Corporate Aviation: A
Political Punching Bag
For most companies, cost was the major
stumbling block to using business aviation services in the past. A lot of people think that companies do not need their
own airplanes to fly executives and other employees around. People think that
should spend money on other things than corporate aviation; on the other hand, I
do not think people know the real benefit of the corporate aviation.
I feel that corporate aviation is vitally important to our business because
it provides good services, and that helps to provides jobs. I believe most of corporate
aviation is domestic, so that will benefit the U.S.A economy.
President Obama made a
comment if business can afford corporate aviation. “My attitude is, if you got a corporate jet,
you can probably afford to pay full freight, not get a special break for
it," (Loyd,
2012). Obama was referring to the accelerated depreciation of business jets. The accelerated
depreciation is “any
method of depreciation used for accounting or income tax purposes that allows
greater deductions in the earlier years of the life of an asset”. Obama said that if a company can afford a corporate
aircraft, they should pay more taxes. I agree with Obama
for big companies that have a lot of money to spend, and it wouldn’t affect
them, On the other hand; I disagree with Obama for mid-sized and small business
owners because that would make these small corporations less competitive in
their market.
The NBAA doesn’t agree with Obama
plan. Following the debate, the president and CEO of the NBAA, Ed Bolen, wrote
a letter to the President, saying "Your comments seemed to illustrate a
complete lack of understanding about the importance of business
aviation in the U.S., and appear to be at odds with your stated interest in
promoting job growth, stimulating exports, driving economic recovery and restoring
America to its first-place position in manufacturing." (Patiky,
2012).
In conclusion, I feel that
business aviation has a big role in the world business for today. Also, I believe
that the use of corporate jet aircraft can be profitable when used in the right
way.
Resources
Accelerated Depreciation (n.d) Investopedia
online, Retrieved from http://www.investopedia.com/terms/a/accelerateddepreciation.asp#axzz2KeoScL4O
Patiky, M. Zinger from the president
stings business aviation. Retrieved from: http://www.forbes.com/sites/businessaviation/2012/10/05/zinger-from-the-president-stings-business-aviation
Loyd, L. (2012) Aviation group: Obama off
base on corporate jet breaks. Retrieved February 11, 2013, from http://articles.philly.com/2012-10-06/business/34280737_1_business-jets-corporate-jet-national-business-aviation-association
Rubin, R. (2011, June 30). Corporate jet tax gets six Obama
mentions, $3 billion estimate. Retrieved from http://www.bloomberg.com/news/2011-06-29/jet-tax-break-cited-six-times-by-obama-would-cut-debt-by-about-3-billion.html
That is quite interesting Ayman. Though corporate aviation allows businesses to transcend national borders, a significant majority conducts their business within the U.S. In so doing, the national benefits economically from the already stipulated fees, taxes, fuel and the business transactions itself. It creates jobs for citizens thereby reducing, if not maintaining, the present unemployment rate.
ReplyDeleteI don’t think that a company should be forced to pay taxes just because they can afford it and the government is trying to cut back on the country’s deficit. The amount of money that the government will save by eliminating accelerated depreciation is only $3 billion over the course of ten years, the deficit will be $72 billion by that time. It seems like the President is trivializing something to take the focus off of the real problem which is government spending.
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