rjpieces
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Buffett Battles Bush As Corporate-Jet Owners Fight

Mon May 14, 2007 11:34 pm

http://www.bloomberg.com/apps/news?p...670001&refer=home&sid=a_weVSOX_Ito

President George W. Bush is proposing to cut the amount passenger carriers such as American Airlines and Continental Airlines pay in federal taxes each year by $1.68 billion. Most of that obligation would be shifted to small-jet operators, including General Motors Corp., Exxon Mobil Corp. and NetJets Inc., the business-jet charter company owned by Warren Buffett's Berkshire Hathaway Inc.

Under current law, the government collects $2,015 in taxes every time a full Boeing Co. 757-200 jet flies between New York and Florida, according to the Federal Aviation Administration. A General Dynamics Corp. Gulfstream 4 business jet flying a similar route -- and requiring the same amount of attention from air-traffic controllers -- pays $236, agency figures show.

Under Bush's plan, the operators of the Boeing jet would pay $1,298, and owners of the Gulfstream would pay $837.
"Millions long for immortality who do not know what to do with themselves on a rainy Sunday afternoon"
 
ContnlEliteCMH
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Mon May 14, 2007 11:44 pm

Something stinks about this whole thing.

The large airlines ''are carrying the majority of the costs'' now, says Senator Jay Rockefeller, the West Virginia Democrat who heads the Senate Commerce subcommittee on aviation. ''Two-thirds of the planes in the sky are private jets. They've got to do more.'' Rockefeller, 69, and Mississippi Republican Trent Lott, 65, are the chief sponsors of the Commerce Committee measure.

This it *totally* irrelevant, so far as I can tell, to the workload of controllers. Who accounts for 2/3's of the takeoffs and landings that must be controlled? Yet another example that people can't do math, but this shocks none of us who can.

In my opinion, this is just posturing. If the FAA were actually competent to improve the air traffic control system for which they have already paid too much money and gotten nothing, this would be less of an issue. And I've paid a lot of tax on airfare in the past few years -- too much in my opinion -- but I don't see the distribution as inequitable because passenger jets create so much traffic.
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JAL777
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Mon May 14, 2007 11:47 pm

Quoting RJpieces (Thread starter):
Under current law, the government collects $2,015 in taxes every time a full Boeing Co. 757-200 jet flies between New York and Florida, according to the Federal Aviation Administration. A General Dynamics Corp. Gulfstream 4 business jet flying a similar route -- and requiring the same amount of attention from air-traffic controllers -- pays $236, agency figures show.

Yet a Boeing 757 requires massive airport infrastructure that's paid for those same taxes whiela a G-4 pretty much just needs a decent runway.
 
airfrnt
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Mon May 14, 2007 11:51 pm

Quoting JAL777 (Reply 2):

Yet a Boeing 757 requires massive airport infrastructure that's paid for those same taxes whiela a G-4 pretty much just needs a decent runway.

Incorrect. The airport infrastructure is paid for by landing fees, not taxes. The issue here is the air control system, which makes no difference if you have a private G-4 jet, or a 757-200. This is pretty sound business practice. Charge people according to what your costs are. (That I suspect won't be popular on A.net).
 
flyinryan99
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 12:05 am

Quoting AirFrnt (Reply 3):

Problem is...the G4s aren't clogging up the airports where ATC is the worst. Yes, there are a few airports they contribute some congestion but most of the airports where ATC is a problem, it's because of airline traffic.

I don't mind paying a little extra to help fund a new ATC system. But the problem is, the FAA has had a terrible track record in trying to implement a "new system." Until they can prove they are able to manage the money and get results, why would I want to give them a ton of money just to flush down the drain. Also, why does the FAA think avgas needs to go up by as much as they are proposing. Is GA going to reap many of the benefits from paying this huge increase in taxes? So far, I don't think so. Again, I don't mind paying $25 or however much it is for a new license or other smaller nominal fees to cover those expenses, but for what they are asking GA pilots to pay for is over the edge, IMO.
 
khobar
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RE: Buffett Battles Bush As Corporate-Jet Owners F

Tue May 15, 2007 12:06 am

Quoting RJpieces (Thread starter):
Under Bush's plan, the operators of the Boeing jet would pay $1,298, and owners of the Gulfstream would pay $837.

