US president Joe Biden’s proposed budget for 2025 includes increased taxes on fuel for private jets, which the administration has identified as a potential source of funding the National Airspace System (NAS).
The White House on 11 March called for a “crackdown on a corporate jet funding loophole” by raising surcharge taxes on private jets from $0.22 per gallon of jet fuel to $1.06 per gallon. The increase would take effect in phases over five years.
“The budget would also increase the fuel tax on corporate and private jet travel, so that corporate executives and other wealthy Americans pay their fair share for the use of airspace and other public services related to air travel,” Biden’s administration said on 11 March.
Biden’s budget is certain to face opposition in the Republican-controlled House of Representatives, making its path to adoption unclear.
Industry group the National Business Aviation Association (NBAA) decries the “five-fold fuel tax increase” and blasted the proposal as “harmful to an essential American industry”. Business aviation supports 1.2 million jobs and contributes $250 billion to US gross domestic product, according to the NBAA.
”Business aircraft are used to optimise efficiency, productivity and flexibility, mostly by small and mid-sized companies, and sometimes by the president’s own cabinet members,” the association says.
“The Biden administration’s sweeping plan would hurt business aviation and the jobs and communities that depend on it, and make it harder for US companies to compete in a global economy,” says NBAA president Ed Bolen. “We urge Congress to tell the president that his gambit won’t fly with the citizens, companies and communities that rely on business aviation.”
The US Department of Transportation calls the proposed tax increase on private jets “the first update in decades”, adding that the NAS ”has largely been disproportionately funded by commercial air passengers”.
In the USA, commercial airline passengers currently pay a 7.5% tax on their airfare, plus a passenger facility charge of up to $4.50, the DOT says.
”Private jets are 7% of flights handled by the FAA but contribute just 0.6% of the taxes that make up the Airport and Airway Trust Fund,” the department adds.
The proposed budget for fiscal year includes roughly $22 billion for the Federal Aviation Administration, supporting the regulator’s plan to hire “at least” 2,000 additional air traffic controllers in 2025. It also earmarks $3.6 billion for the NAS, and a commitment to invest $8 billion in infrastructure and radar modernisation.
The FAA says it is taking “aggressive action” to tackle its shortage of ATC workers.
“These programmes include year-round hiring for experienced controllers from the military and private industry, enhancing the Air Traffic-Collegiate Training Initiative to hire more candidates who can begin facility training immediately upon graduation, filling every seat at the FAA Academy, and deploying upgraded tower simulator systems.”
