President Obama flip-flops on tax breaks for corporate jets

by NW Spotlight

In his press conference last week, President Obama made numerous references to corporate-jet owners, including this challenge to Republicans “You go talk to your constituents…and ask them, are they willing to compromise their kids’ safety so that some corporate-jet owner continues to get a tax break?”

The problem is, it’s President Obama’s corporate-jet owner tax break. President Obama gave it to corporations in his 2009 stimulus package and again when he signed the 2010 Small Business Lending Fund Act.

But based on his press conference last Wednesday, it sounds like President Obama no longer supports his tax breaks for corporate-jet owners. In fact, it appears that now he’s trying to hide the fact that he gave those tax breaks to corporations, and he’s trying to blame his actions on the Republicans. Unfortunately for President Obama, it wasn’t Republicans. It was Democrats who controlled the US Senate and the US House and the White House when President Obama gave those tax breaks to corporate-jet owners – twice.

Early into his re-election campaign, the President who won election on a platform of blame, may be running into difficulties now that he has a record to contend with.

 

Further reading:

Obama for Corporate Jet Tax Break Before He Was Against It

Obama’s Declaration of Dependence

Obama takes populist turn with attacks on tax breaks for corporate jet owners

 

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Posted by at 05:00 | Posted in President Obama, Taxes | 36 Comments |Email This Post Email This Post |Print This Post Print This Post
  • HoboJoe

    Flip, flop
    Deal drop
    What a sop
    Get me a mop
    to clean this mess
    Under duress.
    Vote Vote Vote,
    it’s our only hope
    To rid us now of this disaster
    A guy at the top dumber than alabaster.

  • Reper

    There may be a difference between stimulus funds to provide money for middle class jobs, and tax breaks which benefit just the CEOs or owners.

    • Rupert in Springfield

      Well, except for the fact that those corporate jets tend to be built by middle class people and serviced by middle class people.

      Remember the luxury tax on yachts something like 20 years ago? Remember all the bozo’s who railed against rich guys buying boats? Yep, that worked real well until those same bozo’s realized some of them made those boats. Their jobs were now gone when taxes were jacked on them. Turned whole towns into unemployment zones overnight before they repealed the tax soon after passage.

      Oh, and the rich guys who bought the boats? They weren’t really affected. They simply bought the boat elsewhere. John Kerry did this exact thing a while back when he avoided his states luxury tax by buying his yacht outside of MA.

    • HoboJoe

      But there is not.
      The stimulus was a joke.
      200,000 + per job???
      Sad, sick joke.
      It did not work at all.

  • valley person

    So if it was Obama who created the tax break in the first place, and Democrats who voted for it while every Republican voted against, then why are Republicans now digging in their heels over it? Why not give Obama what he wants on this one? 

    • HoboJoe

      Because they figured out it was the one thing Obama has done right.

  • 3H

    “it appears that now he’s trying to hide the fact that he gave those tax breaks to corporations, and he’s trying to blame his actions on the Republicans. “

    Nothing in what he said is blaming the Republicans for past tax breaks.  He is blaming Republicans for their refusal to come to the table and to talk not just about what can be cut from the budget, but to include tax hikes and the closing of tax breaks in those talks.  That is the real issue.  Why do Republicans believe the discussion should only be about budget cuts and no discussion of either tax hikes or the ending of some tax breaks?

    • Marc

      Because tax hikes take money from the productive in society and give the money to the government to hand out to the unproductive, and people they want to buy votes from. It is not only immoral, it is ineffective.

      “Revenue” is raised or lost exponentially. The government can spend money to try to create jobs, and can do so temporarily at great expense (creating Federal jobs, for example). By contrast, when the private sector has that money, it creates lasting revenue streams by creating new companies, innovating, hiring people (who each pay income taxes and buy stuff from other people who pay income taxes).

      It works every time it is tried.

      Look at it this way…
      Government can hire an employee. Lets say an important function, like a cop or a teacher.
      That person is paid, say, $75,000 (in salary and benefits, and other costs). This is money taken from someone who made the money in the private sector, or by borrowing.
      The government takes the income taxes from this person, and thus gets a little of their money back.

      By contrast, a private sector job is one where the government did not pay for the job. Therefore, the revenue created is 100% “profit” to the government.

      Which is more likely to snowball into economic prosperity, and whichone is unsustainable?