So, does this mean ticket prices will be reduced, or does it mean the airlines' profits will be boosted?  Wink
 
rjpieces
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 12:53 am

Quoting Khobar (Reply 5):
So, does this mean ticket prices will be reduced, or does it mean the airlines' profits will be boosted?

Seeing as most airlines aren't making a profit, more like the airlines' costs will be lower  Smile
"Millions long for immortality who do not know what to do with themselves on a rainy Sunday afternoon"
 
Mir
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 1:06 am

Quoting RJpieces (Thread starter):
A General Dynamics Corp. Gulfstream 4 business jet flying a similar route -- and requiring the same amount of attention from air-traffic controllers

Hardly. A G-IV can fly up in the 40,000+ levels, above most of the other traffic (and gets up there quickly), and will likely choose to land at ORL, and so does not affect the traffic arriving at MCO. That jet would also likely be departing out of TEB or HPN as opposed to LGA, EWR or JFK, and so would not contribute to the congestion at those airports.

-Mir
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Seattle Ops
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 1:19 am

Its about time the corporate jets paid their way!
 
Kohflot
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RE: Buffett Battles Bush As Corporate-Jet Owners F

Tue May 15, 2007 1:26 am

Quoting Mir (Reply 7):
That jet would also likely be departing out of TEB or HPN as opposed to LGA, EWR or JFK, and so would not contribute to the congestion at those airports.

The problem doesn't lie solely within the boundaries of airports. Biz jets departing TEB or HPN are just as likely to clog up New York Center airspace (and thus Cleveland Center airspace heading west). Sure they may cruise at FL430, but they have to get there.. and conversely, they have to fit in the arrival flow into the NYC terminal area.

And this is just New York we're talking about... not even Boston, DC, Chicago, or Oakland (centers) - to name a handful of the biggest ATC problems in the country....
Ask why..
 
vapar8
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 1:30 am

So if I pay the Tax as a GA pilot this should mean everytime I want to fly through class Bravo airspace they will let me?
 
AA717driver
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 1:31 am

The hole in the sky while on the CIVET arrival into LAX I make in a GV or GIV is the same size to a controller as the hole made by a 767. In fact, my aircraft is more of a pain because they have to figure out where I fit in while I'm at FL450 and the airline traffic is down in the 30's.

My aircraft is cruising at M.85 while the traffic flow I'm being wedged into is bopping along at M.82 or less.

Bizjets should pay more. $800 from NYC to FL may be a bit high but not exhorbitant. It's not like the boss is going to sell his Gulfstream and ride on Skybus... TC
FL450, M.85
 
sprout5199
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 2:15 am

I think the big issue will be having to pay for WX briefs, using flight following and such for prop jobs. As a rec pilot, I dont think I would pay for a WX brief just to fly for few hours around PBI, but since it is free right now I get a brief every time I go for a flight, even if it is just touch and goes at F45. And if you have to pay to use certain air space, most people would avoid it, and land their biz jets at places like F45. User fees are just wrong when it comes to safety related items.

Dan in Jupiter
 
airfrnt
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 2:21 am

Quoting Flyinryan99 (Reply 4):

Problem is...the G4s aren't clogging up the airports where ATC is the worst. Yes, there are a few airports they contribute some congestion but most of the airports where ATC is a problem, it's because of airline traffic.

From the article, and other reference material, the FAA estimates that corporate business jets consume about 60% of their available work load. That strikes me as being a bit out of line given the general prices that they are currently charging.
 
Mir
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 2:43 am

Quoting AA717driver (Reply 11):
The hole in the sky while on the CIVET arrival into LAX I make in a GV or GIV is the same size to a controller as the hole made by a 767. In fact, my aircraft is more of a pain because they have to figure out where I fit in while I'm at FL450 and the airline traffic is down in the 30's.

