Biden Takes Aim At SpaceX's Tax-Free Ride In American Airspace

Whenever a rocket launch occurs, air traffic controllers ensure the safety of commercial flights by managing airspace closures and monitoring rocket debris, without receiving compensation from commercial space companies like SpaceX for these services. The Biden administration's budget proposal aims to change this by suggesting that for-profit space companies begin paying for their use of government air traffic control resources. The New York Times reports: Commercial space companies are exempt from aviation excise taxes that fill the coffers of the Airport and Airway Trust Fund, which pays for the F.A.A.'s work and will get roughly $18 billion in tax revenues for the current fiscal year. The taxes are paid primarily by commercial airlines, which are charged 7.5 percent of each ticket price and an additional fee of about $5 to $20 per passenger, depending on the destination of each flight. Mr. Biden's budget proposal vows to work with Congress to overhaul the tax structure and split the cost of operating the nation's air traffic control system. His promise is based in part on an independent safety review report commissioned by the F.A.A., which advises that the federal government update the excise taxes to charge commercial space companies.

Mr. Biden's call for revising the decades-old excise tax structure is part of his push to make richer Americans and wealthy corporations 'pay their fair share.' In his State of the Union speech last month, Mr. Biden also called for raising taxes on private and corporate jet users, including increasing the tax that they pay on jet fuel to $1.06 per gallon from 21.8 cents per gallon over five years. That tax on fuel currently makes up around 3 percent of the annual revenue of the trust fund, which depends heavily on what commercial airlines and its passengers pay. Yet commercial space companies do not contribute to that fund or share any of the cost that the public bears when rockets are launched, said William J. McGee, a former F.A.A.-licensed aircraft dispatcher and a senior fellow at the American Economic Liberties Project, a consumer advocacy group. 'This is a question of fundamental fairness,' Mr. McGee said. 'It would be the equivalent of having a toll system on a highway and waving through certain users and not others.'

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