      • 3H

        But it doesn’t work when there is a recession.  When business owners are afraid of taking a chance, and bank the money instead of expanding their business.   That is when it is time to “prime the pump”.  

        When you pay unemployment benefits, that money immediately gets spent on goods and services.  When you give poor mothers TANF and WIC, that money is immediately spent.  

        These are not government employees, but people in real need.   

        Government grew for a reason: capitalist systems cannot, and have not, regulated themselves.   Think of all the things we now ask the government to do – police water and air standards, make sure that our food supply and products meet a minimal standard of safety and reliability.  This all came about because business did not, would not, police themselves.   

        Want to shrink government?  Get rid of multi-national and national corporations who can absorb the cost of bad PR, open shell companies to peddle the same products under new names, can dominate and directly influence markets  at their whim and deny real choice to consumers.  The only way market accountability really can work is when the business actors are known and part of a smaller community.  Otherwise, unless their crimes are especially egregious, they simple continue on a business as usual model.  

        • Chrismcm66

          Using your Keynesian logic, the trillions spent on Iraq and Afghanistan should have stimulated the economy to no end.

          It did not.

          • 3H

            Because evidently either it’s not enough, or spent in the wrong way.  Because WWII certainly did work.

  • Reper

    What is on the table now and was not earlier is tax reform.   There is enough to be done that both sides could reach a big deal.

    • valley person

      Not if one side refuses to make a deal. And that is the message they are constantly sending. They would rather risk blowing up the entire economy than eliminating a few tax breaks. 

      • Marc

        Incredibly naive.

        Add up the total amount of all the taxes Obama wants to raise to appear to want a deal.
        Even accept his numbers.

        Then look at how big the hole is.

        You will see that it is like saying we could fill the Grand Canyon if 1,000 corporate jet owners threw their super size slurpees in it. It is a lie. The only way to stop this out of control debt is to stop spending so damn much money.

        • valley person

          You are correct. The amount he is asking for is far far smaller than the hole. As is the amount Republicans are trying to cut. We can’t spend over 21% of GDP, which is what we have done since Reagan, and tax at 15% of GDP, which is what our current tax rates are, and expect to have a balanced budget.

          Last time we were in this pickle Congress agreed on caps to spending growth, and they agreed to raise taxes, and a few years later the budget came into balance. It will take the same combination to work again. Its simple math, not higher math. Democrats are willing to cap, but Republicans are unwilling to tax.

           “Because tax hikes take money from the productive in society and give the
          money to the government to hand out to the unproductive, and people
          they want to buy votes from. It is not only immoral, it is ineffective.”

          This is ridiculous. Government taxes people and returns services. Services are a productive part of the economy. When an old person gets an SSI check they don’t burn it to keep warm, they spend it on private good and services, so the money recirculates. When  teacher teaches, kids get educated and enter society as productive adults, doctors, lawyers, engineers, construction workers. When a fire department buys a new truck it lowers your insurance rates.   

          “”Revenue” is raised or lost exponentially. The government can spend
          money to try to create jobs, and can do so temporarily at great expense
          (creating Federal jobs, for example). By contrast, when the private
          sector has that money, it creates lasting revenue streams by creating
          new companies, innovating, hiring people (who each pay income taxes and
          buy stuff from other people who pay income taxes).”

          Most government jobs are long term, and most government spending sustains long term private sector employment. Temporary boosts in government spending are just that…temporary. They have short term goals, which might be boosting employment until the private sector recovers, or building something of value, like the dams the generate the electricity your computer is probably relying on.

          As for the private sector, it sometimes invests well, but often does not. Surely you have heard of the tulip craze, Beanie Babies, the Housing Bubble, the S&L meltdown, Enron, and Bernie Madoff.

          “By contrast, a private sector job is one where the government did not
          pay for the job. Therefore, the revenue created is 100% “profit” to the
          government.”

          Only if you don’t think taxpayer investment has no value. Private sector companies use public roads and public ports to move products. They have employees educated mostly in public schols. Their security is mostly provided by the govenrment. Their fires are doused by the government. Their employees are relatively healthy because the air and water are clean due to government regulations and inspectors.

          Modern economies are mutually supportive public and private ventures. Countries like Denmark manage a 60% average tax rate yet are quite well off. How is this possible? Because government is a valued service provider.

