State of Alaska DOT Wants to Tax Aircraft Owners/Operators

Discussion in 'Hangar Talk' started by AKBill, Nov 12, 2017.

  1. jsstevens

    jsstevens En-Route

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    That's actually why I liked the video approach with the pennies. Anything over $100,000,000 and it's just "a big number, roughly equal to all the other big numbers." But it's not. People don't intuitively realize that a billion is one thousand times a million. And a trillion is one thousand times a billion or one million times a million.
     
    Last edited: Nov 17, 2017
  2. Clark1961

    Clark1961 Ejection Handle Pulled

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    There are three kinds of people in the world, those who understand math and those who don’t.
     
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  3. denverpilot

    denverpilot Taxi to Parking

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    Usually the way to get people’s attention on debt is to show it in number of years at their salary they have to work to pay it off, but it doesn’t really kick in until they’ve done something that disciplined in their own budget.

    Even then, there’s a big number problem there, too. Note over in the “afford an aircraft” thread that some people think five years of savings is too long.

    But they’ll happily tack on 4-8% PER YEAR (it’s the compounding that gets them) to borrow that five year’s in savings and make it $40,000 more on every $100,000 borrowed thinking that’s a better deal and justify it by saying they don’t have five years to save.

    Whether it’s worth spending “an additional half year of work” to pay for the loan is up to them, but it’s still another half a year of work to pay it off.

    People rarely look at it in “total years working” to cover the cost of the loan.

    Humans will easily rationalize away the extra $40,000 over five years thinking about it as a dollar amount, that they might not when thinking about it extending the five years to five years and about a half a year. You’re literally buying time. With cash.

    And on a depreciating asset, the question always should be “Should I pay to borrow money to lose money?” Sometimes you do, the opportunity lost on not having the “widget” is high. Usually not on toys though.

    Thing is, as it relates to the government spending, I don’t think as a country we lose any opportunities we actually need, having three less aircraft carriers.

    Who knows on the entitlements... but I’m sure there’s some we don’t need as a society. Many of our entitlements are way beyond basic sustenance. But that’s a mixed bag, depending on the strength of your lobbyists who are making the profits off of the entitlements.
     
  4. denverpilot

    denverpilot Taxi to Parking

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    Meanwhile, back at the Ranch... where did the tax money Alaska used to use to pay for Aviation things go? That’d be the first question before accepting the assumption that a new tax is needed.
     
  5. NoHeat

    NoHeat En-Route

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    Is oil the answer?

    Declining production and lower commodity price?
     
  6. denverpilot

    denverpilot Taxi to Parking

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    I doubt it. It would take a lot of reduction to get there, considering the state hands Citizens checks most years from it.

    I suspect it’s like other government. Pretend they need more money when they spent the money elsewhere on stuff nobody told them to.
     
  7. Stewartb

    Stewartb En-Route

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    Either way, registration fee or fuel tax, the revenue will go to support rural airports, which the vast majority of Alaskan pilots don’t use. That’s what most of the resistance is about. Commercial operator registration fee is $250 while private owner fee is $150 (proposed). The mix of aircraft that utilize rural airports owned by the State favors commercial operations. If that's correct private guys will be taxed to support commercial ops that support villages. City guys will pay the lion’s share of the revenue although they won’t receive anything for it. A fuel tax increase would be more fair. Fly more-pay more. All Alaskan aircraft owners benefit from aviation in Alaska. The question should be how to fairly assess fees from the user groups.
     
  8. AKBill

    AKBill Cleared for Takeoff

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    I think NoHeat is more right than not. Don't quote me but I would bet oil production is down 75% from peak years and oil prices are at an all time low.
     
  9. AKBill

    AKBill Cleared for Takeoff

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    I agree, owners/operators will end up paying one way or another..it is what it is. Been parking outside for 20 years, that's not going to change..:(
     
    Last edited: Nov 17, 2017
  10. denverpilot

    denverpilot Taxi to Parking

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    And the politicians don’t want to stop handing the checks back? Seems like if they did that, 25% of the taxes of peak years would still be plenty to cover the services.

    Something is still being subsidized that politicians are scared to cut. So they’ll say an Aviation tax is needed because that always goes over well with the public. Even in Alaska where it’s transportation and not recreation, people still think aviators have more money than anyone else.

    Always easier for the politicians to claim Aviation is broke than something else.
     
  11. Stewartb

    Stewartb En-Route

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    If you want to sound intelligent you ought to stick with topics you have knowledge of.
     
  12. denverpilot

    denverpilot Taxi to Parking

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    What’s incorrect about it? Alaska residents don’t pay state tax. The get paid instead. Those funds could easily pay for airports or whatever else the citizens desire. They desire the checks. So politicians give them the checks. The Permanent Fund is the equivalent of a 50B annuity or pension program.

    So, handing a portion of the check back (in any of the three forms the OP says are on the table) as Aviation taxes, is just a lowering of the check for aviators.

    Net/Net it’ll come out of the “rich aviators” pockets instead of all pockets, even though Aviation infrastructure helps nearly everyone in that state. At first. Commercial aviators will just pass it along to the customers, so it’s a wash for them. Private aviators will pay for it out of their pockets which essentially

    What was inaccurate about the overall big picture assessment?

    The registration fee sucks it out of all aviators pockets directly and equally. Not good for anyone not flying much. The fuel tax sucks it out of aviators pockets via flight time, essentially. Not good for twins and things that go faster through horsepower. The landing fee sucks it out of aviators pockets via landings, not good for commercial ops doing short hauls.

    So everyone will have an opinion but the money all comes out of aviators pockets at first. Commercial aviators will just pass any of it along to customers. Non-commercial, it’s net/net just a lowering of your permanent fund check. Pick the one that costs the least for your specific flying.

    Cheapest for private aviators is probably the flat registration fee. Especially after a few years more of inflation, landing fees climb with use and fuel fees also climb with use, if you fly at all heavily privately, the flat fee with no inflation adjustment is probably the better deal. But you’d need to know the numbers on the proposed fuel tax and the proposed landing fee to do the math and know.

    Until some politician votes to adjust it all again later.

    The Aviation portion of Alaska DOT is $30M in the hole per most sources. A drop in the bucket comparatively. Divide $30M by all the aviators in Alaska and that’s how much they want from you. Not difficult math.
     
  13. jsstevens

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    yep. I dropped a zero. Corrected.
     
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  14. AKBill

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    :thumbsup::thumbsup:
     
  15. jonnyjetprop

    jonnyjetprop Line Up and Wait

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  16. denverpilot

    denverpilot Taxi to Parking

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  17. AKBill

    AKBill Cleared for Takeoff

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    Well I guess I would have to give you that one. The public and politicians are living in denial as far as money flow goes. So many years living without a state tax no one wants to see it return.

    I'm sure within the next few years a state tax will become a reality, that is unless pot sales do the Alaska debt as it did to Colorado's...:lol:..not going to happen.

    As far as the PFD, personally I don't care if they take it away. I would rather see no PFD and no state tax if possible. Time will tell.