“The Superyacht Industry means jobs for the United States,” the industry trade group’s Web site says.
That can only mean one thing: There’s some proposal kicking around on the Hill that would affect the boating industry. And sure enough, folks at the U.S. Superyacht Association (USSA) tell us there’s a proposal that would eliminate mortgage interest deductions for boats, which now qualify as second homes.
These folks are really not owners of “superyachts” — generally defined as sail or motor yachts around 80 feet or longer — but the overall industry would be affected, the trade association says.
Wealthy superyacht owners won the last big tax battle in the early 1990s, after Congress and “read my lips”George H.W. Bush slapped a 10 percent luxury tax on boats and other items selling for more than $100,000.
A chunk of the boating industry went under, many thousands of jobs were lost, and tax revenues were far less than anticipated, industry folks estimate.
Congress thought those patriotic uber-rich wouldn’t feel the economic pinch. They were right about that. But it wasn’t about the money.
“It’s not that they can’t afford it,” one yacht dealer told The Seattle Times back then, “it’s just that they refuse to pay it.” It was really a matter of principle.
As one yacht purchaser told PBS New Hour’s Kwame Holman after the tax was repealed, “I found it insulting.” The yachtsman said he nearly went abroad to buy his $2.5 million yacht. He would have had to pay about $240,000 more in taxes before the burden was lifted.
The new proposal, according to the Superyacht Association, would allow deductions on first and second home mortgages, but only up to a total value of $1.1 million. And it would exclude boats entirely.
As a result, the measure is “really only hitting the family boater,” said Kitty McGowan, executive director of the association, meaning people with a primary home and a family boat.
Well, middle-class folks won’t feel insulted or shop abroad for a 30-footer. But this proposal almost surely won’t float.