Well, that's LAX. If you were going to BUR, VNY or LGB, you wouldn't be on the CIVET, or any of the other arrivals to LAX. I have no problem with charging GA more at Class B airports like LAX, LGA or BOS - there are a number of alternatives available for each of those. But a blanket increase in taxes would have a drastic negative effect, particularly (perhaps ironically so) in areas that are out in the middle of nowhere where controllers would be thrilled just to get a few pilots per hour who want VFR flight following.

Quoting RJpieces (Reply 6):
Seeing as most airlines aren't making a profit, more like the airlines' costs will be lower

The airlines' costs would stay the same. Airlines don't pay the taxes themselves.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
flyinryan99
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 3:09 am

Quoting AirFrnt (Reply 13):

That doesn't sound right...I'm going to try and look up more statistics if I get some time on this.

*edit* I wonder if he is accounting every single small jet that takes to the sky. That would include Part 135 operators. Now...I'm still looking (maybe someone can enlighten me) to see exactly how the Part 135 operators pay into the AIP/ATC. If they pay a percentage of revenue into the AIP/ATC just like passengers, those numbers he is talking has to be way off. Again...I just don't see how 60% of the jets flying up there are corporately owned and not on a Part 135 certificate.

[Edited 2007-05-14 20:37:36]

[Edited 2007-05-14 20:41:12]
 
rjpieces
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 3:13 am

Quoting Mir (Reply 14):
The airlines' costs would stay the same. Airlines don't pay the taxes themselves.

Oh? Who does?
"Millions long for immortality who do not know what to do with themselves on a rainy Sunday afternoon"
 
Mir
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 3:35 am

Quoting RJpieces (Reply 16):
Oh? Who does?

You. And me. And anyone else who books a ticket. It's all part of the "taxes and fees" that get added onto the base fare. Very rarely will a business eat a tax - they tend to pass it on to the consumer.

Quoting Flyinryan99 (Reply 15):
Quoting AirFrnt (Reply 13):


That doesn't sound right...I'm going to try and look up more statistics if I get some time on this.

That doesn't sound right to me either.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
ContnlEliteCMH
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 3:44 am

Quoting AirFrnt (Reply 13):
From the article, and other reference material, the FAA estimates that corporate business jets consume about 60% of their available work load. That strikes me as being a bit out of line given the general prices that they are currently charging.

Forget about what they're charging. Let's just look at some simple numbers to see if this is believable.

Per http://www.bts.gov/press_releases/20...2_07/html/bts022_07.html#table_01, the industry flew 715,900 flights in February '07 per Table 7.

Shouldn't we assume that all commercial flights have to be "handled" by ATC? If so, in order for small jets to be 60% of their workload, this would require nearly *1.2 million* small jet flights in February. Maybe I'm completely out of touch with what I observe at airports, but this is an outrageous number and totally unbelievable. I *might* believe 100,000 small jet flights per month, in which case the amounts presently charged are not so far out of line. I might even believe more, but 60%?
Christianity. Islam. Hinduism. Anthropogenic Global Warming. All are matters of faith!
 
Jpax
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 4:23 am

Quoting Sprout5199 (Reply 12):
I think the big issue will be having to pay for WX briefs, using flight following and such for prop jobs. As a rec pilot, I dont think I would pay for a WX brief just to fly for few hours around PBI, but since it is free right now I get a brief every time I go for a flight, even if it is just touch and goes at F45. And if you have to pay to use certain air space, most people would avoid it, and land their biz jets at places like F45. User fees are just wrong when it comes to safety related items.

To add, I believe they (FAA) were proposing a user charge for precision approaches. That spells catastrophe.

And in agreement, I also do not think I would pay for a WX brief especially since the cost of GA has already risen significantly over the past years and is still rising. The brief, airspace fees, etc would easily tack on a double digit charge to the already expensive flight bill. No thanks!
 
PPVRA
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 4:55 am

Quoting AirFrnt (Reply 13):
From the article, and other reference material, the FAA estimates that corporate business jets consume about 60% of their available work load.

At least from the impression I get from the article, that's according to Senator Jay Rockefeller--not the FAA. I think Senator Rockefeller meant to say two-thirds are GA flights, not just private jets.
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Mir
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 5:11 am

Quoting PPVRA (Reply 20):
I think Senator Rockefeller meant to say two-thirds are GA flights, not just private jets.

