Ignorance, Stupidity or Connivance?

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President Barack Obama has called for a luxury tax on corporate jets as a means to generate revenue to fight federal deficits. The president’s economic advisers ought to be fired for not telling him that doing so is unwise and counterproductive. They might have already told him so, only to have the president say, “Look, I know you’re right, but I’m exploiting the public’s envy of the rich!” Let’s look at what happened when Obama’s predecessor George H.W. Bush signed the Omnibus Budget Reconciliation Act of 1990 and broke his “read my lips” vow not to agree to new taxes.

When Congress imposed a 10 percent luxury tax on yachts, private airplanes and expensive automobiles, Sen. Ted Kennedy and then-Senate Majority Leader George Mitchell crowed publicly about how the rich would finally be paying their fair share of taxes. What actually happened is laid out in a Heartland Institute blog post by Edmund Contoski titled “Economically illiterate Obama, re: Corporate Jets” (7/12/2011).

Within eight months after the change in the law took effect, Viking Yachts, the largest U.S. yacht manufacturer, laid off 1,140 of its 1,400 employees and closed one of its two manufacturing plants. Before it was all over, Viking Yachts was down to 68 employees. In the first year, one-third of U.S. yacht-building companies stopped production, and according to a report by the congressional Joint Economic Committee, the industry lost 7,600 jobs. When it was over, 25,000 workers had lost their jobs building yachts, and 75,000 more jobs were lost in companies that supplied yacht parts and material. Ocean Yachts trimmed its workforce from 350 to 50. Egg Harbor Yachts went from 200 employees to five and later filed for bankruptcy. The U.S., which had been a net exporter of yachts, became a net importer as U.S. companies closed. Jobs shifted to companies in Europe and the Bahamas.

The U.S. Treasury collected zero revenue from the sales driven overseas.

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  • http://www.dikaesha.pbwiki.com Foolster41

    It’s Atlas Shrugs coming true! Looter mentality of “social responsibility” (Stealing from the rich to give to the poor, while those opposing economic suicide are called “anti-social”), and policies that destroy industries!

    Of course, this began quite a while ago with the practical nationalization of the auto and health industries (bail outs, big government “helping” run things, socialized medicine rather than free trade).

    I pray we vote out of power these socialist looters before the damage is too great. Otherwise we might see the realization of Wyatt’s torch.

  • alexander

    as usual: Leftist imbeciles hit us with their UNFORSEEN CONSEQUENCES.
    Liberalism IS a mental disorder

  • StephenD

    Mr. Williams, this is a great article! I wish the MSM would take it and run with it. I think you're closer to the truth on Obama knowing this won't work but instead he is counting on envy to feed the class warfare. Listen, the closest I'll get to a yacht or a corporate jet is to see them in a movie but still I have to see that people worked to make them, sell parts for them, maintain them and since they will be bought anyway it may as well be made by Americans!

  • mrbean

    When Obama uses the tax the rich guys in corporate jets mantra it is leftist code words for them "rich white honky crackas" have to pay their fair share (which would be 100% if Chairman Obama had his way)

  • Lisa Richards

    You are right Mr. Williams. I have already stopped spending, as has everyone I know. We Americans did over 20 years-ago despite what Kenendy assumed and we are not spending now. We are holding on to what we have and saving and waiting for 2012