Southern California Reps. Steve Knight (R-Palmdale) and Mimi Walters (R-Irvine) staked their political future on a Republican tax bill that is failing to live up to their hype. But the bill they championed has been a boon to one industry: It has freed companies up to invest in luxury private air travel.
California Republicans, who provided the crucial votes for the bill to pass, have used deception to try to sell their trillion-dollar giveaway. While CEOs are upgrading luxury jets, Walters bragged that a secretary got an additional $1.50 per week raise.
Even before passage of the bill, CEOs were quite clearly saying they would not invest their windfall in their own workers; they were planning to use it for themselves. And according to CNBC, that includes ushering in a “golden age” for private jet sales.
On Tuesday, Steve Varsano, CEO of The Jet Business, explained on CNBC just how the Trump tax scam helps the private jet industry. The business has been steadily increasing since the 2008 financial crisis, he said, but it has “skyrocketed” recently.
“The decrease in corporate taxes has given the companies a lot more free cash flow to invest in” things like private jets, he said, and new depreciation rules give companies “a lot more cash to invest in assets.”
Varsano went on to say the overwhelming majority of sales are of used jets. Indeed, industry experts only project new sales to increase by 58 planes in 2018, from 660 sales in 2017 to 718 this year. According to Varsano, used planes account for about 2,500 sales per year.
That means a lot of expensive toys for billionaires but few new jobs for manufacturing them. And lots of money not being spent on jobs and wages.
Luxury jets probably won’t make it into a cute infographic that Knight or Walters will share on social media, because they would rather you ignore the fact that most of the benefits in the tax bill go to the wealthy. Average Californians will see a multi-billion dollar tax hike, while corporations are so flush with extra cash that private jets have become a booming business.
It’s no surprise that the Trump-Knight-Walters tax bill would boost luxury air travel, since Trump’s Cabinet members have made U.S. taxpayers into unwitting customers, racking up millions in private flights.
Meanwhile, Republicans are trying to claim their tax bill benefits average American workers because of one-time bonuses, ignoring layoffs in their own backyards.
No wonder the bill remains unpopular among voters even as the wealthiest Americans and corporations celebrate the “free cash flow” to buy private jets.
Dan Desai Martin contributed to this report.