Column cites effect of debt talks on marine industry - Trade Only Today

Column cites effect of debt talks on marine industry

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An opinion piece in The Washington Times this week looks at how the boating industry could be affected by the debt ceiling negotiation process under way in Washington, D.C.

“Both sides have agreed in principle to more than $2 trillion in spending cuts, but President Obama and Senate Majority Leader Harry Reid insist on saving face by eliminating relatively minuscule tax breaks on oil companies, boat manufacturers, horse owners and aircraft producers,” said the article by Emily Miller, a senior editor for the newspaper’s opinion pages. “None of the Democrats have advanced a serious argument about how tens of billions in tax hikes on specific industries would make a dent in $14.3 trillion worth of debt.”

Senate Republican Conference chairman Lamar Alexander pointed out on Wednesday that when Congress instituted a higher tax on yachts in 1990, it “about put the American boating industry out of business.” It cost 7,600 American jobs. And the federal government actually collected less money, it lost money, because the cost of unemployment benefits and lost revenue. The Tennessee Republican noted that the result was “Congress came back in 1993 and repealed it.”

The Democrats call any boat for which an American takes a deduction a “yacht.” In fact, most people who own boats are middle-class, with 75 percent of all boat owners having a household income of less than $100,000, Jim Currie, of the National Marine Manufacturers Association, told the newspaper.

“It’s all rhetoric that you are subsidizing rich people,” he said. Closing the mortgage deduction on boats “wouldn’t be meaningful; it will probably get lost in the rounding off,” he explained.

The $31 billion boatbuilding industry supports 135,000 jobs and is already struggling from the economic downturn.

“It’s unlikely that real reform will happen as long as Mr. Obama and Mr. Reid are fixated on small-time political gimmicks,” Miller said in the article. “In negotiating with the White House, Republicans should only cede ground on the so-called loopholes in exchange for bringing down tax rates in areas that will stimulate the kind of growth our economy desperately needs. On this last major hurdle, GOP leaders must hold strong against the urge to agree to tax increases just to get the deal done.”

Click here for the full article.

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