The National Business Aviation Association (NBAA) and the General Aviation Manufacturers Association welcomed a proposal, announced last week, that would give U.S. companies tax benefits to help preserve manufacturing jobs, while allowing companies immediate access to the benefits of business aircraft.
“NBAA is pleased that the administration and congressional leaders are considering additional ways in which tax incentives can be applied to investments in strategic business assets, including aircraft,” said NBAA President and CEO Ed Bolen.
The tax proposal, first outlined by the White House, would include allowing businesses 100% expensing of investments in capital assets through Dec. 31, 2011, retroactive from Sept. 8, 2010, and an accelerated, or “bonus,” depreciation allowance of 50% during 2012. A bonus depreciation extension through the end of 2010 has already been signed into law. Purchasers of noncommercial aircraft will have an extra year to put the plane in service and qualify for expensing and bonus depreciation.
NBAA was briefed on the proposal in a conference call with White House senior staff to outline the President’s overall plan for taxes and unemployment insurance, which includes several provisions designed to boost employment and accelerate business investments through 2012.
“We will continue working to underscore the importance of initiatives like the one outlined by the White House, which will preserve business aviation manufacturing jobs, while also giving companies immediate access to the efficiency, productivity, competitive and other benefits that come with the use of an aircraft,” Bolen said.
“We could not be more pleased by the bipartisan effort that resulted in a swift passage of this tax bill through both chambers of Congress and now to the president,” said GAMA President and CEO Pete Bunce. “This important legislation contains two provisions that are critical to the recovery of the general aviation manufacturing industry. The first permits 100% depreciation of capital investments including aircraft engines, avionics and other upgrades to aircraft during 2011 and 50% depreciation of investments made in 2012. Due to their longer production cycle, general aviation aircraft will also be eligible for 100% depreciation in 2012 and 50% in 2013. The bill also extends the important research and development (R&D) tax credit for two years, which will allow businesses to receive credit for this year’s (2010) research expenditures and also permit companies to plan for 2011.”
Bunce added, “This bill will help provide the certainty and incentives our manufacturers need to start growing again by encouraging investment and creating demand. Most importantly, these provisions will boost job growth in 2011 and beyond and support a critical sector in the U.S. and global economy.”
Far better would be for the government to get out of the habit of picking winners and losers. This news is little more than confirmation that the alphabets are focused on lobbying Congress to “bring home the bacon”. Voters have repeatedly demanded an end to pork barrel spending, which is exactly what these tax breaks represent.
Far better would be adopting the FairTax, which would end ALL income taxes, individual and corporate.
http://www.FAIRTAX.org