(EDITORIAL)

A bill introduced recently in the U.S. House of Representatives has a familiar ring to it. "H.R. 1823: Ending Taxpayer Subsidies for Yachts Act" would change the Internal Revenue Code to "allow the mortgage interest deduction with respect to boats only if the boat is used as the principal residence of the taxpayer." Yes...it's the same bill introduced in 2011, and again in 2013. It died in Congress both times. I guess the sponsors are hoping that "the third time's the charm."

According to current IRS code, interest on loans secured by your main home and a second home is usually deductible. "Home" in either case can be a house, coop, condominium, mobile home, recreational vehicle or boat, as long as the "home" has "sleeping, cooking and toilet facilities."

H.R. 1823 would not eliminate the mortgage deduction for a second home – unless that second home is a boat. RV? No problem. Live "most of the time" on your boat? No problem...in fact, you could have a million dollar house as your "second home" and be able to deduct the mortgage interest on both. The bill has been referred to the House Committee on Ways and Means which will consider it before sending it to the House floor for consideration, according to GovTrack.us.

One can certainly argue the pros and cons of allowing interest deductions on a second home – or a main home for that matter. But why just boats?

“If you can afford a luxury yacht, you can afford to pay the taxes to go along with it, not pass the bill off to middle-class families. Our economy is still on the road to recovery, but the only way to get there is through a fair tax code and smart investments...It’s time for Congress to eliminate frivolous tax loopholes and fix our tax code.” stated Rep. Mike Quigley of Illinois' 5th district in a press release. Rep. Quigley introduced the bill (each of the times it was introduced).

Rep. Raul Ruiz (CA-36) is quoted in the same press release: “Hard working middle class Americans across the country should not have to subsidize luxury yachts” – and from Rep. Pete Aguilar (CA-31): "This is a commonsense bill that closes a tax loophole so that middle-class families no longer subsidize yachts for the ultra-wealthy.”  

Is it common sense to discriminate on boat owners? Is it not the same "frivolous tax loophole" for a million dollar beach house, or a luxury RV? Well, Dr. Ruiz represents the Palm Desert area of California – there's not many boating opportunities there other than the Salton Sea, a 227-foot-below-sea-level lake – but there are lots of RV parks. Not too much boating in the Mr. Aguilar's San Bernardino district, either.

Rep. Quigley's district is in the Chicago area, and includes part of the lakefront. Any of the times he introduced this bill, didn't anyone tell him most "second home" boats are not owned by the ultra-wealthy? Isn't the average cruising boat worth less than a typical "second home" on land?

If you really want to eliminate mortgage/loan interest "loopholes that benefit only the wealthy," why wouldn't you introduce a bill that eliminates the interest deduction for all second homes, or one that institutes a lower deduction cap? Would the National Association of Realtors® pound down your office door?

No need yet for boaters to get the torches and pitchforks together. Bills that make absolutely no sense tend to die on their own...well, usually.