That's probably correct. And, of course, a very sizable percentage of GA flights do not get involved in the ATC system.

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
Mach3
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 5:47 am

Very little of the money collected from the Airport and Airways Taxing finds it way back into the system. Congress is reluctant to tap that fun since they use is to offset the budget losses. With the current make up of the FAA could you imagine the enept FAA geting its hands on the money in the fund and wasting it all on unfounded programs as it has in the past. Giving the FAA that money would be like giving a drunk a case of Booz! It would be gone quickly and nothing to show for it. The Aviation Community is scares crapless the force the use of the money and and cowtows to the FAA. Just think how much better our airways system would be if that money were used and the FAA had hard accountability on its use of it.
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skibum9
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 7:08 am

Quoting Seattle Ops (Reply 8):
Its about time the corporate jets paid their way!

I don't mind corporate paying its share, however the bill will impact all of GA. So the guy flying around his Cessna, who can least afford it, will get hit hard. As a result, this bill will cripple GA. Also GA guys will be less likely to use ATC, because of the cost, and you will see a rise in accident rates.

Quoting Vapar8 (Reply 10):
So if I pay the Tax as a GA pilot this should mean everytime I want to fly through class Bravo airspace they will let me?

I would think so, treat a 767 the same as a GIV, and the same as a C152. If it passes I will start to use the primary airports instead of relievers.

Quoting Sprout5199 (Reply 12):
I think the big issue will be having to pay for WX briefs,


There is plenty of free information available on the Internet, from DUATS, NOAA, etc. However, flight following will be the issue, along with filing IFR. If the costs go up, you will see people take risks more and more to avoid the costs. And the accident rates will rise.
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Tornado82
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 7:23 am

As a degreed meteorologist I can give myself a better briefing than a briefer can in many cases as far as the wx goes (I would hope I can anyways, haha), but I still like filing that VFR flight plan for any xc type of flight, and using flight following depending where I'm going... not to mention finding out about those pesky TFR's. You never know where George, Dick, Condy, etc. are going to be travelling to and bringing their TFR circus to town with them. Internet sources don't always update those as well as I'd like them to. And I don't think any of us wants to play chicken with an F-16.
 
3201
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 7:30 am

Fractionals and other bizjets are where nearly all the premium revenue is, so they should definitely be paying taxes and fees at at least the rate of airlines. The example quoted in the article seems about right under the change (GIV paying about 2/3 as much as a 757 instead of about 1/9). Honestly, I'm a little bit surprised to see where some of the politicians are falling on this one.

Quoting AirFrnt (Reply 3):
Charge people according to what your costs are. (That I suspect won't be popular on A.net).

I think they should jack bizjet charges way up, but I completely disagree with the "charge people according to what your costs are" pricing model. You should charge people according to what value they get from a product or service, and given the current revenue model for bizjets/airlines, bizjet operators get higher value and thus should pay at a higher rate.

They do need to make sure it doesn't hit GA, though.
7 hours aint long-haul
 
Boeing727flyer
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 7:33 am

Nice to see Bush sticking it to aviation again - lets see how long it lasts when he realises that his Father charters a private Gulfstream as do most senators and ex presidents.
Hail the mighty Boeing 727
 
3201
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 7:44 am

Quoting Boeing727flyer (Reply 26):
Nice to see Bush sticking it to aviation again - lets see how long it lasts when he realises that his Father charters a private Gulfstream as do most senators and ex presidents.

All those guys have so much $$$, and pay big enough bills, they'll never even notice the difference. No one will stop flying fractionals or bizjets because the per-segment fees go up by a few hundred bucks, and this will allow airlines to raise their actual fares a little bit by lowering passenger fees with the same real cost to passengers. This is not sticking it to aviation at all -- it's a shockingly good economic decision (enough so to make you wonder where it came from).
7 hours aint long-haul
 
skibum9
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 7:46 am

Quoting Boeing727flyer (Reply 26):
Nice to see Bush sticking it to aviation again - lets see how long it lasts when he realises that his Father charters a private Gulfstream as do most senators and ex presidents.

