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FAA, airlines still on same flight plan: Tax increases for GA

The airlines and the FAA remain "on message" as far as one thing is concerned — a huge tax increase for general aviation, a tax decrease for the airlines.

In her speech to a crowd of pilots at Oshkosh on July 26, FAA Administrator Marion Blakey continued to push the FAA's preferred funding mechanism, which includes a tax of 70 cents per gallon on aviation gasoline as well as user fees to fly in Class B airspace.

"Without a cost-based system that provides dedicated revenues for NextGen (next generation) projects like ADS-B, there's the very real possibility that you won't be able to fly when you want, where you want," Blakey said. "I can't put it any plainer than that."

What she didn't say, is that the airlines — who are clamoring the loudest for NextGen — would get a net tax reduction of about $1 billion a year, while general aviation would pay nearly $1 billion more under the FAA proposal.

It's somewhat surprising that the FAA continues to push its user fee/tax proposal since Congress has rejected it.

But not surprising is that the airlines continue to advance proposals that give them a tax break at the expense of the individual pilots who pay out of their own pockets.

The Air Transport Association (ATA), which represents 18 passenger and cargo airlines, proposed a new passenger ticket tax before the Senate Finance Committee on July 19.

ATA hasn't yet put any actual numbers to its proposal, but it's pretty clear where they want to go.

The airline tax plan would exempt the first 250 miles of every flight from some of the taxes. But as the Alliance for Aviation Across America points out, that would mean the airlines wouldn't pay their proposed " variable distance tax" on some of their most profitable routes through the nation's most congested airspace.

Washington, D.C.-New York, Boston-New York, Philadelphia-New York, Houston-Dallas, Chicago-Detroit, St. Louis-Chicago, Los Angeles-Las Vegas — all examples of routes where the airlines have exempted themselves from their proposed tax.

According to the Alliance (a coalition of general aviation, local airports, civic organizations, small and mid-sized businesses, and rural and agricultural interests), "25 percent of the top 12 busiest routes in the country would be tax exempt under the airlines' proposal, creating a significant loss of revenue for air traffic modernization."

"General aviation wants and is willing to help pay for NextGen and air traffic control modernization," said AOPA President Phil Boyer. "We've even accepted the modest tax increase to do so. What we won't accept is a huge airline tax break at our expense, or user fees.

"That's why the GA community supports H.R.2881 — the House FAA funding bill — as the best way to modernize, improve our airports, and to share the cost burden among all segments of aviation through a fair and efficient excise tax system."

July 27, 2007

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