Struggling Ga. taxpayers subsidize jetsetters’ lifestyle

Gulfstream, the Savannah-based manufacturer of high-end business jets, just announced the launch of two new lines of corporate luxury jets: The G500, with a selling price of $43 million, and the G600, with a selling price of $54 million.

Within Gulfstream’s product line, however, the two new planes are the rough equivalent of the cars that you find available at Avis or Hertz. As they roll off the assembly line, many of them will be snatched up by firms that lease private jets or sell time-shares to corporations or wealthy individuals, the Wall Street Journal reports.

The real top-of-the-line model at Gulfstream is the highly coveted G650, with a sales price of $64.5 million and a waiting list of almost four years for delivery. It has a maximum range of more than 8,000 miles, reaching air speeds twice that of commercial airliners, and boasts luxury touches that make it a must-have status item among billionaires.

And when you’ve got billionaires lining up, willing to wait years to get their hands on your product, business is very good. Stock of Gulfstream’s parent company, General Dynamics, is up 33.7 percent in the past year, even after the recent selloff on Wall Street, and second-quarter profits were $646 million, with Gulfstream generating a huge part of that number.

In many ways, that’s a great success story. However, I think it’s worth noting that the people of Georgia are making their own contribution to the General Dynamics bottom line, in addition to what they contribute in terms of their own labor and education. Earlier this year, the Georgia Legislature approved a bill that gives Gulfstream a permanent special-interest tax break worth an estimated $29 million to $40 million a year.

Under House Bill 933, signed into law by Gov. Nathan Deal in April**, Gulfstream gets a permanent sales tax exemption on all parts used to maintain and repair the high-end corporate jets that it sells. Your local auto mechanic pays a sales tax on items used to repair your car; which means that he in turn charges it to you. But Gulfstream and its deep-pocketed customers are exempt.

corpprofIt’s a remarkable situation. Corporate after-tax profits are at or near record highs, which is why Gulfstream’s business is so good. The wealthiest 1 percent have collected almost all of the income gain generated since the Great Recession. CEO compensation last year was up 21.7 percent since 2010. It is up 937 percent since 1978.

Meanwhile, median household incomes in Georgia continue to drop. More than 17 percent of Georgians live in poverty, as do 27 percent of our children — that’s more than one in four. In fiscal 2013, we had 42,000 more students in Georgia public schools than we did in 2009, being taught by 9,000 fewer teachers. We aren’t allowing our working poor to get access to Medicaid coverage that is available in other states because we’re told that Georgia can’t afford it.

Yet even with all that, Georgia’s struggling taxpayers are being forced to subsidize a extremely profitable manufacturer of high-end corporate jets and its billionaire customers to the tune of up to $40 million a year.

In what kind of world does this kind of income redistribution make sense? In what kind of world can that be said to be fair?

The kind of world in which we live, apparently.

———–

** A year earlier, in 2013, Deal had signed a temporary extension of the Gulfstream sales-tax exemption on the same day that he vetoed a less expensive sales tax exemption for medical clinics, health centers, food banks and other charities.

Reader Comments 0

375 comments
Buttercup23
Buttercup23

The corporate welfare queens are living high off the hog, pulling in profits that would make a herd of elephants choke and yet they need taxpayer monies.  What's wrong with that picture????  Republicans like Deal, looking out for their corporate sugar daddies, is not looking out for the taxpayers, the ones who are paying the bills.

Brosephus
Brosephus

Ted Cruz/David Perdue sheetz!!!

gotalife
gotalife

The first step in judging our President's legacy is what he hands the next President.


It will not be two losing wars and a collapsed economy.


That is a safe bet.

