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Nealz Nuze

Posted: 8:58 a.m. Thursday, June 30, 2011

A lesson from the yacht tax 


Yachts photo

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By Neal Boortz

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who had lost their jobs were heard, and the failure of the new taxes to generate revenue was recognized, the taxes were repealed.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 that’s 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 that’s the price we just have to pay.

Neal Boortz

About Neal Boortz

Neal Boortz chronicles his 42 years of talk radio in his book "Maybe I Should Just Shut Up and Go Away" Available on line and printed from Barnes and Noble and Amazon.

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