Yep.....With his approach it won't be long until you see user fees for boaters to pay for the Coast Guard, user fees for cars drivers to pay for Highway Patrol, user fees to those who fly RC planes or launch model rockets to fund NASA, user fees for taking a piss to pay for water processing facilities, etc. Meanwhile, Exxon and others who the government protect will continue to set record profits. All in Bush's effort to kill the middle class.
Tailwinds!!!
 
khobar
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 7:52 am

Quoting Boeing727flyer (Reply 26):
Nice to see Bush sticking it to aviation again - lets see how long it lasts when he realises that his Father charters a private Gulfstream as do most senators and ex presidents.

How is Bush sticking it to aviation again?

Quoting Skibum9 (Reply 28):
All in Bush's effort to kill the middle class.

Wow, the middle class are flying around in Gulfstreams? Go on...you made that up!
 
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Tugger
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RE: Buffett Battles Bush As Corporate-Jet Owners F

Tue May 15, 2007 7:55 am

Quoting 3201 (Reply 25):
I think they should jack bizjet charges way up, but I completely disagree with the "charge people according to what your costs are" pricing model. You should charge people according to what value they get from a product or service, and given the current revenue model for bizjets/airlines, bizjet operators get higher value and thus should pay at a higher rate.

They do need to make sure it doesn't hit GA, though.

Excellent post! I agree that the value of the service is the key. We don't to hobble the base of the entire aviation sector while at the same time many people here have pointed out (rightly or wrongly) that many F class people are instead going by charter, lease, or corp jet. If their time is worth $500 - $1,000+ an hour then they are a prime market that will be willing to pay this. Not that they won't fight it tooth and nail and lobbyist and campaign donation.

Tug
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Tornado82
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 8:01 am

Will a G4 going, let's say TEB-MDW, at FL380, pay the same fees as a VLJ going TEB-MDW at FL380 (some do reach FL380)? The VLJ is slower, therefore will be in the air longer than the G4. However if you do that, there will be more expenses in taxes charged to a VLJ than there will be in DOC.
 
Molykote
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 8:04 am

Quoting Skibum9 (Reply 28):
Yep.....With his approach it won't be long until you see user fees for boaters to pay for the Coast Guard, user fees for cars drivers to pay for Highway Patrol, user fees to those who fly RC planes or launch model rockets to fund NASA, user fees for taking a piss to pay for water processing facilities, etc. Meanwhile, Exxon and others who the government protect will continue to set record profits. All in Bush's effort to kill the middle class.

Incredible! Aren't you getting a bit ahead of yourself?

This proposal seems to alleviate a tax burden on the "middle class" flying around on our nation's airlines while passing the fees on to executives and other very wealthy private jet users. Yet, Bush is accused of a plan to "kill the middle class" with this proposal?
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3201
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 8:23 am

Quoting Molykote (Reply 32):
Incredible! Aren't you getting a bit ahead of yourself?

This proposal seems to alleviate a tax burden on the "middle class" flying around on our nation's airlines while passing the fees on to executives and other very wealthy private jet users. Yet, Bush is accused of a plan to "kill the middle class" with this proposal?

I agree 100% with this. The middle class are the ones being overtaxed by the current system. This is an uncharacteristic move of restoring a tiny bit of life into the middle class, $3 at a time.  Smile And at the same time, it helps the airline industry a lot, even more if a few people currently using fractionals do decide this tips the scale back to buying premium tickets on airlines.
7 hours aint long-haul
 
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Acey559
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 10:21 am

It's just my luck that right after I get my instrument rating, user fees might be implemented.  banghead 
 
flyinryan99
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 10:21 am

Quoting 3201 (Reply 25):
Fractionals and other bizjets are where nearly all the premium revenue is, so they should definitely be paying taxes and fees at at least the rate of airlines. The example quoted in the article seems about right under the change (GIV paying about 2/3 as much as a 757 instead of about 1/9). Honestly, I'm a little bit surprised to see where some of the politicians are falling on this one

Again...Fractionals and a lot of Bizjets/turboprops are Part 135 operators...I'll pose the question: do the 135 operators pay tax to the Aviation Trust Fund?? If that is the case the 2/3 number isn't accurate. That 2/3 number will change to something like maybe 1/11 or whatever...I don't know the answer to my question so I hope someone can enlighten me.

