Counterproductive Luxury TaxEditor: In the name of making...


October 25, 1991

Counterproductive Luxury Tax

Editor: In the name of making rich people bear their share of balancing the federal budget, Congress last fall enacted a luxury tax on new boats. The result has been a disaster for the U.S. boat building industry. More than 20,000 people are out of work, boat yards are going bankrupt and communities which depend upon boat building are in depression.

Congress has an opportunity in the closing weeks of this session to right the grievous wrong it made a year ago. It can repeal that tax and enact a more broadly based excise on marine diesel fuel, which presently carries no federal tax.

The rationale for the luxury boat tax was that if you taxed the things rich people buy, then you automatically taxed the rich.

Any boater could have told Congress how misplaced that rationale is. First, many boat buyers are modest-income people who sell their homes to live aboard their boats full time. They are buying a roof to cover their heads, not a luxury.

Second, because the rich have money, they also have choices -- and they are choosing not to buy boats. Does the tax hurt them? Not in the least.

Fortunately there is a more efficient and equitable way to get $145 million from wealthy yacht owners. Ever since 1951 Washington has taxed diesel fuel used in highway vehicles. But a large pleasure yacht, which generally burns diesel, is an ''off road vehicle'' and exempt from the tax. Like the farmer with a diesel-powered combine, the large yacht owner pays no federal tax at all on the diesel fuel he consumes. To carry the irony further, the gasoline generally used in smaller power boats carries a 14 cents per gallon federal tax.

Just in case you missed it, let me put it another way: federal law treats millionaire yacht owners as if they deserve the same tax break given our nation's wheat farmers. It treats the rich better than the less well off, who can afford only smaller, gasoline-powered boats.

By substituting a modest tax on diesel fuel used in pleasure boats for the clearly counterproductive luxury tax, Congress could (1) save thousands of American jobs, (2) give hope to dozens of communities that depend on the boat building industry, (3) bring parity to the tax treatment of wealthy vs. lower income boaters, (4) help improve boating safety, (5) encourage the design of fuel efficient boats and (6) actually raise money from the rich.

That sounds like a fair deal to me.

John G. Shannahan III.


The writer owns the Oxford Yacht Agency Inc.


Editor: Your Oct. 17 editorial regarding Senate Judiciary Committee leaks was an interesting exercise in duplicity. Somehow you managed to simultaneously defend the protection press participation in leaks while decrying those leaks that are illegal and not in the public interest.

Journalists should not be able to hide behind the First Amendment in order to protect those who leak information illegally. There is no reason for people who actively disseminate information in derogation of the law to expect their identities to be protected. One who illegally leaks information should do so with the full knowledge that the press will be powerless to afford them the privacy they so cavalierly deny others.

Leo Ryan Jr.


NRA Dictation

Editor: Once again the National Rifle Association has snapped the whip and Congress obediently jumped through the hoop. When the roll was called on the very mild bill to ban assault weapons, 247 elected congressmen acted like pusillanimous sniveling hypocrites.

There is no justification whatever for allowing anyone to purchase a weapon designed only for mass murder. The paranoids who run the NRA have made guns so easy to purchase that children carry them to school. How long are we going to put up with this insanity?

Howard H. Green.


Jazz Is Hither

Editor: J. D. Considine's Oct. 6 article, "After Davis: Whither Jazz?" makes some valid points about the continual need for change in the music, and Miles Davis certainly lived this philosophy more fully than any other jazz artist. But the conclusion of the article -- "the future for jazz looks dismal indeed" -- is utterly wrong.

Jazz continues to evolve and grow and the future will be bright, if only the public will be let in on this tightly-held secret. The jazz scene is full of innovators whose music is infectiously listenable, but they generally do not get the publicity of a Wynton Marsalis or a Miles Davis.

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