Class Warfare versus Economic Growth

Class Warfare versus Economic Growth: "

Photo: Cessna

Tuesday, a report called 'Obama Reignites BizJet Public Relations Battle' appeared in AWST's Weekly of Business Aviation that explains how the White House continues to bash corporate jets as a means by which to inflame populist passions about rich versus poor. The President seems oblivious to the fact that general aviation employed 1.2-million mostly middle class people and contributed $150-billion to the economy prior to the 2008 - 2009 recession. The industry has been devastated by the economic downturn and then kicked in the face while it was down by "vilification and mischaracterization" by the President and his allies on Capitol Hill.

The President seems to be saying, 'If only the corporate jet set would pay their fair share, Congress wouldn't have to cut programs for needy kids.'

Talk about Voodoo Economics.

Roll back accelerated depreciation for corporate jets and you'll save less than $3-billion during the next decade, according to Reuters Economist James Pethokoukis. Is the proposed roll back in depreciation benefits thus more about soak-the-rich "tax fairness" than actually raising "tax revenues"? Never mind the points raised by general aviation industry and labor groups about his disparaging remarks contributing to the loss of 20,000 good paying union jobs. Or the fact that he signed into law a bill, crafted when Democrats controlled both the House and the Senate, that greatly increases tax depreciation of business aircraft as a means to stimulate sales growth.

Still think that waging class warfare by rolling back or eliminating tax benefits for business aircraft will significantly reduce the national debt? David Wessel of the Wall Street Journal asserts that every one percent in the nation's economic growth in 2011 would reduce the deficit by nearly $100-billion during the next decade. That's 33 times the increase in tax revenues that "soaking the rich" would yield.

So, how can the deficit be reduced and thus growth of the National Debt be minimized? "It's the Economy, stupid," as President Bill Clinton said. Wessel points out that a housing market recovery, a boost in hiring, renewed consumer confidence and robust investment in infrastructure are critical to stimulating the economy and thus increasing tax revenues.

Perhaps it's time for the White House to focus on sound economic policy for 2011 rather than 2012 election year populist politics. If the goal really is to grow the economy, part of that focus ought to include promotion of general aviation.

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