President Joe Biden has put forth a significant proposal to raise fuel taxes for private jets as part of a $109.3 billion budget request for the U.S. Department of Transportation. The administration argues that this move is aimed at achieving fairness compared to airline passengers, who currently pay special taxes on every ticket purchased.
The fate of this proposal in Congress remains uncertain, given the Republican majority in the House. The business aviation industry has expressed opposition to the targeted fuel-tax increase, emphasizing the role of private jets in supporting companies and job creation.
The budget request includes nearly $22 billion allocated for the Federal Aviation Administration (FAA), with plans to hire at least 2,000 new air traffic controllers and upgrade aging FAA facilities. Both Democrats and Republicans in Congress have shown support for increased FAA staffing to enhance air traffic control and safety measures.
Furthermore, the budget sets aside $62 billion for road and bridge infrastructure and $3.2 billion for railroad infrastructure, inspections, and the Amtrak passenger-rail system.
Under the proposed plan, the tax on fuel used by private jets would gradually rise from approximately 22 cents per gallon to $1.06 per gallon over a five-year period. The Transportation Department asserts that this increase is necessary to ensure stable funding for the FAA's management of the national airspace, primarily funded by airline passengers.
Currently, airline passengers pay a 7.5% excise tax on tickets and an additional levy of up to $4.50 per flight to support airport projects. The administration highlights that while private jets account for 7% of all flights handled by the FAA, they contribute less than 1% of the taxes that finance the federal trust fund for aviation and airports.
In his recent State of the Union address, President Biden hinted at this proposal following a call to raise the minimum income tax on corporations. The National Business Aviation Association criticized the plan, stating that the industry plays a vital role in the American economy and transportation system, supporting jobs, connecting communities, and providing essential services during crises.
