Airlines' Tax Break Threatens S.C. Businesses
July 30, 2009
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  • By Rick Ott


    As the seniors of South Carolina high schools walked through graduation ceremonies in May and June, they became part of a proud tradition of both their community and their school. Regardless of where their lives take them now, the students will forever have fond memories of the school, their teachers and their classmates. It is these schools that define the vast majorities of students’ memories and prepare them for the rest of their lives.

    It is the belief in these students that is the major driving force behind our work at M.B. Kahn Construction. Sixty percent of our projects are building schools for students from kindergarten to 12th grade. The remainder of our work centers on public works projects: building health care, correctional and manufacturing facilities up and down the East Coast. To connect to and transport our over 1,000 employees to the job sites both within South Carolina and our neighbors along the coast, we utilize our most important business tool: the small airplane. We have used aviation as a business tool for 20 years. In fact, I fly over 400 hours per year, totaling 6,000 hours of flying time to date.

    But the U.S. Senate is currently threatening my company’s ability to sustain and develop our business with a radical new tax on small planes, disguised as “user fees.” Pushed by the big airlines and their highly paid lobbyists, this new tax system would subject turbine-powered airplanes – used by small businesses like mine all over the nation – to pay a flat tax, or “user fee.” In addition to this new tax, the fuel tax small planes like mine currently pay will be doubled while the big airlines’ contribution gets completely eliminated.

    Supporters of user fees say we need this radical new system to get corporate jets to “pay their share.” In fact, this plan would force small businesses like mine to shoulder the airlines’ tax obligation while airlines such as Delta and American would reap huge tax breaks. It is these same advocates that state that a user-fee scheme is necessary to pay to upgrade our nation’s air traffic control system. In truth, the funding necessary to pay for these improvements is easily collected from our current system, without major and costly changes to our country’s aviation system.

    A user-fee system like this would have a crippling effect for businesses like mine that are dependent on being able to use general aviation to successfully serve our customers and communities. These small airplanes allow small businesses to connect with new customers and communicate with suppliers and distributors. Not only that, our service is essential to the growth of small communities all over the East Coast. The construction of schools and health care facilities provides safety and security for towns and allows economic growth to continue, benefiting all who live in the area. Without such institutions, the population of towns would shrink, businesses would leave and the states would suffer.

    In addition, general aviation pilots volunteer their time and planes to respond to emergencies throughout the nation. General aviation pilots were involved in the response to Hurricane Katrina and have donated their time to aid in search and rescue efforts, disaster relief and medical emergencies, and these aviation pilots are the only lifeline to rural communities and their response in a time of crisis can be the difference between life and death.

    To accept this new tax break for the airlines is to kill the lifeblood of South Carolina. We cannot allow the CEOs of the big airlines to enjoy a massive tax break at the expense of small businesses all across our state.

    Rick Ott is vice president of M.B. Kahn Construction of Columbia.

    Date: 2007-06-23