Tax-Free Yachts--Brought to you by the Republican Party

The Republican tax cut cult, as Arianna so aptly calls it in her new book, has achieved its zenith in California. Here, if you must have a yacht or private jet, you can have it tax-free. All you have to do is keep it out of the state for ninety days from the time of purchase and you pay no sales or use tax. But if you need a car you're taxed on it, no matter where you buy it. And last I checked, more working people need cars than yachts. As one of only three states in the union that mandates a two-thirds legislative majority to pass a budget (a key element of the right wing success in choking government), California's Republican Party can and does annually hold the budget hostage in return for subsidies for the rich.

This week, Governor Schwarzenegger will be forced to guess at the size of the budget deficit mountain. His team has suggested that it may become a new peak in the Alps, jutting up somewhere between $10 and $20 billion. I did not go to school in Austria like Arnold, but by my math that's a 100% difference, a pretty big guess even for him. And this year, unlike years past, if the legislature cannot come up with a budget by the end of the summer, our state will be broke.

Even in the face of that, the governor's Republican Party stands firm behind a loophole that costs at least $26 million a year. That's why the Courage Campaign, with funding from the California Nurses Association, created Yacht Party 2. You'll see the whole story in sixty seconds.

It's the essence of the Republican Party story in 2008: cut education, healthcare, housing, everything you can, but secure the lifestyles of those wealthiest among us. John McCain has nine houses, but no plan for Americans to keep or buy even one. While Mr. McCain has not spoken out about the yacht subsidies for the richest Californians, we have to believe he'd welcome his colleagues from California sailing right up the Potomac.

Tax free yachts. Brought to you by the California Yacht (Republican) Party. Wonder what they'll think of next?

Comments

[calguy]

The Shock Doctrine looms in CA.

Arnold is exaggerating the size of the budget, refusing to give on new taxes (along with the republican minority in the legislature), and giving evidence that despite his efforts to remake his image as a republican lite politician, that he is true to the corporate core a republican. Let us not forget his admiration for Milton Friedman (see http://gov.ca.gov/proclamation/5205/). California will experience the shock doctrine unless the dems in the legislature push back with the voters at their backs. I am concerned.

[WilliePilgrim]

It is a disgracefull example of how the powerfull jigger the laws to favor their own interests. Unfortunately we tend to heap animosity onto the rich as if adding a new tax law would fix things but instead we find the powerfull simply use thier wealth and influence to manipulate the system so more and blammo! We're not stuck with another byzantine law we need a team of experts that we can't afford anyway in order to not get snarled up in it outselves.
It's for this reason I favor eliminating the criteria of wealth as a form of personal taxation and favor the implementation of a consumer tax (the two must be simultaneous or we'll end up with both), because there is certainly one thing the rich do that is taxable that I don't: spend vast sums of money. The complaint th at it is unfair to the poor to tax their basic needs might be true on the surface but in reality the system we have now is very unfair and everything we do to try to even it out makes it even more cumbersome and that really burdens those of us who would like to save and build for a better tomorrow.

[Indoboy7]

This comment is for all californians.We can snipe at ANY politician 24/7/365, but the ugly truth is that every californian must take responsibility for having the attention span of a gnat where it concerns california governmental shenanigens......When there is SOMETHING we don't like, we RECALL.........Think for a minute, WE ALLOW our legislators in Sacramento to spend OUR HARD EARNED tax $$$$ llike drunken sailors..California's budget priorities have been allowed to run rudderless for years....NOONE could possibly run their own household budget in that way and remain fiscally viable...WHY are WE, the people of California NOT forcing the legislators to set spending priorities..? For instance:...ALL gas taxes collected MUST be spend on HIghways, roads, and maintenance (infrastructure)....ONLY.- instead, we allow these funds to go into the GENERAL FUND,....HELLO....!!!!!!!!!
..How many of us have increased car repairs because the abominably bad roads ALL OVER this state..?Must we first have people killed in a bridge collapse before our attention gets drawn to where it REALLY belongs..?...There should be a freeze on ALL legislators wages until our budget is balance...(there's an incentive for them to sit down, roll up their sleeves and do REAL LEGISLATING, instead of traipsing all over the world (1st class) to "learn how to run California"............Let's reform our budgetary process, instead of Alice-in-Wonderland system we now ..WAKE UP,,EVERYBODY..Democrat, Repubican, Independent, yes the disenchated need to get in on this.....

