No, the Senate tax bill does not offer a tax break for private jetsThe newly passed Senate version of the Republican tax bill contains a provision addressing the way private jets...
| | Democracy Dies in Darkness | | | | | | The truth behind the rhetoric | | | | No, the Senate tax bill does not offer a tax break for private jets The newly passed Senate version of the Republican tax bill contains a provision addressing the way private jets are taxed. Taking to Twitter, some Democratic leaders characterized the provision as a tax break. Democratic National Committee Chairman Tom Perez tweeted,"#GOPTaxScam philosophy: Let's end tax benefits for colleges and students and give a tax break to private jet owners." Sens. Kamala D. Harris (D-Calif.) and Jeff Merkley (D-Ore.) piled on, tweeting,"Retweet if you would *not* benefit from a private jet tax break," and "A private jet tax break paid for by slashing health care. You can't make this stuff up," respectively. If you've ever purchased a plane ticket, you've probably noticed that a portion of the ticket price pays for "taxes and fees." The federal excise tax is one of those taxes. When a person flies on his or her own private jet, however, the excise tax does not apply. But many owners of private jets lend their aircraft to management companies that use them to charter flights for others. Does the excise tax apply then? It's murky. The Internal Revenue Service and the private jet industry have been in a decades-long dispute on the matter and so, the tax has never been successfully imposed. Plus, for what it's worth, adding the excise tax to the private jet industry would garner less than $50,000 a year, which is literally a rounding error in the federal budget. The characterization of the excise tax clause as a tax break is misguided; the companies can't receive a break on taxes that were never collected. Still, these tweets are not alike. Harris earns Three Pinocchios, but Merkely and Perez each earn Four. | | Enjoy this newsletter? Forward it to someone else who'd like it! If this e-mail was forwarded to you, sign up here for the weekly newsletter. Hear something fact-checkable? Send it here, we'll check it out. | | The GOP's $10,000 cap on property tax deductions and one congressional district A key feature of the House and Senate tax bills is ending the deduction for local and state taxes, or the SALT deduction. New Jersey is one of six states that claim more than half of the value of all SALT deductions nationwide. And so Rep. Tom MacArthur, who represents the state's Third Congressional District, proposed an alternative: "According to data direct from the IRS, allowing property tax deductions up to $10,000 — which I fought for and won — will cover nearly every taxpayer in the Third Congressional District." MacArthur said the $10,000 cap would cover "nearly every taxpayer" in his district. It turns out that means 93 percent, which leaves out 24,000. So, from the start, 16 percent of the people who itemize are not covered, according to MacArthur's own math. But, he highlights the impact of the property tax deduction in isolation — without considering the interaction with other aspects of the tax bill, such as eliminating dependent and personal exemptions. MacArthur appears to have worked diligently to tilt the bill so that it would benefit his constituents, but he oversells his achievement. He earns Two Pinocchios. | | | Scroll down for this week's Pinocchio roundup. –Meg Kelly | | | | | | | | | | | | | |
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