Tuesday, July 27, 2010
Following up on last week's post, Sen. John Kerry Skips Town on Sails Tax:
- Wall Street Journal, John Kerry -- A One-Man 'Benedict Arnold' Corporation; Mr. Kerry Sails Around the Tax Issue, by John Fund:
"Let's not get silly here." That was Senator John Kerry's response Friday to questions about his new $7 million yacht, Isabel, which last week was berthed in Rhode Island rather than in Mr. Kerry's home state of Massachusetts. In doing so, Mr. Kerry will save almost $500,000 a year in taxes. ...
[T]here's a smell of hypocrisy. In addition to sailing around the tax issue, Mr. Kerry chose to build his boat in New Zealand at a time when Bay State boat builders are having trouble keeping their work force employed. ...
It sounds like a perfect storm of political controversy for Mr. Kerry. The senator is the main sponsor of a bill that would squeeze U.S. lifestyles by cutting back on carbon emissions. At the same time, he has decided to treat himself to a new yacht, built overseas and carefully berthed outside the state he represents.
- FOX News. Kerry May Need to Pay $500k Tax on Yacht:
There are new details in the controversy over Sen. John Kerry's brand new boat. Kerry may still be on the hook for a half million dollars in excise taxes because he docked his yacht in Massachusetts less than six months after buying it.
- Boston Herald, John Kerry Bails on Taxing Questions:
Sen. John Kerry, hounded by questions over whether he is dodging state and local taxes on his ultra-luxe $7 million sailing yacht, yesterday slammed his car door on a pack of reporters demanding to know if he would pony up to the cash-strapped commonwealth.
Future of Capitalism, Explaining Kerry's Yacht-Tax Dodge:
If Great Point LLC is owned or controlled by Pennsylvania-based Teresa Heinz Kerry rather than by Massachusetts-based John Kerry, it may be that no Massachusetts use tax on the boat is owed.
And if you think mooring the yacht in Rhode Island rather than in Massachusetts is a tax dodge, the senator's spouse's decision to be a Pennsylvania resident rather than a Massachusetts one for tax purposes has its own advantages. The Massachusetts state income tax is 5.3%, while Pennsylvania's is 3.07%, according to the Tax Foundation. The Massachusetts estate tax is up to 16%, while the Pennsylvania inheritance tax maxes out at 4.5%. The lost income to Massachusetts as a result of Teresa Heinz Kerry's decision to be an official resident of Pennsylvania probably dwarfs the $500,000 or so at stake in the debate over where the yacht is moored.
(Hat Tip: Joshua Blank.)