Congressional Democrats don’t always legislate as though they understand human nature. In fact, legislation in theory often deviates from its practical implementation. Senator John Kerry’s recent attempt to avoid the high boat-use tax rates of the Bay State shows that when a legislative body aims to alleviate its fiscal morass by imposing ever-higher tax rates on its people they often only succeed in producing unintended consequences. Those advocating the expiration of the Bush tax cuts should take note.
Having reportedly spent $7 million on a 76-foot yacht named the Isabel, Senator Kerry (D-MA) did what any normal individual would do when confronted with the choice of where to “officially” berth his newest indulgence. He weighed the costs and benefits of his options. Not surprising, Kerry realized that to berth his yacht within his own state of Massachusetts it would cost significantly more than to do so in neighboring Rhode Island. Having repealed its Boat Sales and Use Tax in 1993, Rhode Island has been a veritable refuge to those boat owners seeking relief from the often high tax rates within their own state. If the Isabel’s price tag is correct, Kerry likely saved nearly $450,000 in sales tax and $70,000 in annual excise taxes by mooring it in Rhode Island instead of Massachusetts.
The problem with Kerry’s tax maneuvering is that he has been a vocal representative of the liberal wing within the Senate that has felt no compunction about repeatedly voting to raise taxes on all segments of society. Policies such as those he has advocated have fostered an atmosphere of oppressive taxation that have driven high-income earners, and small business owners alike, from the most unbearable tax regimes to those that are more hospitable.
All this comes amid the contentious discussion within Capitol Hill over whether or not to allow the Bush tax cuts of 2001 and 2003 to expire. Democratic leadership and the Obama administration argue that allowing for tax rates to increase on income earners of over $250,000 will affect only 2 percent to 3 percent of Americans. Further, they argue that such an increase in taxes will have little affect on the nascent economic recovery. Unfortunately for Democrats they’re wrong, and the senior senator from Massachusetts has demonstrated why.
Many of the individuals who will be adversely affected by the expiration of the Bush tax cuts are those whose wealth creates jobs. Small business owners will have to compensate for the increase in taxation by finding alternative means to cost savings. When businesses are forced to check costs the outcome is often fewer, and lower paying, jobs. This is not a welcome phenomenon for a nation struggling to rein in near double-digit unemployment.
John Kerry demonstrated that when confronted with a difficult choice, human nature will often compel even the most altruistic individual to seek the course most personally advantageous. Businesses and individuals alike will nearly always seek the avenue that affords them the greatest opportunity to maintain, or improve, their current condition. Allowing the Bush tax cuts to expire, on any or all levels of the income-earning spectrum, will only force individuals and businesses to make the difficult choices that could lead to the unintended consequences of fewer jobs and higher unemployment.
Scott G. Erickson is an advocate of conservative, principled solutions to the issues facing America. He has worked to advance conservative priorities through coalition building and is an active participant in myriad organizations seeking to restore the foundational principles of America. A committed public servant, he has worked in the field of law enforcement for the past decade and holds both his B.S. and M.S. in Criminal Justice Studies. He resides in the San Francisco Bay Area.