Correct Craft CEO Discusses Proposed Canadian Luxury Boat Tax

Correct Craft CEO Bil Yeargin Goes On Podcast To Discuss The Canadian Luxury Boat Tax

Correct Craft CEO Bill Yeargin appeared on the BOAT BOSS podcast to discuss the proposed Canadian luxury boat tax. During the interview, Yeargin shared the story of previously implemented luxury taxes around the world, why they don’t work, and why they hurt both workers who build boats and small business owners who sell them and maintain them.

Yeargin said: “The lessons learned from previous luxury taxes are clear; many countries have implemented them and each time they fail and are repealed. In the United States we tried that in the early 1990s and thousands of jobs were lost. The U.S. luxury tax actually created a revenue shortfall for the federal government, so it was quickly repealed.”

Yeargin added: “The proposed Canadian luxury tax will clearly have a negative effect, hurting Canadian small businesses the most. I hope people will help us share the lessons of the past, so we don’t have to repeat them. »

Click here to listen.

An economic analysis, An economic assessment of the luxury boat tax project, led by Jack Mintz, Ph.D., at the University of Calgary’s School of Public Policy, in collaboration with Fred O’Riordan of EY Canada, concludes that Canada’s proposed “luxury tax” on new boats will generate little revenue while threatening middle-class jobs across the country. The economic analysis reveals that the luxury tax would result in a minimum decrease of C$90 million in revenue for boat dealers and potential job losses for 900 full-time equivalent (FTE) employees.

The Canadian government announced in last spring’s budget that it plans to introduce a tax on certain items, including new boats over C$250,000, starting in 2022 (the government has yet to table bill to confirm the effective date of the tax). While the original proposal was to tax all boats above CA$100,000, NMMA’s strong and sustained advocacy over the past two years has pressured the government to raise the threshold to CA$250,000. $.

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“This report confirms what we know to be true: the proposed luxury tax is economically destructive to Canadian businesses and a self-defeating policy that will hurt middle-class workers,” said NMMA Canada President Sara Anghel. “NMMA urges the Canadian government to correct the course of this misguided tax as part of the federal budget. We cannot afford to jeopardize our fragile economic recovery by decimating our national industry and jeopardizing thousands of good jobs at a time when we need them most.

The study’s author, Dr. Jack Mintz, writes in a recent Financial item editorial:

“Using a conservative measure of sales impact, we estimated a $29 million gain in revenue from yacht taxation – but with a loss of 900 jobs and $90 million in sales. And that may be an underestimate as some research suggests the sensitivity of yacht demand to taxation may be higher than we thought.Our conclusion was that the tax on luxury yachts would generate little revenue and would largely return middle-income workers who would no longer maintain or build high-end boats in Canada.

In 1991, the United States Congress passed a 10% luxury tax on all new boats sold in the United States that cost more than $100,000. In the first quarter of the year, sales of new boats over $100,000 plummeted 89%, leading to massive job losses and multiple bankruptcies and factory closures.

Earnest A. Martinez