We’ve heard of liberal politicians calling for extra taxes on the wealthy by taxing their yachts and private planes, but special tax breaks for those same luxury items are nearly unheard of.
The New York Post reports that state lawmakers in New York have reached an agreement to give yachts and private planes a special tax break.
“The first $230,000 of all boat sales would still be fully taxed, but no sales tax would be collected on any purchase above that amount,” Post reporters Kirstan Conley and Carl Campanile wrote. “The deal also applies to private plane sales.”
The change means that buyers of cheap boats will actually pay a higher effective sales tax rate than billionaires who buy yachts for $230,000 or more.
State Assembly Speaker Carl Heastie, a Democrat, and State Senate Majority Leader Dean Skelos, a Republican, both called the tax break a jobs issue, saying the tax break keeps New York competitive for yacht purchases. Florida has a similar tax break for yachts, where the maximum tax payment on a boat purchase is $18,000.
To be fair, special tax hikes on yachts and private planes largely hurt the workers that manufacture those luxury goods, not the rich, who are more likely to purchase a different luxury item or look in another state instead.
However, the argument that special tax breaks create jobs applies to all industries. What makes yachts and private planes more deserving for job-creating tax breaks than any other industry?
Skelos referred to the film tax credit in New York, which often gets the same job creation argument but still can’t justify why it is especially deserving of a tax break.
The average state and local sales tax rate in Florida is 6.6 percent, while New York’s is 8.5 percent, according to Tax Foundation data.
Maryland imposes a 5 percent excise tax on boat purchases, with a maximum $15,000 tax payment.
