Texas House committee approves tax break

I'm glad Texas has their priorities right.

The Texas House Ways and Means Committee has approved a tax break for those who want to buy yachts costing $250,000 or more.

In a vote late Thursday, the committee approved a bill by Houston Republican Rep. John Davis. The proposed law would cap the maximum sales tax the state would collect on the sale of a personal boat.

Davis says the measure is needed because Florida has a similar law and boat buyers are going there to make their purchases. The measure passed on an 8-3 vote along party lines.

Democrats are outraged at the proposed tax break at a time when the state must cut $27 billion in state services from the budget.

The bill will now be considered by the full House

http://www.businessweek.com/ap/financialnews/D9MTFG5O0.htm

The_Amber_Spyglass wrote:I'm glad Texas has their priorities right.

On the flip side, maybe the tax is too high and no boats (or not very many) are being sold. No sales means no tax revenue.

The article never mentioned the boat sale climate in that regard. I might have to do some digging.

The_Amber_Spyglass wrote:I'm glad Texas has their priorities right.

The Texas House Ways and Means Committee has approved a tax break for those who want to buy yachts costing $250,000 or more.

In a vote late Thursday, the committee approved a bill by Houston Republican Rep. John Davis. The proposed law would cap the maximum sales tax the state would collect on the sale of a personal boat.

Davis says the measure is needed because Florida has a similar law and boat buyers are going there to make their purchases. The measure passed on an 8-3 vote along party lines.

Democrats are outraged at the proposed tax break at a time when the state must cut $27 billion in state services from the budget.

The bill will now be considered by the full House

http://www.businessweek.com/ap/financialnews/D9MTFG5O0.htm

If this is meant as a tongue-in-cheek, backhanded slam on Texas' decision here, then perhaps you forget who really gets hurt when the wealthy cease to buy their boats in Texas. You forget about the sales people who depend on their sales jobs to support their families. Or those companies who sell boats and employ others to do the sales and servicing who might go out of business because the taxes are driving customers to seek more favorable climes to purchase their boats. And what of those people who build those boats? What happens to their jobs if Texans stop buying them?

It is extremely shortsighted to ridicule Texas for making this decision when you consider the ramifications this tax could have on the many jobs associated with boat-making and boat selling.

Liberals are ever on the hunt for ways to punish the rich, never thinking how that punishment never fazes the intended target but has extremely detrimental effects on the very people they profess to be for - the working class.

I am reminded of the 10% luxury tax passed in 1990 and the impact this had. One, the tax did NOT collect anywhere near the amount of revenue predicted (shocker no?) because the rich just stopped buying the luxury items so taxed, and two, this resulted in the loss of 25,000 jobs in the yacht-making industry in two states alone!

It seems those who would seek to tax the rich in ever more creative ways never consider who they are really hurting. I wonder why that is?

The questions I have are: How many yachts were sold in Texas last year that were over the proposed cap? How many yachts sales were lost to Florida because of this tax difference?

Prospective buyers of these yachts will shop for the best deal, regardless of where they have to go to get it. Seriously, the state will end up losing more in revenue in the long run with higher taxation at the point of sale than they will if they put a cap on it. Southwest Airlines had a maintenance center in Dallas at Love Field. The city tax assessor deemed that Southwest was cheating Dallas out of property tax for the city. The assessor corrected that mistake and raised their taxes. Oh, now they get $0 taxes for that operation cause it moved to Oklahoma City along with the jobs the entity supported. These politicians don't have a clue on how to encourage retail, wholesale, or manufacturing to help support a state's employment.

Are so many jobs at risk, and so many yachts sold to think that such a tax break to people who probably would not notice the difference anyway would have such a critical impact?

This strikes me as a sweetener - or a thank you - to super-rich Republican voters and financers more than an attempt to stimulate an industry.

A cut in income tax would have benefited everybody at a time when food and fuel prices as skyrocketing, not just those who can afford to give substantial donations to political parties.

If those buyers buy from Florida (for example), then the state loses any gains at all. See what I mean?

That's the difference between here and Britain. Each state has it's own style of taxation. People will buy cheaper and go to the place to get it cheaper.

The_Amber_Spyglass wrote:Are so many jobs at risk, and so many yachts sold to think that such a tax break to people who probably would not notice the difference anyway would have such a critical impact?

This strikes me as a sweetener - or a thank you - to super-rich Republican voters and financers more than an attempt to stimulate an industry.

A cut in income tax would have benefited everybody at a time when food and fuel prices as skyrocketing, not just those who can afford to give substantial donations to political parties.

One might interpret it as such, but I can assure you it is not a "sweetener" in the least. That luxury tax I mentioned above - back in 1990 - it decimated the yacht building industry in New England and left 10's of thousands out of work and even forced the closing of some builders who had been in business for generations. It had such a negative impact that the tax was repealed within a year or so of being passed (if I recall the time line correctly... it was definitely repealed). The fact is, taxes, when they are too high, discourage the behaviors being taxed. It is just common sense and we have countless examples of the truth of this fact. This is why one should never believe a politician when they say they are going to raise X amount of money with a given tax... they never, EVER, collect the predicted revenue - and that is because taxes discourage the behaviors taxed.

As for a cut in the income tax, yes... that would be of much better benefit to all Texans.... if Texas had an income tax. But they don't. And since the Texas legislature cannot cut the national income tax, that pretty much makes the suggestion a moot point.

Texas relies on a state sales tax instead of a state income tax. In fact, the only way that can be changed is a vote by the citizens to change it because it's part of the state constitution.

Also, Texas has a high property tax.