My new post at Cato: “It’s as if the lawmakers in Annapolis didn’t realize that boats are mobile. I wish someone could have explained that to them.” [“Chesapeake Prosperity Sunk By Boat Tax“]
P.S. Not unrelated, Bloomberg video profiling Cherubini firm discusses ill-fated 1990 federal luxury boat tax, repealed after two years, which badly hurt U.S. boat builders by driving buyers abroad (via Chris Fountain).
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Not surprising – Maryland was a smuggler’s port and pirate haven long before there was a USA. Thievery is in their blood – hell, just look at Baltimore.
Even Mass. Senator John Kerry figured out it was cheaper to register his luxury yacht in lower tax neighbor Rhode Island. You’d think someone from Maryland could have called the good senator and ask his opinion about high taxes on boats.
Some tax-and-spenders might argue that a Federal yacht tax would eliminate invidious competition among States, but that has been tried also. A 1990 Federal yacht tax was repealed in 1992, following anguished complaints by the boating industry. Rich folks found other other ways to spend conspicuously, while boaters were left high and dry.
Before you raise a tax rate, you really need to analyze whether the tax revenue lost due to discouraging the thing taxed will be made up for by the greater revenue from the higher tax rate.
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