Yes_Jesus_Can
Yes_Jesus_Can

@gotalife 

An unhealthy economy and structural issues with employment, ebola, an enlivened Middle East, broken promises, an obligatory healthcare system with arbitrary rules. 

consumedconsumer
consumedconsumer

@Yes_Jesus_Can @gotalife


unhealthy economy and structural issues with employment - was here before he got here


ebola - there's a lot of other diseases too. he at fault for all of them?


an enlivened Middle East - LMMFAO. y'all broke it but didn't fix it and you're cryin' to him? 


broken promises -  hahahahahahahahahahahahahahaha! 


an obligatory healthcare system with arbitrary rules - you had your chance and decided to let O implement the conservative plan. oh well, live with it like we all have to 

TBS
TBS

Jm

Just be honest and say you want lower taxes and your concern isn't really where the burden is shifted or not.  I could at least respect the honesty.


All the hocus pocus about sales tax this or that is just a veil but it is very transparent.  You are smarter than that or at least I  think you are smarter than that. 


If your income and capital gains taxes were lowered today chances are that the talk of tax reform, sales tax blah blah would die down in quick fashion. 


The ruse is to get lower taxes.  It is just how you are going to package and market it is the real issue.  Your choice to have that opinion and work for whatever system you like but try a little honesty for a change.

Yes_Jesus_Can
Yes_Jesus_Can

@TBS 


If your income and capital gains taxes were lowered today chances are that the talk of tax reform, sales tax blah blah would die down in quick fashion.


----------------------------------------------------

Huh?  You saying that people only care about themselves? 

That's democrat philosophy maybe.  We're here because it's about what's best for the country. 

consumedconsumer
consumedconsumer

@Yes_Jesus_Can @TBS people only care about themselves is the guiding principle of libertarianism and much of conservatism. rational maximizers. free people. etc., etc., etc.

LeninTime
LeninTime

@Yes_Jesus_Can @TBS 

Giving oligarchs and 1% parasites dictatorial powers over the economy and the political life of the country is "good for the country"? 

What kind of bizarro world...

Soothsayer2
Soothsayer2

Congratulations to President Barack Obama for reducing our annual deficit from the $1.2Trillions he inherited from George W. Bush to $492Billions in 2013!

No small accomplishment with a totally obstructionist Legislature.

gotalife
gotalife

@Soothsayer2 Thank you for posting that great news. The story is complete. Our President did not fail like bush.

Soothsayer2
Soothsayer2

 Legislature extends Gulfstream tax break

The General Assembly gave final passage Thursday to legislation extending indefinitely a sales tax exemption on aircraft repairs or maintenance performed at Gulfstream Aerospace Corp.’s service center in Brunswick.

When the legislation first came before the House early this month, Majority LeaderLarry O’Neal, R-Bonaire, pulled out numbers showing the additional jobs the sales tax exemption would help Gulfstream create would generate about $13 million per year more in income taxes than it would cost the state in sales taxes.

The Gulfstream bill does have one caveat. To ensure the business the Brunswick center generates is from out of state, the tax exemption would be limited to repairs or maintenance of aircraft that are not registered in Georgia.

http://www.bizjournals.com/atlanta/blog/capitol_vision/2014/03/legislature-extends-gulfstream-tax-break.html

::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::

Maybe not as bad as it sounds.

Soothsayer2
Soothsayer2

Give up $40Millions (top end of estimate) in sales taxes to generate $53Millions ($40Millions + $13Millions in additional income taxes) in income taxes (not to mention the jobs). Sounds like a pretty good deal to me.

Yes_Jesus_Can
Yes_Jesus_Can

@ByteMe @Soothsayer2 

Allowing Gulfstream to maintain its customers own planes at reduced cost will not prevent Bombardier from doing the same. 

However, picking Solyndra to throw money at flushes funds completely away from companies that would have done something real, like Gulfstream is doing. 

Doggone_GA
Doggone_GA

@Soothsayer2 

and maybe it's worse then it sounds.  So now we get to pay for the luxuries of those who don't even live in this state and contribute in other ways.

Yes_Jesus_Can
Yes_Jesus_Can

@Soothsayer2 

THANKS SOOTH! 

Brilliant.  Glad you followed up on that. 

We all should be suspicious of the half-information editing done so often for political gain. 

Jay,

You can rest easy tonight.  Your story is now complete. 

barkingfrog
barkingfrog

@Soothsayer2


Sounds like the wealthy in Georgia will have to pay the tax. Maybe they can fly to

another state that gives a tax break to out of state plane owners.

