Skip to comments.A lesson from the yacht tax [Nealz Nuze, 2011]
Posted on 10/06/2016 6:40:35 AM PDT by Arthur Wildfire! March
The current demonization of jets is eerily similar to the demonization of yacht owners in the early 1990s. Back in 1990, George (read my lips, no new taxes) H. W. Bush passed a budget, which included a luxury tax on yachts over $100,000 in addition to jewelry, furs, etc. At the time, the Joint Committee on Taxation believed that in 1991 it would be able to rack up $31 million from these luxury taxes. What was reality? They collected just $16 million. Oops. You see, people changed their behavior in response to new tax laws. Duhhhhhh. And then what do you know! These new taxes had an effect on the economy. George Will explains the economic consequences of this luxury tax:
According to a study done for the Joint Economic Committee, the tax destroyed 330 jobs in jewelry manufacturing, 1,470 in the aircraft industry and 7,600 in the boating industry. The job losses cost the government a total of $24.2 million in unemployment benefits and lost income tax revenues. So the net effect of the taxes was a loss of $7.6 million in fiscal 1991, which means the government projection was off by $38.6 million.
Yes --- when the screams of those who had lost their jobs were heard, and the failure of the new taxes to generate revenue was recognized, the taxes were repealed. Trouble is, the yacht building that had flown overseas as a result of the tax never really returned. But thats OK, I guess --- because only rich people buy yachts, right? Corporate CEOs and people like that. So screw them. If middle class people lose jobs in shipyards --- well then thats the price we just have to pay.
I may not have agreed with Boortz on everything, but the man was an overall voice of truth.
I’ve brought this one up often when sparring with liberals. It’s my personal favorite.
Yeah, history of the yacht tax is like sunlight on the vampire.
I listened to him for years, though I regularly tuned out when he would begin an anti-Christian rant or start promoting the murder of children. Boorzt, as a typical Libertarian, has issues with logic and morality that border on clinical. Deosn't surprise me that he joined the anti-Trump bandwagonhe is always looking for validation. And yes, the yacht tax was bad...
When the tax was passed, the yacht-building industry in Maine went out of business almost overnight. Hundreds of people out of work, in a state that could ill-afford such losses.
Liberals have no concept of human behavior; they think that their actions take place in a vacuum. For instance, there's no realization that rich people:
1) Don't buy yachts themselves, they have others take care of it for them.
2) Don't care if they buy Yachts made in Maine, or Bermuda, or Mexico. The yacht is just purchased, and delivered to the desired destination.
3) Became rich by spending their money wisely. If they can buy a Maine-made yacht for 12 Million, or the same thing made in Bermuda for 10 Million.... that's an easy decision.
But, it killed the custom boat industry. There were a lot of small boat builders along the Atlantic Coast -- family-run operations that had been around for generations.
Yes, some of them built "mega yachts", but most of them were simply upscale sailboats and motor cruisers. The threshold was set so low, it added a significant premium to the sales price.
Boat buyers stopped ordering new boats, and instead bought used boats. The tax improved the used market for a while, so if you were looking to sell an existing boat (and not replace it with a comparable model), you could get a better price.
It was a classic case of unintended consequences, and an object example of Daniel Webster's quote: "An unlimited power to tax involves, necessarily, a power to destroy".
Also, don’t mention the Laffer curve to liberals. ;-)
I’m not surprised either if Boortz is a ‘never-trumper’.
But it’s nice to see that his research is still online.
Just ask the libs where John Kerry had his $7 million custom yacht built, and why he chose to keep it in Rhode Island
‘... family-run operations that had been around for generations ...’
That really ticks me off to think about it all over again.
I mean — their kids are now part of the conglameration of ‘me toos’ ...
“I’m a bank teller.”
“I’m a law student.”
“Me too. I really liked to build yachts, but our family went out of business.”
When I was leaving the Navy, I wanted to parley my expertise in ship design and construction into a job in the yacht industry. The new tax on diesel, when used for boating, killed my prospects.
I have a friend who worked building yachts. He loved the work and earned good pay.
The tax put his company out of business and he has struggled off and on ever since.
Keeps branching out, doesn’t it?
The left keeps destroying the free market. Talent gets dispersed and squandered.
I’m sorry to ‘hear’ that.
When the government picks winners and losers, the decent people fall in the cracks while a few creepy cronies rake in cash.
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