Tax Breaks for Yachts Come Under Fire |
| Tax Breaks for Yachts Come Under Fire Posted: 06 May 2011 10:10 AM PDT
Just when yachters thought it was safe to go back in the water, Congress is making waves. Three Democratic members of the House have proposed the "Ending Taxpayer Subsidies for Yachts Act," which would amend a provision that allows yacht owners to write off their yacht-loan interest if they classify their boats as second homes. Their bill would allow deductions only for those who claim their boats as their primary residence. "Homeownership is part of the American Dream and we should encourage it, but yacht owners don't need any special handouts, especially in the middle of a budget crisis," said Gary Peters, a Democrat of Minnesota. There are no reliable stats on how many yacht owners take advantage of the subsidy. My guess is it's rather small, especially in the grand scheme of deficit reduction. But attacking yacht owners makes good political theater, so there's probably little to lose (except maybe, the votes of some angry boat owners and boat-builders). But it's not just Congress that's attacking yachters. In Texas, a bill that could cap the taxes paid on any yacht sale has come under fire from teachers groups. The bill would limit taxes paid for a yacht to $15,625, the amount normally paid for a $250,000 boat. Someone buying a $20 million boat and a $260,000 boat would pay the same dollar amount in state sales tax. The bill's author, State Rep. John Davis, say it's needed to win back boat business (like repairs and slip fees) from Florida. But critics point to an analysis that says the bill will cost the state $1.4 million a year. And at a time of fiscal austerity, tax breaks for yachters may be a tough sell. "So this bill is a tax break for mega-yacht owners?" Rep Mike Villarreal, a Democrat of San Antonio told the Express- News. "Have you considered turning this into an omnibus bill, and including limousines and fur coats and other luxury items? Because you know, we haven’t cut education enough this session, and there apparently aren’t enough nursing homes on the verge to close. What else can we do to bleed the state?" Do you think tax breaks for yachts will help or hurt the economy?
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