[gonavy]

I would like for Don Perata to refund every penny of taxpayer money that was spend on the recall of Jeff Denham. This whole stunt is a shame to the state and to his party.

[gdcook1969]

This has been talked about before.. unlike cars, luxury yachts are a purchase that can be deferred - or done elsewhere (set up a trust in the Caribbean, buy a yacht, and keep it down there..). So when they taxed these luxury items heavily, the market dried up.. which then put a LOT of boat builders out of business, who then laid off all their employees.

For people who argue about a loophole here, remember the biggest loopholes that many people receive - its not on boats or cars.. its the mortgage interest deducation on your home and the deductibility of employee-paid health insurance. We have met the special interests and they are us.

As for Cali, the boat builder tax pales in comparison to the benefits handed out to public sector unions in the past 20 years. Anyone visit the bankrupt city of Vallejo recently?

[TheRealMacDaddy]

Well your "Loophole" agrument is pretty damn Loopy if you ask me! You said "For people who argue about a loophole here, remember the biggest loopholes that many people receive - its not on boats or cars.. its the mortgage interest deducation on your home".

The thing you seem to forget is people with mortgages pay this little thing called...Property Taxes.

Most of us can't afford a Yacht or a personal aeroplane like Corporate CEOs let alone buy one and secret it out of the State where it was purchased and keep from paying sales taxes on it. Mortgage Interest deductions wouldn't be necessary if it were not for the USERY of the mortgage lending institutes.

[kgb999]

Name two local (to California) boat builders that went out of business because of a California luxury tax.

[Chubbster]

More endless whining (envy) regarding the so-called rich. Can't we get past this ridiculous point? As a factual matter the rich currently pay 90% of the taxes but you'd never know it from all the endless slagging. It is almost as dumb -probably the same idiots- who promote the lie that energy companies are responsible for high gas prices. The level of internet-fueled, ignorant, potty mouthed moron-hood is a rampant and growing astonishment.

[novowel4me]

Do you have any kind of statistic on the number of "Rich" who actually earned their wealth as opposed to those who inherited it? My experience is that the most rabidly conservative tax cutters who sneer at those who "just need to pull themselves up by their bootstraps" are those sitting on a trust fund. Furthermore as you should know wealth at a certain level creates opportunities unavailable to 98% of US citizens. Like the opportunity to influence local, regional and even national legislation, subsidies and regulations to further enrich themselves. Maybe we ought to divide up the debt and allocate a share according to net worth and weight by if it was actually earned by the holder.

[macdon1]

I don't have the hard figures regarding how many richies are "trustafarians" but one has only to look at the American dynasties who have intermarried with each other over the past 100 years to know that there is a concerted effort to keep the wealth within a very elite circle. Having lived 35 years in Boston and Cape Cod I certainly had a firsthand look. Here in California where I now live there is more "new money" but on the east coast it is definitely dynastic, and of course that is the location of Washington DC, the headquarters of the "Power Elite".

[USisLiberal]

They don't pay 90% of the taxes. That's a ridiculous claim.

They pay about 70%. And that's only because they control about 80% of the wealth.

The missing 10% tax burden is shouldered by the working class who don't have the tax shelters, right offs, and accountants the rich do.

So let's quit the argument about how much the rich pay in taxes. It's idiotic.

[GhostofBillHicks]

Cavuto,is that you?