  • Rupert in Springfield

    Look, lets face it, Obama had a Palin moment went he went on and one about his own tax break being bad. It’s laughable and if he were anyone but Obama this would be called a particularly stupid mistake. An off the cuff remark is one thing, but in a prepared teleprompted speech its entirely another. The guy is just flailing, he has no idea what to do. I think deep down most know this.

    • 3H

      I think what he was arguing was — at the time it made sense, and now it doesn’t.  Unless you don’t think it’s OK to change your mind?  

    • valley dude

      A “Palin moment?”  What does that mean exactly? Aren’t you the one who says we liberals are disrespectful of Palin?

      What is the “mistake” here? That he once supported a tax break he no longer supports? Why is this a mistake? Given changing circumstances, shouldn’t one change one’s policies in response?

    • just doing the math

      Actually, it is sort of comical you bring up Palin. Come on, she is running around
      the country, undermining other Republicans as they enter the Presidential race, while at the same time making money marketing her family.

      So, Obama went on about his own tax break. I don’t hear Boehner or Mitch offering to take some reduction in salary in the form of a tax increase. Or a
      reduction in their vast array of benefits. Apparently, both do not get the concept of
      “shared sacrifice.” 

      If people can afford to buy a yacht or a jet, is it a lot to ask they forgo a tax break on those purchases? And if people can afford those types of purchases, they can certainly easily adjust to a tax increase. Far more easily than people on social programs adjusting to the never ending take away and cuts.

  • Rupert in Springfield

    Really what it comes down to is this – I can think of plenty of times where Republicans have compromised on taxes. Two that come to mind are TEFRA in 1986 where Reagan agreed to some tax hikes in exchange for spending cuts from the Democrats that never came. The man went to his grave asking “did I get my two dollars yet?” in reference to Democrats pledge to cut spending $2 for every $1 Reagan agreed to raise taxes. Then we had Bush 1, read my lips, he went back on that one and it cost him the election.

    So plenty of times where Republicans have agreed to tax increases come to mind. I cannot think of a single time Democrats have agreed to real cuts in government in exchange for a tax increase. I’m talking about real cuts, not cutting the rate of increase or layoffs through attrition.

    Can anyone think of a time where Democrats said “ok, we will eliminate Department X in exchange for tax increase Y”? I sure doubt it.

    I would go dollar for dollar, that would be my compromise. Whatever you want to raise in taxes, I want to see those cuts in either services, or payroll, cut right then and there from the Federal budget. If you cut payroll, I would want to see the names of those employees being let go. If you cut services, I want to see the exact amount the goody checks are being reduced by. None of this employment cuts through attrition, decreases in the rate of growth nonsense. Either lay people off or let’s see how much you are going to cut grannies check by.

    Republicans need to take the offensive on this one. Make the Democrats produce the list of services or the names of employees or departments they are going to ax in exchange for their class warfare tax increase nonsense.

    It’s time to call the Democrats bluff. They are convinced these services are beloved by the public and essential to life as we know it. Fine, if they really believe that then they should stand back, let the Republicans cut, and get swept back into power in congress next year.

    That’s not what they are doing though is it? They know the public is fed up with out of control spending. They know Democrats exist to raise taxes and spend money. What Democrats are betting on is that they can get Republicans to capitulate on taxes and thus sour the base and take congress that way. It’s a cynical game, and if the Republicans fall for it, they deserve everything they get.

    • valley dude

      Reagan increased taxes multiple times, not just once. And he did so because he recognized that voodoo economics was just that. Cutting taxes would not increase more revenues than it cost. 

      As for Bush 1, he lost because Republicans abandoned him over his broken promise. Not because Democrats went back on anything.

      And on what planet is two times “plenty?”

      Where was the proposal from Republicans to eliminate department x for tax increase y? If there was no proposal, why would you expect them to have agreed to it?

      Dollar for dollar is a deal the Democrats would gladly take. They have offered 2 dollars in cuts for every dollar raised. Reppubl;icans are holding out for $3 in cuts with zero in taxes.

      Names of employees being let go? That should be in an agreement? Your proposal would have Congress micro managing the government work force, which is unconstitutional, and you of all people should know this. Congress is not the administrative arm of government.

      But if you want the Republicans names on the checks that are canceled to grannie, I can totally support that one.

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