ByteMe
ByteMe

@Soothsayer2 the bottom line is that the cons often accuse "liberals" of picking "winners" and "losers"... and yet, they're happy to do it as long as it lines the pockets of the wealthy.

gotalife
gotalife

$10.10 Minimum Wage Would Save The U.S. Government $7.6 Billion A Year 


Yup give America a raise is a no brainer.

ByteMe
ByteMe

@Yes_Jesus_Can If they don't have to pay the $15K per year health insurance cost for everyone AND all health insurance claims go through medicare instead of our current fractured system... YES.  The numbers support it.

ByteMe
ByteMe

@gotalife that's peanuts.  Let's do one better: universal health care for all paid for by a payroll tax.  How much would that save businesses each year in costs transferred to the government like it is in other countries?

Yes_Jesus_Can
Yes_Jesus_Can

@gotalife 

Let's all give this great idea the praise it deserves.

PPPPFFFFfTTTTTTTTTTTTT!

Bw hahahahahahhahahaahaa

Yes_Jesus_Can
Yes_Jesus_Can

@ByteMe @gotalife 

Unbelievable.  A payroll tax would SAVE businesses money?  

That's like saying a parking meter is going to save me money. 

Yes_Jesus_Can
Yes_Jesus_Can

@ByteMe @Yes_Jesus_Can 

Baloney! 

You're just shifting money around, and you're not proposing any responsibility on the consumer, which is what is required--knowledge is required for healthcare reform.  Bamster is bending the expense curve UP, not down as he promised. 

Brosephus
Brosephus

@Yes_Jesus_Can 

"That's like saying a parking meter is going to save me money."

Last time I checked, paying $.25 at a parking meter was significantly less than paying $100 to have a boot removed from a car.

Then again, I'm a Black man living on the democrat plantation, right?  What do I know?

Besides, you never actually defined what the democrat plantation is.  Care to answer that one now?

gotalife
gotalife

Lets go ahead and label the rw mentally disabled and ignore them.

Yes_Jesus_Can
Yes_Jesus_Can

@gotalife 

Yeah, yea yea you already think that. 

Next you'll lock us up and call it illegal for having beliefs that disagree with yours. 

gotalife
gotalife

Good ole rw lying media helps them lick their boots covered with ebola.

JohnnyReb
JohnnyReb

This was a duplication of which I have no idea how it occurred.

gotalife
gotalife

Did aq, isis or ebola get you cons yet?

JohnnyReb
JohnnyReb

Jay's article does not paint an understandable picture.


People who sell things pay sales tax on items consumed or purchased for use, but not on items resold.  Tax is collected on resold items at the time of transaction.


The $40M amount is not enough to be a sale of jets tax free.  It looks more like an exemption to Gulfstream of sales tax against items purchased for use.

If that be the case, then the state is not collecting sales tax from Gulfstream which is entirely different from not collecting tax on the sale of a jet.

Regardless, a subsidy it is not.  But that sounds good to the Liberal base.

LeninTime
LeninTime

@JohnnyReb 

Jay's article does not paint an understandable picture.

***

Some are slow to understand, yes.

LpV
LpV

Jay, do you always have to blame Republicans for everything that is not good?

FIGMO2
FIGMO2

Whodathunkit?

Americans who own private jets need to pay more in taxes, President Obama argues. So it seems odd that foreign executives riding Gulfstream jets from Shanghai to Mumbai get U.S. subsidies from Obama's favorite export agency.

The Export-Import Bank of the United States recently announced a milestone: Under Obama, the agency has subsidized the sale of $1 billion in private jet sales to overseas customers.

http://www.washingtonexaminer.com/timothy-p.-carney-obama-subsidizes-private-jets-for-high-flyers-abroad/article/2546643

schnirt


_GodlessHeathen_
_GodlessHeathen_

@gotalife Marijuana delivery jobs.  High paying skilled labor that will be.


Dude, you want me to get a pizza on the way?