[bgregs]

While I will grant that the rich do pay more of the taxes as a dollar amount than the poor, there are two things that you are either forgetting, or ignoring:

The rich pay a smaller PERCENTAGE of the taxes (compared to their income) than do the middle class and poor, while using a MUCH LARGER percentage of the state's outlays than do the middle class and poor.

The state is between 10 BILLION and 20 BILLION dollars in the hole, THIS YEAR ALONE!

Because of these two facts, the rich should not only be paying a larger dollar amount, they should be paying a larger percentage, AND the state needs to take in more money, thus defeating your entire "argument"!

[Oldbuck]

I would say its time people get off their duffs and go vote and take our country back. Vote for a Democratic and send a republican home.

[feo]

As a spokesman for the Rich People of America (RPA) I have to take exception to some of the comments posted here. Most rich people worked very hard at being born into rich families and shouldn't be picked on so much. Okay, so a few others got rich playing baseball or inventing semi-useless software, but these are the exception and should not be lumped together with those who got it all by the complex process of good luck. Now, some say that if one can afford a yacht, one can also afford to pay taxes on a yacht. While this is true, it misses the point that the rich like to make, which is: principle. What would become of the world if people did things simply because they could afford to so? Tsk, tsk, plebians.

[watererbob]

Even more unfair is the fact that there's no sales tax on stocks! Buy your kid a car (not that I advocate that - if they don't earn it themselves, they are less likely to appreciate & take care of it) but anyway - buy them a car - and it's taxed. Buy them a car Company - no tax!

[torrrep]

O.k. so now we will blame the California budget crisis on yachts. Never mind the fact that we have 10 million illegal residents paying little to not taxes. Never mind that these 10 million get free education, free healthcare, in state tuition, and many other social benefits such as medicaid and medi-cal that they they are not entitled to. Never mind that these 10 million have driven down the wages of law abiding legal citizens working in formerly high paying jobs. Never mind that this depression of wages has decreased tax revenue while their collection of services has increased indebtedness of the state. Let's blame everything on the Republicans. Forget the fact that it is liberals who actually want illegal aliens to have the right to vote. Forget the fact that it is liberals that refuse to enforce the laws of the land as far as checking residency status for services rendered. Let's just blame everything on Republicans because of course only they are the problems. You people wonder why states like California are struggling. How can it possibly struggle with so many "rich" people paying taxes. Your solutions are to ask the rich to pay more. And to allow those that don't pay anything to keep getting services. And you wonder why conservatives are against higher taxes. Unbelievable.

[wmfor]

The only estimate I've seen of the number of illegal aliens in the entire country is 12 million--not insignificant of course. But I find it hard to believe that 10 million of them are in California.

[KHAAANNN]

OK, dip$hit. If you want everyone to pay taxes, including "illegal aliens" (how did Arnold get into the country?) then you MUST support a VAT (Value Added Tax.)
You know, where every time you buy something, you pay taxes on it. No exceptions.
That way those dirty Mexicans who are stealing all those high-paying septic-tank-cleaning and lettuce-picking jobs that good red-blooded Americans are lining up to do for $5/hour will be FORCED to pay their fair share. Right along with the companies that employ them. and YOU. There would be NO income taxes, just the VAT, at around %30.
Sounds fair to me, buy a Yacht for 5 Million, pay 1.5 Mill in tax. It's just the "price of doing business".

[fillou]

Dear torrrep, who hires these illegal aliens ? They surely don't come to the Usa for vacation. Who pays them to work in farms or to clean up your house or your pool for LESS than 4 bucks an hour ?

Funny how the people who blame immigrants are the same people that ask for cheap labor. What happens to a guy that hires illegals ? A slap on the wrist or maybe they have to say 5 times "Ave Maria" to be forgiven ?
Because YOU forgot that the people who hire illegals DON'T PAY PAYROLL TAXES, but you forgot about that, you have a nice hypocrit selective memory. Easier to blame aliens that AMERICAN people who EXPLOIT THEM

[MrJoyboy]

Hey, genius, the illegals wouldn't be here if rich Republicans who own businesses and fancy houses didn't hire them to do their dirty work at rock-bottom wages.

