Comments on: Governor Deval Patrick’s war on the environment

By: philg

philg — Sun, 30 Nov 2008 22:55:37 +0000

JohnS: I’m not sure that towns are authorized to tax aircraft. The Massachusetts Aeronautics Commission collects an annual registration fee. The state and the feds pay for nearly all of the cost of building and maintaining municipal airports, so I think they want to keep taxing authority to themselves. The state and the airport can collect fuel taxes and fees (often more than $2 per gallon). The feds collect fuel taxes and a 7.5% excise tax on charter revenue. These guys wouldn’t want the town government of Teterboro, NJ coming to the party and trying to collect $20 million in tax from all of the Gulfstreams at KTEB because that might interefere with their own attempts to bleed the Gulfstream operators.

By: JohnS

JohnS — Sun, 30 Nov 2008 18:22:16 +0000

I was looking for towns in MA that charge an excise tax on planes just as they do on cars and boats when I found your blog. I live in a town with a small muni airport which is subsidised by the tax payers and has become a club for some wealthy hobbyists in town. It has also become a nuisance because of the addition of jet aircraft which has moblized a group of tax payers and neighbors. When I had a boat I paid dearly for the pleasure of owning it and I pay dearly for my property which I see as over valued by the town. But you are right about planes being able to be parked out of harms way. Just as those who say “tax the rich” they will find that doesn’t work because the rich can hire people to find ways to avoid taxes. Look at Ted Kennedy, his mother died as a resident of Florida to avoid MA taxes. So even though information like this is available to the people who continue to elect him it doesn’t matter. Why do we bother to try to get a fair shake from people who can afford $10 mil for their own jet but wont pay the relativley small charges for ownership? It just doesn’t make sense when they have the rest of us to support them through the FAA on down to our little airport. So, as you point out when taxes get too high business and people leave. Just as I go to the local hardware store and pay a higher price, rather than the home center a little further away, to keep him handy, the rich ought not kill the golden goose.

By: philg

philg — Thu, 22 May 2008 05:16:06 +0000

Paul: These arguments can certainly be applied to any business that moves at 450 knots or faster. A $50 million Gulfstream and its crew can be moved over the border much more easily than the average business with $50 million in assets. A guy who needs work done on his car would have to drive an extra hour to get it done in New Hampshire and avoid the sales tax on a $300 part. A guy who needs work done on his airplane would have to fly only an extra 10 minutes and would avoid sales tax on a $30,000 part. Aviation is different because … airplanes fly.

By: PaulS

PaulS — Thu, 22 May 2008 01:02:33 +0000

Philip, these arguments can easily be applied to most businesses in Massachusetts for the other taxes, fees and regulations imposed by this state. This state has had much success in spite of itself, but its regressive tax system coupled with the anti-business attitude of the ruling elite is chipping away at that success. I think our failure to gain back the jobs lost during the last recession are directly attributable to the business hostile nature of this state.

By: philg

philg — Wed, 21 May 2008 21:31:46 +0000

Tom: The Federales already collect tax on aviation fuel and the latest FAA funding bills in Congress raise the tax by something between 65 and 220 percent. The Feds also collect 7.5% excise tax on every charter operation. These taxes discourage business activity to some extent but they encourage conservation of fuel and the purchase of new fuel-efficient airplanes (the majority of which are manufactured here in the U.S.).

It is unclear why a state should be collecting a tax on aviation. The Feds pay for nearly all airport construction and expansion. The Feds pay for air traffic control. The Feds pay to maintain safety standards via inspections.

A sales tax on new airplanes, even at the Federal level, is probably a bad idea. It will encourage businesses to continue operating older airplanes, which waste fuel and which are not as safe. A sales tax also discourages purchases from one of the few industries that still manufactures here in the U.S. A fuel tax, by contrast, discourages purchases from countries such as Venezuela and Saudi Arabia that are thorns in our side.

States collect property tax on hangars. States collect income tax from pilots, mechanics, and dispatchers. States collect sales tax from those folks when they buy stuff in local stores. States collect property tax on the houses where these employees live. It is not clear to me why they need also to collect tax on the purchase of new airplanes that are going to be used almost exclusively in interstate commerce and whose operation is already taxed by the Federal government.

By: Tom Green

Tom Green — Wed, 21 May 2008 19:46:59 +0000

Philip: you have said in the past (on this blog) that you aren’t necessarily opposed to taxes on planes and aviation-related stuff, just that these Massachusetts taxation systems are idiotic for the state. In theory (and I know this is completely unrealistic), would you be in favor of some kind of federal taxation system that would stop a “race to the bottom” for states and their taxes, by making sure taxes are equal–or nearly equal–among the states?