Polluting private jets could face a 400% fuel tax increase under new Biden proposal

Planes are parked at a private jet terminal at Harry Reid International Airport ahead of the Super Bowl, 1 February 2024, in Las Vegas. - Copyright AP Photo/John Locher, File

By David Koenig with APTN

Published on 12/03/2024 - 18:00

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The tax increase on fuel for private jets has been cast as making wealthy pay their share.

US President Joe Biden is proposing a huge increase in fuel taxes for private jets. It is being pitched as a fairness issue compared with airline passengers, who pay special taxes on every ticket.

The proposal was included in a $109.3 billion (€100b) budget request for the US Department of Transportation, which was released on Monday.

The fate of the proposal in Congress is unclear. Many of Biden's budget ideas will flounder 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.

Private jet fuel taxes could rise by almost 400%

The budget would gradually raise the tax on fuel used by private jets from about $0.22 (€0.20) per gallon (3.8 litres) now to $1.06 (€0.97) per gallon in five years.

The Transportation Department says the increase would help stabilise funding for the Federal Aviation Administration's (FAA) management of the national airspace, which is mostly paid by airline passengers.

Airline passengers pay a 7.5 per cent excise tax on tickets and a separate levy of up to $4.50 (€4.12) per flight to help pay for airport projects.

The administration says that private jets account for 7 per cent of all flights handled by the FAA but less than 1 per cent of taxes that fund the federal trust fund for aviation and airports. The Transportation Department said the proposal would raise $1.1 billion (€1b) over five years.

Taxes will fund air safety and transport infrastructure improvements

The White House earmarked nearly $22 billion (€20.1b) for the FAA, including funds to hire at least 2,000 new air traffic controllers. There are also plans to replace ageing 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 (€56.7b) for roads and bridges and $3.2 billion (€2.9b) for railroad infrastructure, inspections and the Amtrak passenger-rail system.

Business aviation trade group calls the tax hike unfair

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.”