Thanks
 
Mir
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 10:23 am

Quoting 3201 (Reply 27):
this will allow airlines to raise their actual fares a little bit by lowering passenger fees with the same real cost to passengers.

As long as airlines continue to quote their prices without taxes included, the amount of tax will factor little into a person's decision to buy or not to buy a ticket. $100 is more attractive than $105, even though when taxes are factored in the total for both will come to $110.

Quoting 3201 (Reply 25):
Fractionals and other bizjets are where nearly all the premium revenue is, so they should definitely be paying taxes and fees at at least the rate of airlines.

What would you say if I told you that bizjets currently pay about five times as much fuel tax per gallon as airlines do?

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
bond007
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 10:42 am

Quoting Flyinryan99 (Reply 35):
That 2/3 number will change to something like maybe 1/11 or whatever...I don't know the answer to my question so I hope someone can enlighten me.

Well, to answer part of your question ... of all IFR flights, corporate and charter (Part91/135) account for around 15%.


Jimbo
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Theoden
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 12:09 pm

If the cost for me to fly a Cessna becomes prohibitive and I can no longer fly, the FAA will receive nothing from me whereas before they received something through the fuel tax. This is not good for me or the FAA.

Shifting the tax from airline passengers to "wealthy bizjet users" will not help the middle class. Bizjet users are actually companies who sell things to consumers. The prices of those things will go up along with the increased tax.

-Theoden
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kbfispotter
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 12:28 pm

Quoting Molykote (Reply 32):
This proposal seems to alleviate a tax burden on the "middle class" flying around on our nation's airlines while passing the fees on to executives and other very wealthy private jet users.

Sorry, it will not work that way... As already stated, the airlines do not pay the tax, they pass it on to you, the consumer. But stop and think about that for a minute... Do you think that the airlines will really let ticket prices drop by a little (even as little as $10)? I think not. Ticket prices will stay the same, and they might even rise. Someone, I believe it was AOPA, did a study on this, and it was revealed that if user fees do go into practice here in the US, ticket prices might actually go up, not down.

Quoting Mir (Reply 36):
What would you say if I told you that bizjets currently pay about five times as much fuel tax per gallon as airlines do?

Add to that all of GA, not just bizjets. Under the user fees idea, the gas tax on Jet A AND Avgas will increase several times, and the taxes on avgas are already terrible.

It is the airlines that are pushing for user fees, and they are basically shooting themselves in the foot. Soon, it will become so expensive to fly recreationally, that the flight training industry will dry up. I wonder what they will do in ten years when they realize that they cannot find any new pilots because no one can afford to fly GA, let alone afford instruction to get their licence.

For more info on the true impact of user fees, check out www.aopa.org/faafundingdebate/


Kris
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3201
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 12:33 pm

Quoting Theoden (Reply 38):
Shifting the tax from airline passengers to "wealthy bizjet users" will not help the middle class. Bizjet users are actually companies who sell things to consumers.

Ah yes, I forgot, on all those blue-chip business routes like HPN-PBI, HPN-NAS, TEB-LAS, TEB-SJU, VNY-KOA, VNY-OGG, and wherever the PGA tour is going this week.  Wink

Airline users are actually companies who sell things to consumers, too, so that one's at most a wash.
7 hours aint long-haul
 
jbernie
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 12:33 pm

So to ask a question to any controllers out there, how much ATC traffic did the super bowl generate last year with all those biz jets flying in/flying out of the general area? And in doing so the ATC had to ensure they all got in and out safely without causing issues with commerical traffic.

The current setup seems to be like saying rich people with chauffuer driven limos should pay less for using the roads etc than a normal person driving themselves.

If you are dropping US20 million plus on a biz jet, then crying poor over an increase in these charges won't get one ounce of sympathy from me.
 
