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June 30, 2011

Team Obama Parses His "Corporate Jet Tax" Language...He Didn't Mean The Good Tax Break He Signed, He Meant The Bad One Reagan Signed

The only "adult in the room" is a churlish little prick who evades responsibility for everything he does and says (Other than getting bin Laden that is. For that he claims way too much credit).

Here's the White House spin on why Obama wasn't talking about the corporate jet tax he signed as part of the so-called "stimulus" bill.

There are two different corporate jet tax items. In the deficit talks, White House officials say, the President has proposed eliminating the preference for corporate jets allowing them to depreciate in 5 years versus 7 years for commercial aviation. This proposal is longstanding. In its current form, it has been in place since 1987. We have never supported it and obviously didn’t sign it into law. In the stimulus bill, there was a separate provision called bonus depreciation. The current round started in 2008, signed into law under President Bush, was continued in the stimulus bill. A White House official says that “bonus depreciation—and this year 100 percent expensing—allows people to write off their property faster than they would otherwise—and is a broad provision that helps millions of companies from many sectors of the economy. To be eligible, you do have to meet certain criteria. One of those criteria is the date by which your property is placed into service. And, here’s where there’s a special provision for aviation (signed by President Bush)—both commercial airlines and private jets get an additional year (beyond the normal) to place in service. This same provision also applied to other capital goods that take a long time to contract and build. In short, bonus depreciation applies very broadly; and the small special provision in that for aviation applies to both commercial and private jets as well as other capital goods that take a long time to contract and build—not preferencing one over the other (and this special provision was first signed into law by President Bush).”

First, good luck making that argument into a sound bite and convincing people the old tax cut is horrible and inhumane but the one he signed is just dandy.

Second, look at all the mentions of "corporate jet" from yesterday's temper tantrum. All SIX of them.

[1]There’s been a lot of discussion about revenues and raising taxes in recent weeks, so I want to be clear about what we’re proposing here. I spent the last two years cutting taxes for ordinary Americans, and I want to extend those middle-class tax cuts. The tax cuts I’m proposing we get rid of are tax breaks for millionaires and billionaires; tax breaks for oil companies and hedge fund managers and corporate jet owners.

[2] It would be nice if we could keep every tax break there is, but we’ve got to make some tough choices here if we want to reduce our deficit. And if we choose to keep those tax breaks for millionaires and billionaires, if we choose to keep a tax break for corporate jet owners, if we choose to keep tax breaks for oil and gas companies that are making hundreds of billions of dollars, then that means we’ve got to cut some kids off from getting a college scholarship.

[3] I think it’s only fair to ask an oil company or a corporate jet owner that has done so well to give up a tax break that no other business enjoys. I don’t think that’s real radical. I think the majority of Americans agree with that.

[4] So the question is, if everybody else is willing to take on their sacred cows and do tough things in order to achieve the goal of real deficit reduction, then I think it would be hard for the Republicans to stand there and say that the tax break for corporate jets is sufficiently important that we’re not willing to come to the table and get a deal done. Or, we’re so concerned about protecting oil and gas subsidies for oil companies that are making money hand over fist -- that's the reason we’re not going to come to a deal.

[5] If you are a wealthy CEO or a health -- hedge fund manager in America right now, your taxes are lower than they have ever been. They’re lower than they’ve been since the 1950s. And you can afford it. You’ll still be able to ride on your corporate jet; you’re just going to have to pay a little more.

[6] And I’ve said to some of the Republican leaders, you go talk to your constituents, the Republican constituents, and ask them are they willing to compromise their kids’ safety so that some corporate jet owner continues to get a tax break. And I’m pretty sure what the answer would be.

What Obama engaged in yesterday was not an attack on a specific tax provision is was a general attack on "corporate jet owners" as part of his larger pool of anointed enemies for the day. Maybe what he's saying is true in terms of what's on the table in the negotiations he delegated to Joe Biden but that's not what he said yesterday.

I guess whoever keeps refusing to let Obama be clear got to him again. But hey, he said what he said, it's his fault he wasn't specific enough.

Based on the description of the 'bad' jet tax break the difference is corporate jets get written down over 5 years instead of the 7 like commercial aircraft. That's the provision Obama is trying to say is holding up a deal? A 2 year difference in a depreciation schedule? So if we go from 5 to 7 years for all aircraft then...what? No more deficits? Medicare is solved?

I'm not a tax guy but is that even a revenue enhancer for the federal government? Isn't the write down amount the same, just a company gets the full benefit sooner? Or is Obama trying to eliminate depreciation on all planes?

Meh, it doesn't really matter. Let's be honest, yesterday's performance was nothing but out and out class warfare. "Corporate jet owners" sounds a lot scarier than "the aviation industry", so facts weren't really the point to begin with.

One other thing. Where's his proof the GOP is simply standing on the sidelines over either of the jet proposals?

As far as I can tell, only one side has refused to publish a budget proposal (as they are supposed to do under law) and only one person has decided to sit out negotiations because he can't have his way.

We don't have an adult in the Oval Office, we have a petulant man-child.

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posted by DrewM. at 05:13 PM

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