The National Business Aviation Association (“NBAA”) held its annual Business Aviation Convention and Exhibition in Las Vegas, Nevada in October. The event was preceded by the 2024 Tax, Regulatory & Risk Management Conference, a two-day event, which had more than 300 attendees (a record).
One particular topic weighed heavily on the minds of the conference this year: the then-pending federal elections. Professionals spoke about their busy dockets, but the sentiment during the conference was that a lot of work may have been idled while parties determined which political party wrestled control over the executive and legislative branches of government. The outcome is evident now, and well-established brokers have advised Aero Law Group that deal interest has escalated dramatically since the election.
The incoming Trump Administration, along with key members of the nascent Congressional majority, have already stated on the record that tax policy, inflation mitigation, and the broader economy will be a big focus right out of the gate in January 2025. As such, it is not a stretch to suggest that Americans may see a new tax cut plan at some point in the first or second quarter of 2025. With bonus depreciation phasing down and completely sunsetting in 2027 under current law, there may be a temporary renewal or a more permanent solution. Any number of new laws that trigger spending, while putting more money in the consumer’s hands, may have a substantial impact driving economic growth – and business aviation particularly. Similarly, it is entirely possible that private aircraft owners cease to be an express target of the IRS when it comes to revenue generation.
On the other hand, tariffs also appear to be a priority for the incoming administration. Reasonable minds disagree about the cost and benefit of tariffs. An argument can be made that aviation is a global enterprise, from manufacturing and service to purchase and sale. As such, any threat to the market can depress what is already a delicate industry. There is little doubt that substantial tariffs have the potential to raise consumer costs, contributing to inflation and slowing growth – at least in the short term. An estimate puts the cost of tariffs currently threatened at $2,600 per year for the average American household.[1] This is a short-term estimate, however, which does not compute potential long-term benefits in the form of reduced revenue demands on the U.S. Treasury, domestic job growth, and industrial strength – all of which can improve income and quality of life for everyone and drive down inflation when coupled with reduced production and energy costs.[2]
At the end of the day, there is much to be mindful of as we head into the new year. The attorneys at Aero Law Group are prepared to address these variables along with all business aviation needs.
The information in this article is intended to highlight potential issues with aircraft ownership and operations and is therefore general in nature. Please feel free to contact one of our experienced aviation attorneys directly to discuss your specific business/personal needs.
[1] Dorn, Andrew, How will Trump’s tariffs impact everyday Americans?, NewsNation, November 14, 2024, https://www.newsnationnow.com/business/your-money/trumps-tariffs-prices/ (accessed November 25, 2024).
[2] Cass, Oren, Trump’s Most Misunderstood Policy Proposal, The Atlantic, September 25, 2024, https://www.theatlantic.com/politics/archive/2024/09/economic-arguments-tariffs-trump/680015/ (accessed November 25, 2024).