NBAA president and CEO Ed Bolen gave a big thumbs down yesterday to legislation sponsored by Sen. Kirsten Gillibrand (D-N.Y.) “that would single out one industry, general aviation, for a change in its established depreciation schedule.” Gillibrand’s proposal would extend the current five-year tax-depreciation schedule for general aviation aircraft to seven years.

She claims that closing this “corporate jet loophole” would free up funding that would allow the FAA to halt sequestration-related furloughs of air traffic controllers. “It is estimated that this would save $2.702 billion over the next 10 years, which would more than pay for the air traffic controllers,” she said.

“Proposals like this one appear to put politically charged rhetoric ahead of serious policies for addressing the nation’s deficit,” Bolen said. “There is no ‘loophole’ involved in tax policies on aircraft purchase or other business assets; instead, such policies were recommended by the IRS decades ago, made into law by Congress in the 1980s and apply to everything from computers to cars to aircraft. The idea behind such policies is to encourage American businesses to continually upgrade the products they use, so they can remain competitive.”

Bolen’s argument for the shorter depreciation schedule was also validated by an unrelated tax study issued yesterday by the nonpartisan Tax Foundation. In this study, the group found that shorter depreciation schedules encourage more investment by businesses, causing the economy to grow at a faster pace.