Washington Matters


Democrats' Anger Over Jets Has Soft Landing



Remember the furor when auto company executives came to Washington on corporate jets to ask for a handout? That infuriated many lawmakers, but none more than House Financial Services Committee Chairman Barney Frank, who vowed to bar any company with private jets from receiving money from the financial bailout package. Good idea, especially for liberals with a wide populist streak, right? Wrong. And the encouraging thing is that Frank realized his overreaction. Perhaps he remembered a similar -- and disastrous -- attempt to target the toys of the rich and powerful.

The idea of making corporate executives of companies in search of taxpayer help travel like the rest of us has an almost irresistible logic to it. But such moves often have unintended consequences that can hurt a lot of ordinary people. Lawmakers from Kansas and other states with factories for private jets said the measure could put people out of work, and other critics said private jets were often the most efficient way to reach out-of-the-way places. Frank backed down and issued a statement acknowledging that "the private aircraft industry is an important industry in America."

Frank also may have remembered what happened in the early 1990s after Democrats insisted that a deficit reduction package it was negotiating with the first President Bush include a 10% tax on yachts. After all, how much would it hurt to ask the rich to pay a little extra for one of their many luxuries? A lot, it turned out. The appetite for yachts nearly disappeared and the craftsmen and small boatyards that made them started going out of business. (Some estimates put the number of lost jobs at 30,000.) Many Democrats relented and the tax was repealed a couple years later.







You can get valuable updates like Washington Matters from Kiplinger sent directly to your e-mail. Simply enter your e-mail address and click "sign up."

More Sponsored Links


DISCUSS

Permission to post your comment is assumed when you submit it. The name you provide will be used to identify your post, and NOT your e-mail address. We reserve the right to excerpt or edit any posted comments for clarity, appropriateness, civility, and relevance to the topic.
View our full privacy policy


Advertisement

Market Update

Advertisement

Featured Videos From Kiplinger