GA's "fair share"

"Mike Schumann" wrote in message
ink.net...
Airlines that make money pay income tax.

Mike Schumann


No they don't

Mike
MU-2


"Mike Rapoport" wrote in message
news

"Skylune" wrote in message
lkaboutaviation.com...
by "Mike Rapoport" Nov 4, 2005 at 07:10 PM


"Skylune" wrote in message
lkaboutaviation.com...
Current contribution is shown below. Increased AVGAS tax rates or user
fees are a given!

http://www.house.gov/transportation/...04-05memo.html


GA is also the only user that pays income tax."

What the ????? There is no income tax on general aviation. Maybe
you
mean the personal income tax, which everyone pays?



Yes that is what I meant. The airlines pay no income taxes. They report
a tax liability under GAAP accounting but there is an adjustment in the
cash flow statement. I am all for user fees if it applies equally to
everyone for everything since my total tax bill would decline by a huge
percentage.

Mike
MU-2

"Mike Rapoport" wrote:
Airlines that make money pay income tax.

Mike Schumann


No they don't


Southwest's SEC Form 10-K says they have been paying an income tax.

Fred F.

For a guy with the handle taxsrv, I am surprised that you don't know the
difference between GAAP and tax accounting and that you can't reconcile the
cash flow statement with the earnings statement. Southwest does not pay
income taxes.

Mike
MU-2


"TaxSrv" wrote in message
. ..
"Mike Rapoport" wrote:
Airlines that make money pay income tax.

Mike Schumann


No they don't


Southwest's SEC Form 10-K says they have been paying an income tax.

Fred F.

"Mike Rapoport" wrote:
For a guy with the handle taxsrv, I am surprised that you don't
know the
difference between GAAP and tax accounting and that you can't
reconcile the
cash flow statement with the earnings statement. Southwest does
not pay
income taxes.

Mike
MU-2

So you are saying that you know what's historically on their Forms
1120. In other words, always zero tax? Not even corporation AMT?
So how'd they get an actual tax refund on a carryback, per their
SEC filing for 2002, if they never paid any tax?

Fred F.

No, it is not always zero. Through 2001 they actually paid meaningful
amounts of income tax but not for the past four years although they have
been fairly profitable thoughout their history. They don't pay any
*currently* (past four years) and, absent a change in the tax code, they
probably won't in the future. Naturally LUV is probably the best (or worst)
example as they have the most profitable model. It is somewhat amazing to
me that the industry constantly gets bailed out either through bankrupcy,
subsidies or outright gifts from the public treasury. The public is paying
for the entire infrastructure through passenger facility fees, fuel taxes
and also though General Fund contributions. The industry is generating
wealth (witness people being willing to start new carriers) but it pays
nothing. It is the only industry that I am aware of like this.

Anyway, my point was that GA is paying in indirect ways (income taxes). If
you look at GA pilots or owners, they are well above the median income level
and the only things they get that everyone else doesn't are use of airports
and ATC. This isn't a totally fair way of looking at things because there
are high income people who are not pilots and aren't getting anything. In
my own case, I have paid millions in income tax over the past eight years
(since I started flying) and I wouldn't have earned as much or paid as much
tax if I did not have a personal airplane, so, isn't my use of the
infrastructure effecively being taxed at a very high rate? GA clearly isn't
paying for much of anything through fuel taxes but neither are the airlines
through any kind of taxes. The airling flying public is paying most of the
cost but a large part of the system is for their benefit.

I think that user fees are likely since our current administration abhors
"taxes" but spends like a drunken sailer, hence "user fees".

In any event the best solution is unlikely to be architected by the same
people who have been running the airline or airliner businesses. I think
that everyone can agree on this at least!

Mike
MU-2


"TaxSrv" wrote in message
. ..
"Mike Rapoport" wrote:
For a guy with the handle taxsrv, I am surprised that you don't
know the
difference between GAAP and tax accounting and that you can't
reconcile the
cash flow statement with the earnings statement. Southwest does
not pay
income taxes.

Mike
MU-2

So you are saying that you know what's historically on their Forms
1120. In other words, always zero tax? Not even corporation AMT?
So how'd they get an actual tax refund on a carryback, per their
SEC filing for 2002, if they never paid any tax?

Fred F.

On 2005-11-07, Mike Rapoport wrote:
In any event the best solution is unlikely to be architected by the same
people who have been running the airline or airliner businesses. I think
that everyone can agree on this at least!

In particular, even where GA pays handsomely, the airlines still whine
they are cross-subsidising GA. Here, for avgas, we pay probably over
$1/litre in excise duty and VAT (VAT being a tax tax, because a fair bit
of the VAT is a consequence of paying the excise duty. VAT should only
apply on the price of the product pre-other-taxes, but that's a rant for
another day). We also pay handsomely per use for CAA services. However,
the airlines argue that they are cross subsidising GA by conveniently
ignoring the crushingly high fuel taxes (they pay none) and the fact
that most GA airports in this country are essentially privately owned,
receiving no taxpayers money. The real story is that the airlines really
just want exclusive use of the sky (by pricing GA out of existence).

--
Dylan Smith, Port St Mary, Isle of Man
Flying: http://www.dylansmith.net
Oolite-Linux: an Elite tribute: http://oolite-linux.berlios.de
Frontier Elite Universe: http://www.alioth.net

For a guy with the handle taxsrv, I am surprised that you don't know the
difference between GAAP and tax accounting and that you can't reconcile the
cash flow statement with the earnings statement

Mike, if their 10K (GAAP) reports expenses for taxes, its a good bet
they are paying income tax.

-Robert

Sorry but that is not true. The income statement is based on GAAP which is
different from tax accounting. If you go to the cash flow statement you
will see an adjustment for taxes since they did not pay the amount in the
income statement.

Mike
MU-2


"Robert M. Gary" wrote in message
oups.com...
For a guy with the handle taxsrv, I am surprised that you don't know the
difference between GAAP and tax accounting and that you can't reconcile
the
cash flow statement with the earnings statement

Mike, if their 10K (GAAP) reports expenses for taxes, its a good bet
they are paying income tax.

-Robert

I have not looked at their tax statements, so I don't know what is going on.
They may be able to postpone tax payments due to investment tax credits,
etc. In the long run, if they keep making money, they will eventually be
paying income taxes if they don't already.

Mike Schumann

"Mike Rapoport" wrote in message
k.net...
Sorry but that is not true. The income statement is based on GAAP which
is different from tax accounting. If you go to the cash flow statement
you will see an adjustment for taxes since they did not pay the amount in
the income statement.

Mike
MU-2


"Robert M. Gary" wrote in message
oups.com...
For a guy with the handle taxsrv, I am surprised that you don't know the
difference between GAAP and tax accounting and that you can't reconcile
the
cash flow statement with the earnings statement

Mike, if their 10K (GAAP) reports expenses for taxes, its a good bet
they are paying income tax.

-Robert