President Joe Biden is proposing a huge increase in fuel taxes for private jets, which his administration is pitching as a fairness issue compared with airline passengers, who pay special taxes on every ticket.
The proposal was included in a $109.3 billion budget request for the U.S. Department of Transportation, which was released Monday.
The fate of the proposal in Congress is unclear. Many of Biden’s budget ideas will founder in the Republican-controlled House. The largest business-aviation trade group came out against the targeted fuel-tax increase, saying private jets help companies succeed and create jobs.
The White House earmarked nearly $22 billion for the Federal Aviation Administration, including funds to hire at least 2,000 new air traffic controllers, and replace aging FAA facilities, which FAA Administrator Mike Whitaker said are 40 years old on average. Democrats and Republicans in Congress have supported more FAA hiring of air traffic controllers and safety inspectors.
The budget would also set aside $62 billion for roads and bridges and $3.2 billion for railroad infrastructure, inspections and the Amtrak passenger-rail system.
The budget would gradually raise the tax on fuel used by private jets from about 22 cents per gallon now to $1.06 per gallon in five years. The Transportation Department says the increase would help stabilize funding for FAA’s management of the national airspace, which is mostly paid by airline passengers.
Airline passengers pay a 7.5% excise tax on tickets and a separate levy of up to $4.50 per flight to help pay for airport projects.
The administration says that private jets account for 7% of all flights handled by the FAA but less than 1% of taxes that fund the federal trust fund for aviation and airports. The Transportation Department said the proposal would raise $1.1 billion over five years.
Biden hinted at the proposal in last week’s State of the Union address, right after he called for raising the minimum income tax on corporations.
“I also want to end tax breaks for big pharma, big oil, private jets, massive executive pay,” he told Congress.
Ed Bolen, president of the National Business Aviation Association, said Biden was being unfair.
“Business aviation is an industry that is essential to America’s economy and transportation system,” he said. “It supports jobs, connects communities, helps companies succeed and provides humanitarian lift in times of crisis. This is an industry that should be promoted, not pilloried.”