Theoden
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 12:43 pm

Quoting Jbernie (Reply 41):
Airline users are actually companies who sell things to consumers, too, so that one's at most a wash.

This is my point, that it doesn't help the middle class to shift the taxes around, the consumer will end up paying for it one way or another. This is why I believe the focus should be on improving efficiency, not just charging more.
Fear no darkness!
 
3201
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RE: Buffett Battles Bush As Corporate-Jet Owners F

Tue May 15, 2007 12:56 pm

Quoting Theoden (Reply 42):
This is my point, that it doesn't help the middle class to shift the taxes around, the consumer will end up paying for it one way or another.

I disagree. If that were the case, you might as well just randomly pick one operator and have them pay all the taxes. It does matter how they're distributed, not just what the total is, and I still think it does help the middle class to shift more to the fractionals and other bizjet operators. The fractionals are already badly out-competing the airlines for premium yields and completely destroying the non-LCC airline business model because of it. People who want mainline carriers to match LCC fares in economy but still provide FF programs, upgrades, international service, code-shares and alliances, etc., none of that can work without some high yields to balance it all out, and they're gone. That's capitalism, but at least those fractionals should be paying their fair share in taxes & fees compared to the airlines, to make it a little more even.
7 hours aint long-haul
 
PPVRA
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RE: Buffett Battles Bush As Corporate-Jet Owners F

Tue May 15, 2007 1:46 pm

Quoting 3201 (Reply 43):
The fractionals are already badly out-competing the airlines for premium yields and completely destroying the non-LCC airline business model because of it. People who want mainline carriers to match LCC fares in economy but still provide FF programs, upgrades, international service, code-shares and alliances, etc., none of that can work without some high yields to balance it all out, and they're gone. That's capitalism, but at least those fractionals should be paying their fair share in taxes & fees compared to the airlines, to make it a little more even.

Agree completely  checkmark 

Someone mentioned a figure above, somewhere close to two billion USD could be saved by airlines. That's a good deal. Maybe the airlines wouldn't drop the fares, but so what? It'll help them get out of their financial hole and buy modern, efficient, more comfortable aircraft for me to fly on. Or at least help finance an aircraft upgrade or a new (or any kind of) IFE .

Further, as mentioned above, Delta/American/United/Northwest are paying for ATC costs that should be going to Netjets, VLJ operators, etc., who are taking away premium customers from them. They are funding their competition.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
Molykote
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 1:54 pm

Quoting KBFIspotter (Reply 39):
Sorry, it will not work that way... As already stated, the airlines do not pay the tax, they pass it on to you, the consumer. But stop and think about that for a minute... Do you think that the airlines will really let ticket prices drop by a little (even as little as $10)? I think not. Ticket prices will stay the same, and they might even rise. Someone, I believe it was AOPA, did a study on this, and it was revealed that if user fees do go into practice here in the US, ticket prices might actually go up, not down.

I am not sure I agree with your assertion about ticket prices. However, I'll entertain the following:

At one extreme, perhaps ticket prices (or more specifically, consumer monetary outlay for a ticket purchase) will drop by some amount related to this tax reduction on airline travel.

At the other extreme, airlines might increase fares by an amount that would keep the consumer's monetary outlay for a ticket purchase constant while increasing the airline's revenue.

In either case, it is likely that "middle class" airline travellers will:
(1) Benefit by saving money (if ticket prices are not increased and taxes are reduced)
--------OR-------
(2) Airlines and consumers mutually benefit by allocating the dollar difference (from reduced taxes) to the airlines rather than the federal government.
--------OR-------
(3) Something between 1 and 2.

For an equal financial outlay, I'd rather see a few extra dollars go to the revenue pool an airline I will depend upon for future travel rather than into a federal tax pool.

I can appreciate your argument that airlines will be unlikely to give up a potential source of revenue (if taxes are reduced and all else remains equal). However, the reality of a competitive marketplace suggests that it's unlikely that it would be possible for a given airline to "reclaim" this tax reduction as revenue for the company (so long as airline X is competing with airline Y). If all airlines suddenly acquired jets that are 20% more efficient than current aircraft (but otherwise offer equal value to the consumer), it's unlikely that airfares would not change. More than likely, ticket prices would drop to some degree for the consumer and profit would increase to some degree for the airline as different airlines compete for business.

