The New York Times says that regular, everyday flyers who pay the 7.5% U.S. Transportation Tax as part of their airline tickets are subsidizing the maintenance and operation of the national air transport systems, which private jets are getting a virtually free ride on.
It’s come up again.
Every few years, someone does the math on how many private jets are traveling in U.S. airspace, then compares it with the amount of taxes private jet users pay into the system. This time, it’s the New York Times Editorial Board, which points out that private jet users account for less than 1% of the Federal Aviation Administration’s (FAA) tax revenues, but account for 7% of the traffic in U.S. airspace.
The New York Times states that this means regular, everyday flyers who pay the 7.5% U.S. Transportation Tax as part of their airline tickets are subsidizing the maintenance and operation of the national air transport system, while private jets are getting a virtually free ride. Because private jets don’t sell tickets, they’re not subject to the transportation tax (cargo is charged a tax similar to the passenger tax, while foreign aircraft overflying the U.S. without landing also pay into the ATC system). To counteract this, private aircraft pay a tax on fuel, but it doesn’t make up the difference.
The National Business Aviation Association (NBAA) calls that a false narrative. In a letter shared on their website, they argue that the taxes general aviation (which includes private jets) pays into the system cover its use of the system, because the hub-and-spoke models that major airlines use are what drive cost and complexity, requiring significant staffing and infrastructure to manage.
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NBAA points out that when general aviation was barred from Washington, D.C.’s Ronald Reagan Washington National Airport (DCA) following the 9/11 attacks, there were virtually no impacts on airport costs.
The NBAA also points out that many of the airports used by general aviation aircraft are smaller, often without staffed control towers, so their use of the system is proportionally smaller than that of the nation’s airlines.
The association didn’t address the New York Times’s proposal that the United States should adopt a system similar to that in Canada. There, users of NAV CANADA, a private, not-for-profit company, are charged based on the weight of the aircraft and distance flown. As the New York Times points out, the incongruity in American ATC funding is that individual passengers pay the bill, but it’s aircraft, not individual passengers, that are ultimately the units counted by the ATC system.
The FAA isn’t entirely supported by passenger taxes. Some of the agency’s budget also comes from the General Fund, because airline passengers aren’t the only taxpayers with an interest in keeping their airplanes flying safely—taxpayers who don’t fly also have an interest in keeping airplanes from falling on their heads. The FAA also charges various user fees for licensing and certifications, collects fines, and manages congressionally appropriated grants.
The NBAA also generally advocates that business travel by private aircraft benefits the U.S. economy by increasing productivity. Businesses that need to move workers between, say, Appleton, Wisconsin, and Toledo, Ohio, can do so without routing them on multi-hour journeys through the airlines’ hub-and-spoke networks. They can also fly them into closer general aviation airports, saving time and expense on ground transportation and airport check-in and screening.
Sales of private jets are set to increase again this year, as there are new provisions in the most recent federal spending bill that revive earlier tax cuts for private jet purchases that are used for business. Previously, companies purchasing the jets would have to spread out the value of their private jet purchases across several years when filing their taxes. Now, they can deduct the entire cost of the aircraft within a single tax year.
To passengers sitting in an economy seat on a flight delayed because of staffing shortages at an agency whose own ticket taxes are the primary revenue source for, that’s cold comfort.