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Proposed tax reforms could cripple industry

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Old 03-10-2006, 12:52 PM
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Default Proposed tax reforms could cripple industry

Boating Industry
Friday March 10, 2006

ALEXANDRIA, Va. - Consumer boaters association BoatU.S. is comparing the potential impact of a proposed elimination of the mortgage interest deduction for second homes to that of the luxury tax in the 90s.

In a BoatU.S. online survey, 75 percent of respondents said they were opposed to a proposal by the President's Advisory Panel on Tax Reform to end the mortgage interest deduction for all second homes, which includes boats that have sleeping quarters, cooking and toilet facilities, the association reported in a statement yesterday.

Fully 55 percent of those responding said that elimination of the deduction would cause them not to buy a boat they would otherwise purchase. Another 51 percent said they would not buy a boat if the deduction for interest on home equity loans was eliminated.

"The survey results should be a wake-up call for the boating industry," said Michael Sciulla, senior vice president of BoatU.S. government and public affairs. "Like the federal luxury tax of the early 1990's, the elimination of the mortgage interest deduction for boats will cripple an industry that is already facing serious challenges that include an increasing loss of access to the water, high fuel prices, and stagnant growth."

The tax reform panel released its report last October. Treasury Secretary John Snow was supposed to review the report and make recommendations to President Bush by the end of 2005 so that the President could present them to Congress.

In a speech earlier this week at Stanford University, Snow said the Bush administration wants to forge ahead with a major revamping of the tax code, but that no timetable had been established.
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Old 03-10-2006, 01:14 PM
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Default Re: Proposed tax reforms could cripple industry

I was just reading about this in my latest Boat US Mag.

March 9, 2006

NEWS From BoatUS
Boat Owners Association of The United States
880 S. Pickett St., Alexandria, VA 22304
BoatUS News Room at www.BoatUS.com

FOR IMMEDIATE RELEASE
Press Contacts: Scott Croft, 703-461-2864, [email protected]
Survey Reveals Great Distaste for Presidential
Tax Panel's Proposal to End Second
Home Mortgage Interest Deduction

It should come as no surprise that most Americans are skeptical when the government says it would like “to fix” the tax code. Such was the case recently as 75 percent of those responding to a BoatU.S. online survey said they were opposed to a proposal by the President’s Advisory Panel on Tax Reform to end the mortgage interest deduction for all second homes, which includes boats that have sleeping quarters, cooking and toilet facilities.

Fully 55 percent of those responding said that elimination of the deduction would cause them not to buy a boat they would otherwise purchase. Another 51 percent said they would not buy a boat if the deduction for interest on home equity loans was eliminated.

“The survey results should be a wake-up call for the boating industry,” said Michael Sciulla, senior vice president of BoatU.S. government and public affairs.

“Like the federal luxury tax of the early 1990’s, the elimination of the mortgage interest deduction for boats will cripple an industry that is already facing serious challenges that include an increasing loss of access to the water, high fuel prices, and stagnant growth,” he noted.

The tax reform panel released its report last October. Treasury Secretary John Snow was supposed to review the report and make recommendations to President Bush by the end of 2005 so that the President could present them to Congress.

In a speech earlier this week at Stanford University, Snow said the Bush administration wants to forge ahead with a major revamping of the tax code, but that no timetable had been established.

BoatU.S. – Boat Owners Association of The United States – is the nation’s leading advocate for recreational boaters providing its 640,000 members with a wide array of consumer services. For more information about BoatU.S., visit http://www.BoatUS.com
©2006, Boat Owners Association of The United States. All Rights Reserved.
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Old 03-10-2006, 01:34 PM
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Default Re: Proposed tax reforms could cripple industry

I did luxury mostly European cars in Toronto in the late 90's. One of the first things the government did was eliminate vehicles as write offs and than placed a federal tax on dealer sales only! It killed off the business completely; had alot of real estate agents as customers and they all but a few top sellers opted for either private vehicles or bought new less expensive cars. In the U.S when the government brought into effect the lux tax, almost all the luxury car brands had their worst sales figures in years. It's a proven fact that increase in taxes will decrease tax revenue and stall non-essential industry! This also includes other factors that become part of the con column on major decision purchases, raise in interest rates and high cost of fuel; bright lets toss in another negative factor!!!

