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Marketplace Scratch Pad

The yacht and plane stimulus

Scott Jagow Apr 16, 2009
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Like most states, Florida is cutting the budget, laying off workers and increasing fees and taxes. But Florida’s legislature is also considering a bill that would dramatically cap taxes on yachts and private planes. It’s being called, I kid you not, the Aviation and Maritime Full Employment Act.

The bill has quite a bit of support because it’s designed to “create jobs and spur economic growth:”

”I’m certainly not in favor of giving more tax breaks to the rich and famous, but I do want to make sure we can protect business and keep people employed,” said Sen. Nan Rich, D-Sunrise, who voted for the Senate version last week.

But besides the obvious political clumsiness of it, economists estimate the cap will cost Florida $8 million a year. This is a state with an $3 billion budget hole.

Plus, Floridians have to pay 6 percent tax on the full amount of a car purchase. Under this bill, people who buy boats or planes would only pay tax on the first $416,680. Sun-Sentinel columnist Michael Mayo points out that someone who bought a $4 million yacht would pay $240,000 in taxes at a 6 percent rate. Under this bill, they would pay $25,000:

If working people need to pay full freight on their only vehicles, then the wealthy should have to pay the full amount on their toys. It’s astounding — but not surprising — that the Legislature would even entertain this.

And people wonder why there is simmering class resentment in this country?

Nobody wants to begrudge the rich for being successful. But it’s hard not to hold grudges when exemptions such as these get carved out. The least they could do is play by the same tax rules.

The bill’s supporters say the economic benefit of the tax break will far outweigh the $8 million dollar loss.

Of course, they didn’t put a dollar figure on the benefits.

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