Taxing the rich and what can be learned from the 1991 yacht tax

[brett636]

http://articles.sun-sentinel.com/19...1090682_1_luxury-tax-tax-last-year-income-tax

So in 1991 Congress passes a 10% excise tax on all yachts costing over $100k, and just as then as it is now its a way for our government to attack those evil, disgusting, putrid rich people who liberal politicians love to hate so much. It didn't take long however for this tax to affect the "working people" who helped build and maintain these massive boats. Layoffs were happening all over the industry as yacht orders dwindled. This sudden drop in employment caused congress to rethink their original plan and repeal this rather unnecessary tax.

So what can we learn from this? Again we see liberal politicians calling for an increase on taxes for the wealthy. Never mind the fact that these wealthy individuals already pay a large percentage of the taxes collected by the government, it just isn't enough. Now, though, it isn't just one industry being targeted so much as it is an entire class of people responsible for most of the private investment that takes place in our economy. The very same people who use their money to start businesses and employ others are the people who democrats feel the need to target for more tax revenue. Basically they are an easy target because they make up a small percentage of the population, and stirring up a little wealthy envy seems to go a long way. Just keep in mind that if you support higher taxes on the rich that when the rich pay more in taxes so do the "working people". When fewer business owners have a motivation to expand fewer people have jobs an in economy where jobs come at a premium. When those who have the means to simply pick up and move wherever they want to do just that we will have less wealth, and overall higher unemployment and poverty in this country. That is all.

 

[moreluck]

Obama doesn't get that.........He keeps harping on " raise taxes "..................................

http://www.foxnews.com/politics/2011/06/29/obama-to-hold-press-conference-amid-budget-talks/

 

[moreluck]

 

[trplnkl]

Obama doesn't get that.........He keeps harping on " raise taxes "..................................

http://www.foxnews.com/politics/2011/06/29/obama-to-hold-press-conference-amid-budget-talks/

0bama isn't the only one that doesn't get it.

 

[moreluck]

Obama said Malia & Sasha are 13 & 10 and they finish their homework a day ahead of time......maybe we should put Malia & Sasha on the budget task!!!

 

[bbsam]

So, "Cut taxes, cut spending and the economy will roar back." Is that all ya got? Why doesn't David Stockman get it?

 

[moreluck]

Oh, and by the way, his daughters are 12 and 10. Wonder if he knows which one is which ??????????????

 

[wkmac]

So, "Cut taxes, cut spending and the economy will roar back." Is that all ya got? Why doesn't David Stockman get it?

Good point!

As to Brett's original point about the luxury yacht tax. Just thinking it all out, it's not like millions of yachts are sold each year which could generate a huge or even a modest amount of tax revenue. Revenue wise, this tax would only generate small potatoes on an annual basis so what was really behind it?

A 1994' article in The Freeman said the following concerning this yacht tax:

Despite all the talk about stimulating the economy, and the clear evidence that both the luxury taxes and higher taxes in general have pretty much destroyed the yacht-making industry, the tax did not generate any significant revenue, and has only cost taxpayers money by forcing workers onto the government dole. Congress originally estimated that the luxury tax on boats, aircraft, and jewelry would raise $5 million in taxes a year. Instead, the Treasury has lost $24 million through lost income-tax revenues and higher unemployment and welfare payments.

All that for only $5 mil per year in tax revs.?

My gut tells me if one could really backtrace the tax legislation and get the real backstory, the tax was meant to drive the smaller yacht builders from the marketplace which many yacht builders did have to call it a day. This in turn cleaned out the industry of competition and I'm betting a few majors were economically positioned to survive a couple of years (law passed and signed by Bush 1 in 90' and repealed in 93') under the tax because on the backend, they made up the difference having used the tax as a mechanism to increase their customer base or in truth limit the customers choices. No, they obviously didn't do it the old fashion free market way of better and lower costed product. As Stockman pointed out, good ole Crony Capitalism!

And he would be right!

 

[Babagounj]

[h=1]Sen. John Kerry skips town on sails tax[/h]
Isabel - Kerry’s luxe, 76-foot New Zealand-built Friendship sloop with an Edwardian-style, glossy varnished teak interior, two VIP main cabins and a pilothouse fitted with a wet bar and cold wine storage - was designed by Rhode Island boat designer Ted Fontaine.
But instead of berthing the vessel in Nantucket, where the senator summers with the missus, Teresa Heinz, Isabel’s hailing port is listed as “Newport” on her stern.
Massachusetts still collects a 6.25 percent sales tax and an annual excise tax on yachts. Sources say Isabel sold for something in the neighborhood of $7 million, meaning Kerry saved approximately $437,500 in sales tax and an annual excise tax of about $70,000.

