opposite is reality.

I also find it a little ironic that you are making "big brother" references toward an entity from which you are expecting to receive services at below-market rate prices (and are upset that anyone might change that system to force you to pay closer to the actual cost of services you are utilizing). That's kind of a gift horse ... mouth sort of thing.



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