[USisLiberal]

And let's forget that fact that the Federal government is paying billions of dollars to continue the illegal occupation of another country. Let's forget the fact that corporations are paying less and less each year in taxes both local and federal and yet are reaping record profits. Let's forget that selling stocks used to be taxed like selling any other commodity. Let's forget how much the federal government pays in interest thanks to the GOP borrow and spend fiscal philosophy. And let's forget thanks to the GOP tax break, the rich are paying much less in taxes then they did. And let's forget that the rich have on average 2-3 undocumented people working on their property at any given time.

And let's absolutely forget that the federal government has significantly slashed the tax revenues it used to pay out to the states to help create better lives for their citizens.

[Kundera]

Remember the luxury tax Dems?? Teddy K and Co. thought that by raising taxes on yachts would help the poor. It did just the opposite. It hurt salespeople, and builders etc.... So Democrats reversed their idiotic law.

[jimrs]

Don't forget folks-we are number 1...

[benalbanach]

...and still there are the less than rich that vote republican. !?

[bgregs]

But it's a MUCH smaller percentage than it was even back in 2006!!!

[KMan1]

Yeah it’s simply mind-boggling.

[Mike O.]

They too would like to have a tax free yacht one day. It makes perfect sense to me, but then I'm a conservative.

[EspritDeVoltaire]

Yes, the Stockholm syndrome is alive and well among US voters as you demonstrate.

[Mike O.]

P.S. I'm NOT joking.

[Galt907]

Not being a citizen of California, some might question my right or interest in responding to this post. I do so because it seems indicative of a disturbing trend throughout our country: "Help the rich get richer and to hell with the rest."

The stability of our great country has been provided in large part by a large, upwardly mobile middle class. (Notably missing in South American countries, whose national sport has long been revolution.)
With our overwhelming concern for creating a class of nobility determined by wealth and birth, we are abandoning two and a third centuries of committment.

Given that our government has abandoned the Constitution, it should comes as no surprise to me that we are now abandoning the principles that made us great.

When history recounts the age of The United States, we will not be judged by how easy we made life for the rich and privileged, but by how well we helped the less fortunate achieve their full share of the American Dream.

[torrrep]

This is your problem. There is no SHARE of the American dream. You seem to think everyone is ENTITLED to their share of the dream. Others think you should earn it. The constitution doesn't state ANYTHING about people being entitled to be rich. I've worked hard for everything I have and my family and I are content. We don't cry because someone has more than us. We don't cry saying that we are being held back or things just aren't fair. We live within our means and we enjoy and are thankful for everything we have. We are not rich by any means. We make less than 6 figures and live in California where costs are high. Yet we still survive and enjoy life to the fullest. We give 10% to our church and STILL live comfortably. We give to those and need whether it be money or time and services. The problem isn't that some are rich and some are poor. The problem is that there are many who are controlled by envy and despise all that are more fortunate than themselves. If someone has more money than me so what? I take care of my family and enjoy what I have. Maybe some of you should try the same.

[RoloTomassi]

"I take care of my family and enjoy what I have. Maybe some of you should try the same."

Perhaps you should use some of that hard earned capital you have laying around and purchase a dictionary; once you have that in your hands, look up the word EMPATHY.

You and your ilk are completely devoid of it, and you need it to be what we call HUMANE.

The only thing you know how to do is bitch about what you think someone else is taking from you; as history proves time and again, the best way for a rightwinger to gain a bit of empathy is to lose EVERYTHING.

And so, thanks to those like you and the geniuses who use you to their gain, you may well have the opportunity to gain a bit of empathy, but I won't wish that on you; I wouldn't want you to gain anything without working hard to attain it.

[USisLiberal]

And your first 12 years of education were gotten how?

