All right, it is now time to talk about the so-called yacht tax that thankfully was defeated last week. Newspapers and Democrat bloggers have spent lots of time, ink, and electrons beating up on Assembly Republicans for helping the "rich" in that vote, but they ignore basic economics. To them, a tax raises revenue, no matter what, and not raising a tax "deprives poor children of the health care" these lefties thought would come from this increased revenue.
Let’s ignore the fact that most government programs deliver money to bureaucrats, lobbyists, and those who get paid hundreds of thousands dollars from government, and that the alleged recipients of government largesse are mostly an excuse for politicians to take money from you and me, and give it to their political friends, whether those friends are government unions or government rent seekers.
The fact is that rule number one in any decision about taxes is that RAISING TAXES IS ALWAYS WRONG, no matter when, no matter how, no matter who pays them, no matter what the alleged program that is supposed to benefit from the tax. Since it is always wrong, anyone who decides to raise taxes on anyone better have a really good reason for it, and taxing the rich is not, in and of itself, a good reason, nor is "fairness," nor is starving children, families, or even saving baby seals. I give you to PJ O’Rourke’s discussion of this matter in Parlaiment of Whores as to what good reasons might be, but, suffice it to say, there aren’t many.
So what is wrong with a yacht tax? First of all, the only excuse anyone has for raising that tax is to "go after the rich." They however in pushing that argument forget that the rich are rich because they have learned how to keep their money, so if California raises its tax, the rich will just go elsewhere for any yacht they may want. So–who loses? Not the rich, they get their yacht. However, California based yacht sellers, and all of their employees (many of whom are not rich), lose their jobs because of this ill-considered tax. And, since most likely a yacht bought in Florida or Texas or North Carolina will be docked in those states, all of the people who work on those boats, or own the business that service those boats in California will lose their jobs. Those people are not rich either.
Worse than all of that from the tax raisers perspective is that the income tax revenue from all of those people will also be lost, so the few measely dollars that would have been raised from raising the tax will be overwhelmed by the lost income tax revenue from those who were selling, working on, or servicing the yachts. Thousands will be raised with the yacht tax, millions will be lost, all for a little bit of bad political rhetoric.
Those Republicans, Chuck DeVore, Jean Fuller and Bill Maze, who voted for the tax in committee, got smart, and opposed the tax on the floor. In that one vote, they did more for the people of California than all of the baloney, hot air, and posturing that anyone who wanted the tax, including the newspaper reporters and bloggers, did in the last five years. Good job to Assembly Republicans