If you’re like me, you often find yourself shaking your head over the way things work (and don’t work) in Washington, D.C. The instances of political payback make Capitol Hill seem more like a child’s sandbox than a place where grownups are supposed to tackle real issues. Thankfully, though, there are still people there intent on making a difference. And a smart difference.
Two of those people are Lois Frankel and Ted Yoho. Both are Congresspeople from Florida. Frankel is a Democrat, while Yoho is a Republican. The two joined forces to sponsor a bill that, if it passes, will overturn an 85-year-old law that is so illogical it’s a wonder it still exists.
The law is the Tariff Act of 1930, which raised taxes on tens of thousands of goods imported into the United States. It therefore impacts foreign-flagged yachts marketed for sale in the United States. Under it, the owners of these yachts must pay import duty upon arrival. They also pay based on the yacht’s appraised value, versus the listed price. No potential buyer is even permitted to set foot on the passarelle before the money is paid. An analogy circulating in the yachting industry likens this to offering a house for sale and telling your neighbors and fellow Americans, “Sorry, but you can’t come in until I pay a fee based on the possibility that you may be interested, and based on what the government thinks my house is worth.”
It’s not hard to see why few owners of foreign-flagged yachts want to go through the hassle. It’s the primary reason why dozens of brokerage ads and websites carry the line, “Not for sale to U.S. residents while in U.S. waters.”
Now, laws governing the importation of goods for sale make sense. However, a yacht is not the same as a DVR, or any other item meant to remain stateside in an American’s yard, driveway… you get the picture. In contrast to American law, countries around the world have smarter import policies. Across the entire European Union, for example, the tax on American-flagged yachts is due upon the actual sale itself to a European citizen. That tax is additionally based on the closing price.
As much as our country’s politicians can confound me with their views, Frankel and Yoho “get it,” as the saying goes. Frankel has been particularly supportive of the yachting industry over the years. She’s taken the time to visit shipyards and other businesses. She also sees how foreign-flagged yachts regularly come to refit yards in her home state, cruise the coastline, and pump money back into the local economies. (To put this money into perspective, the owner of one megayacht shared his budget with the U.S. Superyacht Association last year. Between the spending of his crew, his friends, his family, and himself while his yacht is in port, his yacht contributes a weekly average of $100,000.) As Frankel commented in introducing the bill, “yachts are job creators” and the current law is “outdated.”
The bill, H.R.4065, was introduced to the House of Representatives for consideration on November 18. The goal: “to amend the Tariff Act of 1930 to provide for a deferral of the payment of a duty upon the sale of certain used yachts, and for other purposes.” If passed, which may take some time, it will then go to the Senate for a vote. If passed there, the bill lands on the President’s desk for signing into law. (Track the bill on Congress’ website.)
“If” is a pretty big word when it comes to government working properly… but Frankel and Yoho aren’t the only ones in Congress who understand the importance of creating and maintaining jobs. And that is the bottom line.