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OPINION: Missing the target — or the boomerang bullet

The new Connecticut boating tax proposals, following staggering examples of similar crippling failures in the recent past, are simply amazing.


Sure, everyone yells when the tax finger is pointed in their direction. However, these taxes are aimed at the owners of yachts. The taxes can be advertised to the public by suggesting "we're going to get the rich guy." The rich guy will not suffer. And tax-friendly Rhode Island is not that far away.

Gov. Dan Malloy's budget proposal calls for removing four marine-related exemptions from the state's sales tax: winter storage fees, labor fees on maintenance and repairs, brokerage commissions and credit for trade-in values. Malloy also is seeking to impose a 3 percent luxury tax to be added to the general sales tax on the amount of a boat's purchase price above $100,000.

In the late 1980s Congress passed a "luxury tax" aimed at the "rich guys." They didn't get any rich guys, but they bankrupted many yacht manufacturers in the U.S.A.

Oops, sorry, we made a mistake; the law was repealed with an apology. But with market share lost to Taiwan, Sweden, England, France and China, few U.S. companies recovered to their previous dominance.

The "rich guys" bought offshore, then simply documented and kept these yachts on the move. That was then. Then will be again.

Connecticut boatyards, marinas and dealerships will see customers flee in fleets. What a shame. These yachts should be enjoyed here in lovely Connecticut waters - a perfect location between New York and Boston. Restaurants, museums and all other waterfront and taxable enterprises will collect far less for the tax man.

As a dealer of 43 years in Essex, Conn., it's hard to imagine how we or any other dealership could survive. As bad as this economic downturn has been, adding a sales tax to the cost of storing and repairing boats here just about finishes our winter repair work, as well as brokerage and new-boat sales.

Trades will become non-existent. Boats will not be brought here in the fall to be sold. The boats that once stayed, were traded or were sold and taxed in Connecticut will be no more. This source of tax income will greatly diminish. Repair work will be done in Rhode Island. New boats will be bought elsewhere. An outgoing tide and a southwest breeze leads to that safe, tax-sheltered cove, perhaps never to return. Is this lesson never learned?

This tax is so poorly aimed, so off-target that the very people who supported the state by collecting sales tax from the sales of boats, electronics and parts and in so many other ways will disappear. The "rich guys" will simply set sail and spend their lifestyle - and money - in adjacent waters. Yes, the boomerang bullet will miss the fleeing target and cost the state dearly in jobs and income. It is simply hard to imagine such stupidity.

Jim Eastland is the founder of Eastland Yachts in Essex, Conn., a dealership specializing in new and used sailboats.



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