Air Transport World

Industry sharpens its pencil over tax reform. (air lines)

Reform of the U.S. tax system won't occur this year. The budget deficit will absorb most of the time legislators have to devote to financial matters.

But, while wholesale revision of the tax code won't happen this year, most people expect major changes to occur in the near futur. There has been so much tinkering in the past, resulting in dissatisfaction with, ad flaunting of, the tax laws that most experts think them unworkable and inefficient in revenue-raising.

So financial managers across the country, including those in the airline industry, are sharpening their pencils, and adopting strategies to try to influence and cope with the changes. Business is particularly wary because, of the three major tax revisions proposed--by the Treasury Department and by two sets of legislators--all involve an increase in corporate taxes.

Tax Incentives

Many argue that, no matter what corporations pay in tax, individuals ultimately bear the burden through the purchase of those corporations' goods and services. Still, the perception exists that companies such as General Electric should be paying more tax, instead of sheltering profits through tax incentives. The issue boils down to the most efficient way of producing economic growth. …

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