(The Hill) — Former presidential candidate Sen. John Kerry (D-Mass.) thinks he could have done a good job leading the country.
“I would have been a good president,” he said Wednesday on “Imus in the Morning.” “Maybe even a great one.”

 

[UpstateNYUPSer(Ret)]

[h=1]Sen. John Kerry skips town on sails tax[/h]
Isabel - Kerry’s luxe, 76-foot New Zealand-built Friendship sloop with an Edwardian-style, glossy varnished teak interior, two VIP main cabins and a pilothouse fitted with a wet bar and cold wine storage - was designed by Rhode Island boat designer Ted Fontaine.
But instead of berthing the vessel in Nantucket, where the senator summers with the missus, Teresa Heinz, Isabel’s hailing port is listed as “Newport” on her stern.
Massachusetts still collects a 6.25 percent sales tax and an annual excise tax on yachts. Sources say Isabel sold for something in the neighborhood of $7 million, meaning Kerry saved approximately $437,500 in sales tax and an annual excise tax of about $70,000.

(The Hill) — Former presidential candidate Sen. John Kerry (D-Mass.) thinks he could have done a good job leading the country.
“I would have been a good president,” he said Wednesday on “Imus in the Morning.” “Maybe even a great one.”

How is this any different (except for the scale) than people who cross the border in to New Hampshire to avoid paying sales tax? Or motorists who cross the bridge between NY and VT for cheaper gas? Or smokers who go to the Indian reservation to buy cigarettes?

Would you willingly pay nearly $500K in taxes just to say that you did the right thing?

 

[trplnkl]

How is this any different (except for the scale) than people who cross the border in to New Hampshire to avoid paying sales tax? Or motorists who cross the bridge between NY and VT for cheaper gas? Or smokers who go to the Indian reservation to buy cigarettes?

Would you willingly pay nearly $500K in taxes just to say that you did the right thing?

The scale of taxes paid vs. income earned is the difference, not to mention the (ok I mentioned it) the hypocrisy of a filthy rich democrat avoiding taxes that he may have helped institute.

 

[Babagounj]

How is this any different (except for the scale) than people who cross the border in to New Hampshire to avoid paying sales tax? Or motorists who cross the bridge between NY and VT for cheaper gas? Or smokers who go to the Indian reservation to buy cigarettes?

Would you willingly pay nearly $500K in taxes just to say that you did the right thing?

Never mind the sheer hypocrisy of using such a blatant loophole to escape the very thing that you personally have voted for time and time again. John Kerry never met a tax increase he didn’t like. He’s also never met a luxury yacht he didn’t like.
The classic craft is now available for charter with rates beginning at $45,000 per week.
A Department of Revenue spokesman said Kerry would be liable for Massachusetts taxes if he berthed the boat in the Bay State within six months of its purchase and it had been spotted in Nantucket, Mass., where the senator summers with his wife Teresa Heinz. That would make Kerry liable for the sales tax.

​

 

[wkmac]

How is this any different (except for the scale) than people who cross the border in to New Hampshire to avoid paying sales tax? Or motorists who cross the bridge between NY and VT for cheaper gas? Or smokers who go to the Indian reservation to buy cigarettes?

Would you willingly pay nearly $500K in taxes just to say that you did the right thing?

It's not any different and you were correct in pointing it out. The county I live in has a cheaper sales tax than the county next to us where I actually work. Thus I tend to try and buy everything in our county because I know it will cost me more if I go next door. Look at govt's as business in some manner of speaking and if moving around to pay or avoid a tax is wrong, then so it shopping to avoid a higher price or otherwise get the best value for your money.

And yes, Trplnkl is right on the money about the hypocrisy in this case but on a much wider perspective, I'd would not have singled out the democrats alone in this!

 

[brett636]

So, "Cut taxes, cut spending and the economy will roar back." Is that all ya got? Why doesn't David Stockman get it?

Yes its all I've got because its all I need. There are many cases just like the one I stated above that support the fact that higher taxes lead to less wealth and lower economic growth and that lower taxes and spending does the opposite. Those of us who have been given the gift of reason understand this and this is why we are conservatives.

