A lot of hullaballoo has been made over Georgia’s decision to revoke the special tax break for Delta over its own decision to disassociate itself with the NRA. AP wrote the NRA discount was used by all of 13 people, while Delta said its values weren’t for sale. The effort was spearheaded by Georgia Lieutenant Governor Casey Cagle, who is running for governor and swore conservatives were “fighting back” against corporations who attack conservatives. Cagle then went on Neil Cavuto Saturday to defend the repeal of the fuel tax exemption. He made this striking statement on Georgia’s cronyistic ways..
Delta is part of our family in Georgia. I have had a long, long record of supporting and helping Delta. Back when they went through the bankruptcy, I was there in the legislature to actually do away with this jet fuel to help them financially get by. But corporations need to be focused more at their fiduciary duties to their shareholders…
I took a look at the state’s jet fuel tax, and it’s quite head spinning. There appears to be a 4% sales tax on jet fuel, if I understand this guide correctly, with previous Georgia law allowing a 1% discount to airlines. It also included this bit of cronyism:
(C) The sale or use of jet fuel to or by a qualifying airline at a qualifying airport shall be exempt at all times from the sales or use tax levied and imposed as authorized pursuant to Part 1 of Article 3 of this chapter. As used in this subparagraph, the term “qualifying airport” means any airport in this state that has had more than 750,000 takeoffs and landings during a calendar year, and the term “qualifying airline” shall have the same meaning as set forth in subparagraph (E) of this paragraph.
Give yourself a gold star if you guessed Delta as the “qualifying airport” and Atlanta’s airport at the “qualifying airport.”
The new version of the bill, before it was taken out, would have featured this:
(a)(1) The sale or use of jet fuel that is pumped into an aircraft in this state and the use of jet fuel that is pumped into an aircraft in another state shall be exempt from all sales and use taxes except as provided in subsection (b) of this Code section.
(2) The sale of jet fuel in this state that is not pumped into an aircraft in this state shall be exempt from 1 percent of the 4 percent state sales and use tax and all other sales and use taxes except as provided in subsection (b) of this Code section.
To call this a train wreck is an insult to train wrecks. This tax code is ridiculous, and full of handouts to pretty much every group out there, probably because Georgia has a corporate tax of 6% of federal corporate tax, AND a $5K corporate net worth tax for businesses valued at over $22M. I suppose this is what happens when you’re part of the “Georgia family,” and the state tries to suck up as much money as possible whilst giving handouts wherever possible.
This is what happens when cronyism seeps its way into “the way of doing business” in the Peach State or any state. Delta was able to get the state to carve out a huge exemption for them, while other airlines and businesses suffered. That’s all gone with the passing of the new tax bill, which I’m not against on principle, but am against as reciprocity against Delta’s decision to end its relationship with the NRA (which is what this is). Delta is simply using the “freedom of association” part of the 1st Amendment, and the Georgia government’s decision may violate the 14th Amendment based on Cagle’s statements of “conservatives fighting back.” I do not believe Delta should sue over the bill, I’m just pointing out a potential reason why it could happen.
The entire thing shows the inanity of cronyism, corporate welfare, and what happens when businesses rely on the government to prop up their finances, and vice versa. Governments are giving out far too many handouts to corporations, and need to stop. Look at the entire “competition” for luring Amazon’s services for the new HQ2 or the local and state handouts Toyota got to relocate their North American headquarters to Texas. It’s insane, inane, and not the way a truly free market operates.
But they should also lower taxes on corporations and businesses, and let them keep more of the money they earn. Georgia’s 6% corporate tax rate is stupid, as is the federal government’s now 21% corporate tax rate. Both governments need to lower the corporate further, if not completely eliminate it, along with lowering or eliminating personal income tax levels. It’s not the government’s money, and they need to stop acting like it’s theirs and we peasants are lucky to have a magnanimous government return a pittance in a “tax refund.”
The third thing which needs to happen is a major reduction in government spending on a federal, state, and local level. Georgia’s new budget proposal is $22B, an over 5% increase from last year. The new federal budget increases spending everywhere, with both parties (and the President) having no problem whatsoever with the funding. It’s not going to actually help the economy in the long run because cuts, and large cuts, are needed. But it’s just business as usual with (all) government, and a sorry one at that.