Private jets pay 0.6% of aviation trust fund taxes on 7% of FAA-handled flights

The Transportation Department's comparison counts flights on one side and tax dollars on the other. Private jets' share of FAA traffic is about 11.7 times their share of trust-fund taxes, 7 divided by 0.6 ^[1], so their payments would have to rise nearly twelvefold to match their share of flights. Strictly, a subsidy is a charge set below the cost of service. The test of the Institute for Policy Studies' "taxpayer subsidy" label ^[3] is what it costs to handle a private-jet flight compared with an airliner. If the agency spends far less per private flight, part of the gap is fair pricing. If it spends about the same, the label holds.

The depreciation figure needs the same care. Under the 2025 law the total deduction is still the jet's cost, and the law moves all of it into the first year of service ^[5]. So the $14.8 million IPS puts on a $40 million jet ^[6] is a first-year saving, or rather a deferral: the buyer gets the use of that money for the years before the old schedule would have delivered the same deductions. IPS said it could not calculate the total federal revenue forgone ^[7]. Buyers do their own sums. Justin Crabbe, chief executive of the jet marketplace Jettly, said he now sees companies buy $75 million jets to "wash a lot of tax obligations off of their plate just by way of that purchase" ^[8]. At the 37% rate IPS used, that jet cuts the first-year federal bill by up to $27.75 million ^[2]. Crabbe said a lot of the people and inquiries he gets come from people who don't even need the aircraft ^[9]. Those buyers put the jets into charter service, where the revenue supports the case for business use ^[10].

There are three ways this can go. Congress could change what private jets pay into the trust fund, though Fortune's report describes no federal bill to do so. States could repeal their sales-tax breaks. Eight have full or near-total exemptions on jet purchases, New York and Massachusetts among them ^[11]. In Massachusetts, a repeal bill that Sen. Michael J. Barrett introduced last year is under review by the Legislature's revenue committee ^[13]. Or nothing moves. The National Business Aviation Association, which represents 10,000 members, argues the breaks support jobs ^[14].

I think the second path is the only one with a bill behind it. It reaches a state sales tax, while the trust-fund gap, the strongest number in the IPS case, is a federal matter. A federal bill tied to that ratio would prove me wrong. The counter-case is that IPS presents the breaks as a set of three ^[17], so a repeal in one state strengthens the argument against the other two. "We all subsidize this tiny segment of the ultra rich and their transportation," Chuck Collins, a coauthor of the report, told Fortune ^[4]. "The bicycle buyers of America are not a powerful lobby, so you have to pay sales tax, and you don't get to depreciate your bicycle in one year," he said ^[16].