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ICYMI: Democrats lie again about Senate tax bill

- December 6, 2017

Does the Senate tax bill really offer a tax break for private jets, as key Democrats claim?
Washington Post
Nicole Lewis
December 6, 2017
...

"The Republican tax bill, which passed in the Senate during the wee hours of the morning on Dec. 2, contains a provision addressing the way private jets are taxed. Many on the left, who have criticized the GOP tax plan as a benefit to corporations and the super-rich and a burden for the middle class, have seized on this portion of the bill, characterizing it as a tax write-off for private jets.

"One of the most widely shared claims came from Sen. Kamala D. Harris, who tweeted, 'Retweet if you would *not* benefit from a private jet tax break,' on Nov. 17, linking to a Business Insider article with the headline, 'The Republican tax bill has a provision that would end a headache for private jet owners.' Harris’s tweet prompted nearly 69,000 retweets and more than 35,000 likes.

"The characterization fits Democrats’ narrative that the tax bill caters to the super-rich, but is it accurate? Let’s have a look.

"If you’ve ever purchased a plane ticket, you’ve probably noticed that a portion of the ticket price pays for 'taxes and fees.' One of those taxes is the federal excise tax, which is generally triggered when a person or entity provides an aircraft with crew and sells tickets to passengers. Currently, the excise tax is set at 7.5 percent, and it mostly applies to commercial airlines.

"Private jets, which are owned by individuals or groups of individuals, have operated under a gray area with respect to the tax…

"In 1958, the Internal Revenue Service’s Revenue Rule 58-215 exempted corporate-owned planes that are lent to airline companies from the excise tax.  But the rule didn’t provide total clarity for a new kind of private plane ownership in which individuals own a share of a private jet and lend it to management companies for chartered flights…

"When the Senate voted to pass the GOP bill, with the provision included, it settled the debate over whether the companies should be charged an excise tax on management fees. In short, the provision provides regulatory clarity to the IRS.

"So how did these Democrats come to regard the bill as a tax break for private jets? Well, some media outlets jumped on the provision, calling it a tax break in their reporting…

"The Pinocchio Test

"Several Democratic leaders claimed the GOP bill provided a tax break for private jets, adding to their case that the bill was heavily weighted to corporations and the super-rich. While the cause is well-intended, the characterization of the excise tax clause as a tax break is misguided. The provision provides regulatory clarity on a tax that has never successfully been imposed on private jet management companies. In short, the companies can’t receive a break on taxes that were never collected.

"Harris defends her tweet, arguing that they are simply describing the provision as it was reported in the media as a tax break. But that was not the case with the article she retweeted — which also noted that the tax provision was valued at less than $50,000 a year. Moreover, several outlets offered a detailed take on the provision, making clear it the clause aimed to settle a decades-long dispute between the IRS and private jet management companies.

"Still, these tweets are not alike. Harris earns Three Pinocchios for referring to a ‘private jet tax break’ and suggesting wealthy owners would gain.



"But Merkely and Perez each earn Four Pinocchios for falsely suggesting that education and health care were slashed to pay for this $50,000-a-year 'tax break.'"

To read more, click here.


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