Ultra-wealthy private travelers cost average travelers in taxes

  • Private jet travel has increased in the United States in recent years and accounts for one in six flights.
  • But private travelers only pay 2% of the taxes that fund the Federal Aviation Administration.
  • That’s according to a new report, “High Flyers 2023,” from the Institute for Policy Studies & Patriotic Millionaires.

Private jet travel has jumped in the United States in recent years and now accounts for one in six flights handled by Federal Aviation Administration air traffic controllers. But the highly polluting form of travel enjoyed by the ultra-rich is hugely subsidized by the average American taxpayer.

Private jet travelers only pay 2% of taxes used to fund the FAA, according to a report published on Monday by the Institute for Policy Studies & Patriotic Millionaires.

Commercial travelers must pay a tax on each ticket equivalent to 7.5% of the ticket price. But private travelers only pay a tax on kerosene. And while the price of commercial airline tickets has risen in recent years, jet fuel costs have remained stable, the report said, meaning commercial travelers are paying a growing share of taxes.

“Jet fuel taxes accounted for $186 million of the more than $8 billion in tax revenue that was allocated to AATF in fiscal year 2021, or approximately 2% of the fund’s total tax revenue,” indicates the report. “Meanwhile, more than half of AATF’s tax revenue – $5.32 billion – came from passenger taxes.”

Private jets also use nearly 3,000 of the nation’s smaller airports that are not used by any commercial airline but are funded in part by the FAA, according to the report. Taxpayers therefore subsidize infrastructure that commercial travelers do not use. The funds the FAA sends to these airports, known as general aviation airports, come largely from taxes on commercial travelers.

Chuck Collins, director of the Inequality and Common Good program at the Institute for Policy Studies and co-author of the report, said the program means average Americans not only suffer from the negative environmental effects of private jets, but also subsidies this evil.

“Private aviation is an excess,” Collins told Insider. “It’s a symptom of the increasing concentration of wealth that we’ve been experiencing over the past 40 years and which has sort of accelerated over the past 15 years.”

He added: “It’s not the luxury that has no impact on the rest of us, it has a huge impact.”

Private plane travel is significantly less good for the environment than commercial flights, as private jets carry far fewer people. Private jets emit up to 14 times more climate pollution per passenger than commercial planes, the NGO Transport & Environnement found in 2021.

PEI and Patriotic Millionaires recommended that the government double the federal tax on jet fuel – from $0.219 per gallon to $0.438 per gallon – to discourage short flights, deter theft and fund sustainability efforts.

“If we can’t phase it out, we should tax it high and use that money to build a better public transit system,” Collins said.

The report estimates that Elon Musk – who, with 171 flights, was the most active private traveler in the United States last year – would have paid nearly $97,000 in federal jet fuel taxes on the approximately 221,358 gallons of jet fuel he consumed in 2022 under the proposed higher tax.

The report also recommends implementing a “short hop” surcharge on private flights under 210 miles – roughly the distance between New York’s JFK airport and DC’s DCA airport – and a higher tax on private flights under 100 miles.

But Collins predicts that advocates of raising taxes on private airmen will face strong opposition from powerful and well-funded industry lobbyists.

“In a real democracy that hasn’t been captured by the rich, you know, we could raise the dial and tax it even higher,” Collins said, “but the reality is we’re going to have a fight Damn just to have a slight fuel tax increase.”

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