Local Illinois Congressman introduces bill that may cost marine and real estate industry jobs
5th Congressional Representative Mike Quigley (Sun-Times photo)
May 3, 2011
Fifth Congressional Representative Mike Quigley introduced a bill in Congress earlier today that seeks to end mortage interest income deductions for boats that qualify per the IRS requirements. The move comes as the marine industry has started to see modest improvement in boat sales. The uptick in activity has been led by the Great Lakes region, an area that has been particularly hard hit by the loss of jobs accross many sectors. Illinois has led in job losses, however, it has been one of the first states to show promise in increased boat sales this Spring.
The Mortgage Interest Income deduction has been used by boat owners to buy boats that qualify by having a seperate galley, head and sleeping quarters. Regardless of the size of the boat, it has been a factor that some boat owners have used to justify purchasing their boats. The resultant tax income has helped cities, counties and states through the traditional tax channels. In cities like Chicago and Cook County it has been the one of the few reliefs that boat owners have used to offset the highest retail tax rate in the nation. As home to the largest municipally run harbor system in North America, Chicago has a relatively high number of boaters.
Quigley, representing the Fifth Congressional district (which has origins on the Northside lakefront area and proceeds along the I-90 corridor out to Bensenville, Norwood Park, Elmwood Park and the Northwest side communities of Chicago) was a formerly a Cook County commissioner whose juxtaposition to the hyper taxation antics of former County President Todd Stroger won him popularity among some centrist voters.
"It is surprising that Congressman Quigley who campaigned as a 'fiscal conservative' would propose a bill that stands to impact hundreds of thousands of jobs in the marine industry accross the United States. Much less look to limit the real estate industry which has already been dealt a devastating blow in declining property values, sales and jobs. Removal of the mortgage interest deduction has the potential to quell any comeback of these two industries and can cost thousands of Americans jobs sending two industries spiraling' said Lou Sandoval , co-Owner and Co-Founder of Karma Yacht Sales a sailboat dealer serving Lake Michigan and based on the southside of Chicago. "The bill is very shortsighted: The effect could negatively impact the city of Chicago Harbor system which is currently looking to fill a new marina at 31st street that will house over 800 boats and opens in 2012." said Sandoval. "The revenue from the Harbor system looks to offset many land based programs in the Chicago Park District ".
This bill comes as States like Florida and Texas have made moves to promote the purchase of marine pleasure craft by capping the tax rates on boat purchases, a move that can be seen to stimulate sales and drive taxation revenue by the resultant increase in sales tax volume. Of additional irony is that Rep. Quigley decided to propose this bill during the week of the American Boating Congress (ABC) being held on Capitol Hill May 4-5.
Boaters and property owners in Chicago and especially in Congressman Quigley's district should be encouraged to contact his office and voice their displeasure for his proposal. This is especially important as many congressman including Rep. Quigley ramp up their efforts for re-election in the 2012 cycle. There is NO time better than the present to speak out against this issue
Copyright: Editor Karma Yacht Sales- Docktalk Blog
Information for Contacting Congressman Quigley's Office can be found on this link:
Quigley 5th Congressional
To view the original Press Release
Quigley, Walz, Peters Introduce Bill to End Subsidies for Luxury Yachts
Tuesday, 03 May 2011 13:29
WASHINGTON—Today, U.S. Representative Mike Quigley (IL-05), along with Reps. Tim Walz (MN-1) and Gary Peters (MI-9), introduced legislation to eliminate taxpayer subsidies for yachts. The Ending Taxpayer Subsidies for Yachts Act will amend a tax provision that allows boat owners to write off their mortgage interest payments if they classify their boats as second homes.
“There’s absolutely no reason why taxpayers should subsidize luxury yachts,” said Quigley. “As we work to address our budget challenges, closing this frivolous tax loophole is a no-brainer.”
“We’re going to have to make some hard decisions to tackle our national debt, but this isn’t one of them,” said Walz. “Closing this tax loophole restores the Mortgage Interest Deduction to its original purpose; helping middle class families realize the American Dream through homeownership.”
Currently, taxpayers are allowed to deduct mortgage interest for up to two homes from their tax returns. Yachts equipped with bedding, toilet facilities, and a kitchen qualify even if they aren’t used as a primary residence. The Ending Taxpayer Subsidies for Yachts Act would limit the tax deduction to only those who use their boats as a primary residence.
“We need to get the deficit under control, and that means simplifying the tax code and eliminating special interest tax giveaways like the Yacht Loophole,” added Peters. “Homeownership is part of the American Dream and we should encourage it, but yacht owners don’t need any special handouts, especially in the middle of a budget crisis.”
In 2004, there were approximately 500,000 pleasure boats in the United States large enough to qualify for the tax break, but only around 100,000 people live full time on boats according to the 2000 Census.
The proposal is included in Quigley’s Reinventing Government: The Federal Budget Part II. The report is due out next week and will include detailed cost-saving recommendations to follow up on Part I, which focused on transparency in the budget process.
For More Information Ask Karma Yacht Sales by email or call 1-877-KARMA-Y-S (527-6297)