Good point!

As to Brett's original point about the luxury yacht tax. Just thinking it all out, it's not like millions of yachts are sold each year which could generate a huge or even a modest amount of tax revenue. Revenue wise, this tax would only generate small potatoes on an annual basis so what was really behind it?

A 1994' article in The Freeman said the following concerning this yacht tax:



All that for only $5 mil per year in tax revs.?

My gut tells me if one could really backtrace the tax legislation and get the real backstory, the tax was meant to drive the smaller yacht builders from the marketplace which many yacht builders did have to call it a day. This in turn cleaned out the industry of competition and I'm betting a few majors were economically positioned to survive a couple of years (law passed and signed by Bush 1 in 90' and repealed in 93') under the tax because on the backend, they made up the difference having used the tax as a mechanism to increase their customer base or in truth limit the customers choices. No, they obviously didn't do it the old fashion free market way of better and lower costed product. As Stockman pointed out, good ole Crony Capitalism!

And he would be right!

The revenue generated by the tax wasn't as important as the symbolism of the great politicians attacking those filthy, evil rich people. I believe you looked too far into this as it isn't that deep. Even the article you posted pointed out that this was a flat out attack on wealthy people and not crony capitalism. The yachting industry is not one that produces its product in high quantities each year, and those that went out of business should have had a plan to deal with a drop in orders. In fact I would be interested in knowing the age and size of the companies that went out of business as well as the number of yacht builders in 1990 versus today. I imagine that overall there hasn't been much change.

How is this any different (except for the scale) than people who cross the border in to New Hampshire to avoid paying sales tax? Or motorists who cross the bridge between NY and VT for cheaper gas? Or smokers who go to the Indian reservation to buy cigarettes?

Would you willingly pay nearly $500K in taxes just to say that you did the right thing?

Its the hypocrisy of it all. John Kerry is always fighting for higher taxes for the wealthy, but then uses a loophole to avoid paying them while at the same time demonizing other wealthy people for doing the same. Its kind of like how you come into the current even forums and state you don't know enough to form an opinion on the issue and then state your opinion. Its all about being a hypocrite.

 

[bbsam]

Ok, Brett. How then do you explain it to Stockman, Reagan's own budget wizard?

 

[wkmac]

The revenue generated by the tax wasn't as important as the symbolism of the great politicians attacking those filthy, evil rich people. I believe you looked too far into this as it isn't that deep. Even the article you posted pointed out that this was a flat out attack on wealthy people and not crony capitalism. The yachting industry is not one that produces its product in high quantities each year, and those that went out of business should have had a plan to deal with a drop in orders. In fact I would be interested in knowing the age and size of the companies that went out of business as well as the number of yacht builders in 1990 versus today. I imagine that overall there hasn't been much change.

Yeah but looking to deep is where you most often find the real truth! But regardless, a republican President signed the luxury tax into law in 1990', vetoed an attempt to repeal it in 1992' (HR.11) but then in August of 1993', a democrat President signed into law the repeal act which did away with it.

Opps! There I go looking to deep into the matter again. Besides, if now we put the monkey on Obama's back for the bad economic outcome now (and he does deserve a lot of credit) the consistent thing to do is maintain that standard and hold President G.H.W. Bush accountable to the same level!

Could you explain to me why a rich man would want to "tax the rich" if not to help out someone for purely business manipulation results using central planning means? Are you suggesting Bush 1 and the other republicans who vote for the The Revenue Reconciliation Act of 1990 were driven by rich envy and rich hatred?

 

[DS]

What would you do to create revenue? Me?
1 double cigarette taxes
2 double liquor taxes
3 raise luxury taxes
4 get out of the middle east
5 kill the space program
But I'm just a dumb canuck

 

[trplnkl]

What would you do to create revenue? Me?
1 double cigarette taxes
2 double liquor taxes
3 raise luxury taxes
4 get out of the middle east
5 kill the space program
But I'm just a dumb canuck

Don't smoke, drink or own a yacht huh? #s 4 & 5 would cost anyone (except people who loose their jobs) anything. Why not double the taxes on gasoline? It's pretty easy to say raise taxes on something you don't use, can't say your a dumb canuck(besides that title is already taken)

 

[bbsam]

Stupid Canadian is still open, though!

 

[trplnkl]

Stupid Canadian is still open, though!

Ahhh, but you forget, a certain 3 degree holder exists.