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Home Read a ride Aerospace

Proposed Tax on Business Jets Sparks Debate in the U.S

Michael Olabode Williams by Michael Olabode Williams
February 28, 2025
in Aerospace, Premium
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Private jet users in the U.S. may soon face higher taxes, following the introduction of new legislation aimed at increasing fuel levies on business aircraft. Meanwhile, similar surcharges are set to take effect in the U.K. and France this year.

U.S. Senator Edward Markey (D-Massachusetts) has reintroduced the Fueling Alternative Transportation with a Carbon Aviation Tax (FATCAT) Act (S.173), which proposes raising the fuel tax on private jets from 22 cents to $2 per gallon. According to Markey, this adjustment translates to an estimated $200 per tonne of carbon dioxide emissions per aircraft. The bill was initially introduced in 2023 but failed to progress in Congress.

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Markey argues that private jet owners should contribute more to public infrastructure and environmental initiatives, stating, “It is time to make billionaire fat cats pay the absolute bare minimum to fly private jets and prioritize clean public transportation.” However, industry advocates such as the National Business Aviation Association (NBAA) oppose the bill, emphasizing that private aircraft serve essential business functions. They highlight that the business aviation sector contributes approximately $150 billion to the U.S. economy and supports over one million jobs.

While critics often associate private jets with luxury, NBAA President Ed Bolen points out that these aircraft are vital for businesses operating in regions with limited commercial airline access. He noted that out of more than 5,000 public-use airports in the U.S., fewer than 500 have regular airline service, making business aviation a critical lifeline for many communities.

Despite the debate, the proposed tax faces a challenging path forward in Congress, particularly with Republican majorities in both chambers. In contrast, new taxation policies on private aviation in the U.K. and France are set to take effect soon.

Starting March 1 in France, charter and private jet passengers will incur surcharges ranging from $218 to $2,200 per flight, depending on aircraft type and destination. The revenue from this tax will contribute to France’s plan to cut $62 billion in public spending for the 2025 fiscal year. However, industry experts warn that these additional costs could deter investors and impact jobs, with the European Business Aviation Association estimating potential losses of up to $120 billion in foreign investment and 104,000 jobs over five years.

Similarly, the U.K. will implement its Air Passenger Duty (APD) on April 1, charging private jet travelers between £84 ($106) and £673 ($850) per passenger, based on distance and aircraft type. The British government expects the added expense to be passed on to consumers but believes the levy will help generate public funds.

The impact of such luxury taxes on high-end industries has historically been significant. In 2012, Italy’s attempt to impose a yacht tax resulted in substantial financial losses for the maritime sector. Similarly, the U.S. luxury tax of 1991, which applied to expensive boats, aircraft, and cars, led to steep declines in sales and job losses across related industries. Critics argue that history could repeat itself if private jet taxes deter business aviation activity and economic investment.

read more on South Africa opens rail network to private operators in a bid to revive economy

Tags: HeadlinePrivate jet

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