[Galt907]

Dear Torrep;

When I need an uneducated, unthinking, anti-American such as you to tell me about the constitution, I'll know it's time to give up my University faculty position teaching Constitutional Law. As for your paltry attempt at self-congratulations for tithing . ..I was always taught that 10% was the minimum, usually bragged about by those with little else to their credit. I sincerely wish you well in the next life, as you clearly have little or no understanding of this one.

[NoOneSpecial]

Your thinking is betrayed in this self-conceited sentence:

"The problem is that there are many who are controlled by envy and despise all that are more fortunate than themselves. "

This is another way of saying "the poor are lazy bastards who just want a free ride on my dime." It's completely wrong and totally self-serving.

In a progressive democracy, the social contract is for all citizens to contribute to those ideals that are held as essential to the COMMON GOOD. People pay taxes, but the rich pay more because they use and own more, and we the people provide them the societal framework that allows them to BE rich.

Being rich is a privilege. You're expected to pay more for that privilege. Don't like it? Try being rich on your own island nation with population: you.

The problem you so aptly demonstrate in your thinking is a belief you shouldn't have to honor that social contract. As is being well-off should let you off the hook for paying back to this country what you take from it. Or you whine about how "unfair" it all is.

Stuff it. Everyone can gripe about what's the most efficient way to use tax money, but being well-off doesn't entitle you to ignore your obligations to the country that you call home and thus its citizens who may not have the good fortune, gifts, and talents that you got in this life.

[wmfor]

Your statement about the disappearing middle class and South America suggested to me that perhaps they should change their name to The Banana Republican Party.

[bruce9432]

First fire all the illegals that do the fiber glass work on the yacht. Next get rid of the Catepillar employees that work on the diesels, then all the artisans that work on the finish. California is broken and we are going to see what illegal immigration really costs, cuz there aint no money left. 20 Billion dollars and growing.

[totalliberal]

What has that got to do with not taxing yachts?

[NoeR]

Illegals comprise about 4% of the country's population. You make it sound as if they have all the jobs. If the illegals actually do have all the jobs, I believe you should get your ass off welfare and get out there and start competing for some of those jobs. Your head has been filled with lying, inconsistent, Republican propaganda, son. The illegals are not the problem. The Republicans are. They will give jobs to anyone who will work for less. In Texas, as in a few other states, there is actually a law that allows this. The law takes advantage of a Republican designed loophole in the federal Taft-Hartley Act (Section 14B) which allows open-shop employment if the State government enacts a Right-to-Work law. You can either work union, which disallows non-citizenship, or work for less. Texas has been a red state as long as I can remember and is where Bush came from. It is also the state I came from and am proud to be far away from now.

[torrrep]

Wrong. The national number is closer to 10%. And in California that number is 25%. Construction workers, plumbers, electricians, floor installers, drywall hangers, painters, and many other formerly paid high skill trades now have had their wages driven down by illegals being employed and paid under the table in many cases. Your example about texas is flawed. Illegals are NOT permitted to work in the U.S. regardless of whether they are in the union or not. Working for less still applies to those who are here legally. Not to illegal aliens. Also, legal residents of the U.S. should NOT be competing with illegals for jobs. You talk about propaganda yet you are ignorant of the laws. "Giving jobs to those who work for less" usually means paying someone who is illegally here. I hear all the time from liberals about how there needs to be equal pay for equal work yet now you say it's o.k. to pay someone less for the same work. Which is it? Could you be any more hypocritical?

[LouisPWu]

Republicans are sleaze, slime, and greed. But at least they're up front about it.

[KMan1]

True, I will give them that.

[Sparhawk]

Gee, Hollywood is LIVID about this....

Oh that's right..all the Yachts in CA are owned by Republicans

Riiiiiiiiiiight

[bgregs]

But a rising tide lifts all yachts!

[leftcoastindy]

This rediculous tax cut is putting money into my pocket, and as a result, I will have to send money to my kids schools to make up for it. Not so for the rich bastards who would rather save a few percent or get a couple feet longer yacht than educate the youth of our once great country.

[torrrep]

Not bitter are you?