Additionally, it's not as if AOPA doesn't have a dog in this hunt. I'd take their input with a grain of salt (just as I would any organization that advocates narrowly for a common interest group).
Speedtape - The aspirin of aviation!
 
Mir
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 1:57 pm

Quoting 3201 (Reply 43):
at least those fractionals should be paying their fair share in taxes & fees compared to the airlines, to make it a little more even.

What taxes and fees are they not paying?

-Mir
7 billion, one nation, imagination...it's a beautiful day
 
ckfred
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RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 2:44 pm

My wife's company is in love with bizjets. Frankly, the shifting of the tax burden is a good thing.

I figured out that the company could save $2500 by sending ten employees on American Eagle, rather than using a Falcon 20. Further, by using Eagle, they would have a longer day at the client's office, since the bizjet first comes from company HQ to my wife's office, then does the trip to the client's office and back, finally going back to HQ.

Perhaps by increasing the fees that bizjets have to pay, companies will quit clogging up the skies with Gulfstreams, Falcons, and Lears.

I know that bizjets are more convenient than commercial jets, but this isn't the 1970s, when the only way to stay in contact with the world was via payphones. Between cellphones, pagers, and Wi-Fi, a delay at ORD isn't the time waster that it was 30 years ago.
 
JoeCanuck
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RE: Buffett Battles Bush As Corporate-Jet Owners F

Tue May 15, 2007 2:48 pm

If they want to stick to the folks who fly above 180, go ahead. I don't think it'll make one bit of difference to the ailines because they'll piss away any savings they make anyway and reward their customers with higher ticket prices while maintaining crap service.

Making a distinction between the big boys and their expensive toys and the cats running around breathing unpressurised air, is quite important, I think. It would also be an easy way to implement the tax. File above 180, you pay. The G-v's, etc, won't fly that low because it would cost them that much in fuel and time.
What the...?
 
kbfispotter
Posts: 658
Joined: Sat May 14, 2005 5:56 pm

RE: Buffett Battles Bush As Corporate-Jet Owners Fight

Tue May 15, 2007 3:58 pm

Quoting Ckfred (Reply 47):
Perhaps by increasing the fees that bizjets have to pay, companies will quit clogging up the skies with Gulfstreams, Falcons, and Lears.

The skies are not clogging up with bizjets, as you say. Last time I checked, there were many more airliners airborne over the US at one time than corporate aircraft.
Case in point: At this time, 11:39 PDT, 05/14/2007, there are 838 aircraft currently airborne that are airline use (B1900 and larger, and yes, I know that some could be operated by 135 operaters), 142 aircraft that are considered Corporate (Cessna 208 Caravan and larger), and 68 piston powered aircraft (ranging from a Cessna 172 up to a Piper Navajo). I got this info from flightaware. Now I realize that it is the middle of the night, and that this list is only the aircraft that have filed flight plans, but most bizjets would be flying IFR, which requires direct contact with ATC and a flightplan. Thus, the sky is not littered with bizjets, it is littered with airliners.

Quoting Ckfred (Reply 47):
I figured out that the company could save $2500 by sending ten employees on American Eagle, rather than using a Falcon 20. Further, by using Eagle, they would have a longer day at the client's office, since the bizjet first comes from company HQ to my wife's office, then does the trip to the client's office and back, finally going back to HQ.

How did you figure that? If this is the case, then your wife's company is not using their resources correctly. The main idea of having a corporate aircraft is to get the business personel close to the clients quicker than the airlines can. Most bizjets can file direct to the destination, or fairly close to direct, and can traverse the country faster. If a company is based on the east coast of the USA and needs to get someone to Small Town USA on the west coast, their best option is to use a bizjet. They can fly higher, thus avoiding the congested altitudes, and saving time, while at the same time they can get to an airport closer to the client and not have to worry about the hassle of dealing with a crowded terminal. If any thing, a bizjet would allow your wife's company a longer time with the client than if they traveled by airline.

Kris
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