The Fourth of July is almost upon us. If you listen closely, you can practically hear the voices of the founding fathers echo across the centuries, expressing their opposition to monarchy and hereditary rule. And tax breaks for corporate jets.
OK, maybe not the last of these, but to listen to the president railing at tax breaks for corporate jets last Wednesday, you might suppose there is no greater injustice. So grievous a problem is this tax shelter that Obama mentioned it six separate times in his presser.
“I think it’s only fair,” he said over and over, each time in slightly altered form, “to ask an oil company or a corporate jet owner that has done so well to give up that tax break that no other business enjoys.”
Never mind that the amount of tax that corporate jet owners are excused from paying works out to $3 billion over ten years. This sum is so piddling in the grand scheme of things that—to paraphrase Charles Krauthammer—if the government collected it every year for 5,000 years, they would cover one year of the debt that the Obama administration has run up.
The point the president was trying to make, as he amps up his relentless class warfare arguments, is that all over America children go to bed hungry while greedy fat cats get a tax break on the jets they buy.
So where did this odious tax dodge come from? That’s the part the White House would rather not talk about. And the reason is that the loophole was given new life by the American Recovery and Reinvestment Act of 2009 (aka, the Obama stimulus package). A Wall Street Journal article published shortly after the stimulus was signed into law provides some historical perspective, much of it positive:
The aviation industry, which is cutting jobs as it suffers from declining shipments and canceled orders, hopes the tax break in the economic-stimulus bill just signed by President Barack Obama will persuade more companies to buy planes and snap a slump in general aviation that began last year.
So why is the White House now denying that they signed this shelter into law? And why are they hiding behind the skirts of liberal flame-throwers in the blogosphere like Matthew Yglesias? The answer to the first question is optics. It looks really bad for the president to have to admit to his base that he backed a capitalist scheme benefiting (gulp!) evil corporations. It looks even worse for him to attack a policy that he himself signed into law. At a time when only 39% of Americans approve of Obama’s handling of the economy it makes him look that much more incompetent.
And he is hiding behind the words of those who carry water for him in the media because they identified a convenient technicality in the conservative argument. Investigative reporter Lachlan Markay of the Heritage Foundation, the first to report on the blunt self-contradiction, wrote that the tax break was “created” by the stimulus, when in fact the preference was created in 2002 and merely extended by the stimulus. It’s pure semantic parsing and balderdash. But it’s what this most transparent of all administrations routinely does when it is caught with egg on its face.
They are hoping once again that you won’t notice.
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