It seems that almost every two years, some member of Congress decides that all boaters are wealthy “fat cats” who should be punished by having the longstanding second home mortgage deduction on boat loan interest taken away.
Never mind that this tax deduction applies to any boat with a head (even a porta-potty), a berth (even if it’s just a convertible dinette) and a galley (yes, a $50 microwave oven qualifies) — just as it applies to similarly equipped recreational vehicles (RVs).
However, it evidently doesn’t resonate with most people when you call an RV owner a “fat cat,” so these legislators generally stick to attacking boaters for being able to take these tax deductions.
Despite several decades’ worth of different schemes being floated in Congress to eliminate tax deductions for boat loan interest, the second home tax deduction has survived. Reason has, so far, prevailed — and most legislators have grudgingly acknowledged that providing this deduction helps the economy.
The more people who can afford to buy a boat thanks to this deduction, the more boats are sold nationwide — and that means more tax revenue on purchases, more boat accessory and service purchases and more jobs in the marine industry.
A recent study released by the National Marine Manufacturers Association shows that the recreational marine industry contributes $121.5 billion annually to the U.S. economy, there are nearly 35,000 recreational boating-related businesses providing more than 338,000 jobs — and Americans spend $51 billion related to the more than 12 million registered recreational boats nationwide. It’s pretty clear to see how big an impact boating has on the U.S. economy. Unfortunately, not every member of Congress is smart enough to realize this.
Rep. Tim Walz of Minnesota and Rep. Mike Quigley of Illinois have just introduced a bill they call “The Ending Taxpayer Subsidies for Yachts Act” that would eliminate the second home deduction for boat loan interest.
According to a statement from Congressman Walz on his website, “Closing this tax loophole is a no-brainer step to cut down on wasteful spending. The Mortgage Interest Deduction was made to help middle-class families own a home and achieve the American Dream, not to subsidize yachts for the super-rich.”
The website statement goes on to add “Luxury yachts qualify for this deduction if they are equipped with bedding, toilet facilities, and a kitchen — these are the types of boats only the super-rich can afford.”
Walz and Quigley simply choose to ignore the fact that most boats with heads and galleys are owned by people who are NOT “super-rich” — or even slightly rich. Most of these boats are trailerable powerboats and sailboats owned by ordinary middle-class families who, presumably, have their own American Dream.
As we have done many times in the past, we will have to contact our own elected representatives in Congress and remind them that boating is one of the nation’s most popular forms of recreation, boaters are major contributors to the U.S. economy — and boaters are also voters, who can express our concerns at the ballot box, when necessary.