President Biden wants companies SpaceX that use American airspace for rocket launches to start paying taxes into a federal fund that finances the work of air traffic controllers, per NYT.
President Joe Biden is proposing that private space companies like Elon Musk's SpaceX and Jeff Bezos' Blue Origin should start paying taxes to use US airspace, according to The New York Times. The budget proposal, released last month, suggests revising the aviation excise tax structure to include private space companies, which currently pay nothing despite requiring significant air traffic control resources for launches.
The current aviation excise taxes support the Airport and Airway Trust Fund, which funds the Federal Aviation Agency (FAA). These taxes are primarily paid by commercial airlines, which are charged 7.5% on each ticket price, amounting to about $5 to $20 per passenger.
Although space launches currently represent a small portion of commercial airspace (about 10% in 2023), they are expected to increase substantially, as noted in a report by the US Government Accountability Office (GAO) published in February. The FAA is already struggling to keep up with the growing pace of launches, which have increased by 48% from 2022 to 2023.
SpaceX, dominating the US commercial space sector, has already launched more than 30 rockets in 2024, surpassing its record of 96 rockets launched in 2023. However, commercial partners argue that taxing the industry could be premature, as many firms are in a fragile state financially, and spaceflight only occupies a small amount of time in the airspace, about 15 seconds per flight.
Biden's proposal is part of an overhaul of the aviation excise tax structure, driven in part by an independent safety review report published by the FAA last year. It also includes a call for private and corporate jet owners to increase their contributions, with a proposed increase in the tax on fuel to $1.06 per gallon over five years, up from 21.8 cents.
