February 22, 2008


Yacht loop hole exposes a lack of character in Government

Last week we editorialized about the California budget deficit and the impact upon education. We talked about the present lack of funding and future firing of thousands of public education teachers and the impact that this would have. We asked the question of what kind of California did our legislatures envision? We stated that this budget deficit and the cuts the legislatures would make would reflect their vision of the state and define their priorities.

It didn’t take long for us to get our answer. As were writing last week’s editorial the state legislatures were cutting millions of dollars from education, $506 million, and cutting Medi-Cal, which serves the poor and elderly. It isn’t lost on us that these cuts will impact the poor and minority communities the hardest.

While the state legislatures acted fast and with little remorse in making these cuts they ran into a wall when it came to closing a Yachting tax loop hole that allowed the rich to avoid paying a state sales tax on their toys.

This is how the yacht loop hole works. If you buy a yacht, RV or airplane you can avoid the California sales and use tax by taking delivery out of state and parking the toy there for 90 days. Oregon doesn’t impose a sales tax, but offers temporary moorings that are popular with rich California boat buyers. The bill that was blocked in the Assembly would have required the plaything to be stashed outside California for at least a year. No new taxes just the wealthy paying their fair share just like you and I.

The money that the state would receive from the sales and use tax would only add up to something like $26 million dollars, but it is not the dollar amount that is important here but the fact the state legislatures didn’t have the character, the guts, to do the right thing. The state legislatures are willing to allow California education to slip down to second class status while the rich get to enjoy life without the burden of sharing in balancing the budget.

As we said it is a question of priorities and we can now all see where the legislature’s priorities lie and it is not with the majority of the State but with the rich. This is government at its worst.

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