Most of the people who make up the bulk of the luxury boat market and RV sales as well are people that kids have left the roost with equity built up into their family home! At least I'm mostly liquid, putting some money into gold and going to short some boat and RV related stocks....
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Old 03-10-2006, 09:56 PM
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Default Re: Proposed tax reforms could cripple industry

How else can we afford to cover all that social spending? IT IS 2/3rds of the budget, more if you include state budgets. Those "in the know" realize the key to socialism is medicine. Be prepared, it is coming.

We need to take care of those who just won't take care of themselves which now includes quite a few who may used to be considered self sufficient.

We Owe them! We built our "wealth" at their expense!

Doesn't really matter much if the AMT continues to spiral out of control.
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Old 03-10-2006, 10:28 PM
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Default Re: Proposed tax reforms could cripple industry

Remember when they did the Luxury tax in 1990 -10% on any boat over 100k and think it was 50k on jewelry and furs. 1st year it started 6,000 workers lost their jobs in the marine industry. Boat sales over 100k dropped 80-90% Even though people could afford them they clammed up just on principle.
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Old 03-10-2006, 11:01 PM
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It ain't gonna happen period. And here is why: All of the Senators and members of the House of Representatives have second homes in or around Washington D.C.. They all want the write-off for the second home they see as mandatory when you are a member of Congress. When is the last time Congress did something that wasn't in their best interest?
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Old 03-10-2006, 11:16 PM
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Default Re: Proposed tax reforms could cripple industry

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Originally Posted by simulatedjim
It ain't gonna happen period. And here is why: All of the Senators and members of the House of Representatives have second homes in or around Washington D.C.. They all want the write-off for the second home they see as mandatory when you are a member of Congress. When is the last time Congress did something that wasn't in their best interest?
I wonder, if Dems get a chance they will attack this as a "tax break for the rich", they NEED to create division to get votes, and this would be a good way to do so.

I think there is about a 50% chance of this being repealed in the next 36 months. Bush has prov en he is willing to step away from basic Conservative principles on fiscal matters, meaning this is not something that is already decided.

The damage will be to the whole resort, boating, waterfront home market. Given 5 year or so it will wash out, but in the short term it will depress prices on many, many properties and boats. This will be a big plus to non-second home type properties, which means the giant homes that the ultra rich buy.

People are just stupid enough to think that all they gotta do is raise taxes and the government will get money from "someone else". They are to stupid to realize that rich people got rich by knowing how to work the system. Making more of system will not change that.

Remember, politicians are FAR more worried about votes than our economy, and the basic truth is capitalism is not always "nice" and "feel good". I could not agree more with your assessment of what will happen to boat values.
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Old 03-11-2006, 12:43 AM
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Default Re: Proposed tax reforms could cripple industry

Fair Tax is all I have to say
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Old 03-11-2006, 01:00 PM
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Default Re: Proposed tax reforms could cripple industry

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Originally Posted by 88formula223
Fair Tax is all I have to say

And that my friend would be a flat tax rate. Remember how the media and politicians attacked Forbes when he ran on this platform? Probably won't happen.

We also need to redefine what "rich" is. Is it really a small business owner working 70 hours a week making 2-300K gross? Or is it someone making 7 figures on "unearned income such as dividends and rents?

Dean your right, it is about votes. There are way more receivers than payers out there, we are out numbered.

Is is one party or the other? The two biggest spending presidents we have ever had were both Republican and democrat. Their commonality was they were both Texans.

NO MORE TEXAN PRESIDENTS!
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Old 03-11-2006, 01:35 PM
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Default Re: Proposed tax reforms could cripple industry

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Originally Posted by 2112
. Remember how the media and politicians attacked Forbes when he ran on this platform?
Huh ?....
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