The provision's revenue neutrality, however, is a product of how it's been framed. The legislation appears cost-free to taxpayers only over a 10-year period: In fiscal year 2013, the first full year the new provision kicks in, it'll cost taxpayers $23 million in lost revenue, according to an
analysis by the JCT. The following two years, it costs $26 million and $28 million, respectively.
It becomes revenue neutral, in the eyes of Congress, by expiring. In 2016, the provision simply goes away, and the tax policy reverts to the previous structure (over which NetJets initially sued). With the provision gone, according to the JCT analysis, the industry starts paying more into the treasury: $101 million over the subsequent three years, 2016 to 2018. It raises a similar amount over the rest of the decade.
Of course, once the provision is in place, there is nothing to prevent NetJets from lobbying to extend that provision in 2016 to delay its expiration. The termination date has a happy consequence for K Street, too, as companies like NetJets are pressured to keep paying lobbying fees to keep the tax cut in place.
