When he ran for president in 2004, Sen. John Kerry of Massachusetts blasted “tax breaks for the wealthiest” and “offshore tax havens” and he promised to “reward companies that create and keep good paying jobs where they belong – in the good old U.S.A.”
Those words have come back to bite the five-term U.S. senator after a Boston paper reported last Friday that Kerry and his wife avoided a huge tax by docking their new $7 million yacht outside Massachusetts. According to the Boston Herald, which broke the story, Kerry saved more than $500,000 by keeping the 76-foot luxury sloop in Rhode Island. The story has caused a mini-uproar in Massachusetts and drew thousands of comments from readers of the state’s newspapers.
If Kerry docked the boat in Massachusetts, he would have been liable for a onetime sales tax of about $440,000, plus an additional $70,000 each year in excise taxes. Rhode Island repealed taxes on yachts in 1993.
“That’s why those yachts tie up in Newport, because it’s one more loophole for the rich. It’s always been that way,” sailor Steve Kavanagh, owner of a modest 26-foot boat, told the Herald. “My problem is, Kerry’s someone who doesn’t hesitate to raise my taxes. When it comes to paying his share on this boat, it seems to be a different story.”
Kerry, and his minions, detail for Americans plans to keep “good paying jobs in the good old U.S.A” by proposing to reward companies that stay here. The real question Americans must ask is why do these companies leave in the first place?
Generations of anti-business legislation including burdensome environmental legislation, pro-union legislation, civil lawsuits and public media pressure against non-union companies (Wal-Mart, Toyota), and corporate taxes have caused businesses to flee this country for manufacturing and labor.
“Unfortunately, America’s corporate tax rate is among the highest in the world. The federal tax rate is 35 percent and state corporate tax systems push the overall tax rate up to about 40 percent. According to KPMG, this gives America the 3rd-highest corporate tax rate (out of 116 jurisdictions) in KPMG’s annual survey behind only the United Arab Emirates and Japan (and tied with Libya). We do “better” in the PWC/World Bank study of the total tax rate, scoring 118 out of 179 nations. But beating Argentina and the Central African Republic is hardly something to brag about. A new Cato Institute study looking at effective corporate tax rates, meanwhile, shows the United States with the highest burden of all developed nations.
“With numbers like this, no wonder some American companies have decided to move to other nations, with some even choosing Canada. Yet rather than fix the problem with a lower corporate tax rate, Obama and the Democrats want to increase the company tax burden – particularly on American multinationals that are trying to compete in global markets. Fortunately, that proposal is temporarily stalled, but with deficits and debt at record levels and almost no appetite for genuine spending restraint on Capitol Hill, this almost certainly means that politicians will continue to look at companies as potential ATM machines to finance bigger government. That’s good news for China and India, but bad news for American workers.”
Kerry and his minions preach about keeping U.S. jobs here from one side of their mouth, while giving speeches about taxing the rich and corporations out of the other side of their mouth. The minute they have an opportunity to help create U.S. jobs or pay the taxes they inflict upon the rest of us they do everything they can to avoid them.
When Kerry has a chance to practice what he preaches, he takes construction of this custom-built, seven million dollar, 76-foot yacht to New Zealand instead of nearby Maine, home of a large yacht-building industry. Construction of this yacht could have kept dozens of workers in the good old U.S.A. employed for a year or two, yacht builders said.
In the Marketwatch article listed above, Kerry suggested that unnamed opponents were playing politics with the issue and he insisted he did nothing wrong. “We pay enormous taxes to the state of Massachusetts and there is nothing illegal here,” he said. Kerry’s right, of course, there is nothing illegal about finding ways to avoid paying taxes. Perhaps immoral is a better word, and the word immoral should only be used in this case of finding ways to avoid taxes when it comes to Kerry and Kerry’s speeches and Kerry’s worldview.
Kerry’s spokesman said: “(The) yacht is based in Rhode Island for long-term maintenance and charter purposes, not because the state is a tax haven.” Of course! Kerry, and his limousine/yacht liberal friends, would never seek a tax haven. Just like his Kennedy friends would never abide by Not in My Back Yard politics regarding offshore windfarms on Cape Cod, and they would never avoid inheritance taxes through offshore banking.
It appears, also, that when the “long-term work” was done days later, the yacht was spotted berthed in Nantucket, Mass., where the Senator summers with his wife. Such an action would make Kerry liable for the 500k tax.
When Fox news Editor Joe Battenfeld asked Kerry about it, Kerry said: “That depends upon who owns it, Joe,” Kerry then told his driver, “Can I get out of here, please,” before he slammed the SUV’s door and drove off.
Kerry may have had in mind that the yacht is actually owned by a corporation in Pittsburgh, his wife’s hometown.