The corporate jet par excellence…

…is Air Force One, according to Richard Epstein. Inspired by President Obama’s attack on “corporate jet owners” at Obama’s last press conference, Epstein seeks to set him straight on tax policy. He derives some basic lessons from a look at the use of Air Force One.

Obama’s attack on “corporate jet owners” provides a short course in populist demagogy. From the sound of it, you’d think Obama was against the deductibility of corporate jets — “a tax break for corporate jet owners” — but no. The attack was in service of a proposal to increase the depreciation schedule on corporate jets from five to seven years — even though Obama himself had signed the legislation reducing the depreciation schedule to its current form.

The hypocrisy is striking, but the disparity between Obama’s demagogy and Obama’s proposal is probably its most striking element. The purpose of the proposal is precisely the opportunity it affords to attack “corporate jet owners.” I prefer to think of them as “a discrete and insular minority,” in the words of a famous footnote in Supreme Court jurisprudence.

Obama’s demagogic attack on “corporate jet owners” last week put me in mind of Jimmy Carter’s attack on “the three-martini lunch.” I had forgotten what came of Carter’s war on the business lunch. I see the IRS offers this handy guide to the deductibility of business entertainment expenses (of which the three-martini lunch may be one form), and the AICPA has provided additional advice.

If I have this right, the “three-martini lunch” is still deductible after all these years — with a 50 percent allowance of the deduction. And under Obama’s proposal, “corporate jet owners” still have their tax break, though it would be slightly less valuable. The point isn’t revenue, it is theater. But how unimaginative! Let’s get serious and end the tax break for corporate jets! For corporate meals on corporate jets! For corporate pilots on corporate jets!

Professor Epstein characterizes Obama’s economics as “primitive” and explains: “First, it is not possible to gain more money for the public treasury by taxing heavily those practices that are efficient for a firm. Putting a special tax on corporate jets will cut corporate profits, leaving nary a dime to fund the worthy causes that the president promotes. To repeat a constant refrain, taxation policies that are unsound in good times do not become sound in bad times.”

What if Obama had abandoned demagogy and lurched into the truth? Professor Epstein proposes this honest comment on the NLRB’s prosecution of Boeing in lieu of Obama’s pathetic press conference dodge:

Right now, Lafe Solomon, my acting General Counsel of the NLRB, has decided to chase after Boeing for the temerity of seeking to open up a new plant in South Carolina in order to escape the risk of union strikes back in Seattle. Economic downturns create hard political choices. I think that it is wise for me as your president to spend your hard-earned tax dollars harassing a company whose increased profits from doing business in South Carolina could actually increase tax revenues. We have to get our priorities right, and mine are simple. Stay true to my union supporters, even if going after Boeing means losing money that could be spent on funding scholarships that let poor kids to go to college or to make sure that the food supply is safe against E. Coli infections.

Someone could make a good movie along these lines.