The 10% "luxury tax" on yachts in 1991 was extremely popular with the American public... And then reality set in.
Boat sales fell over 50%. Thousands of middle-class boat-building workers, sales people, administrative staff and managers lost their jobs. Buildings that had been filled with Amercian workers manufacturing high-quality products were suddenly empty.
What had been a booming US boating industry was decimated. The luxury tax, despite its overhwelming support from the public, did nothing but destroy middle-class jobs.
Adding insult to injury, the luxury tax also resulted in a net loss to the US treasury. In other words, the lost income taxes from the workers and boat businesses plus the cost of unemployment benefits was millions of dollars more than the amount of luxury tax collected.
In 1993 the tax was repealed. But not before the damage had been done. Thousands of middle-class workers had lost their jobs and scores of boating businesses were bankrupt or irreparably damaged.
http://abcnews.go.com/ThisWeek/story?id=132568&page=1
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Does this "tax the rich" escapade sound familiar? It should.
In 1984, with overwhelming public support, Sweden enacted a Financial Trading Tax (FTT). Swedish futures trading volume fell 98%, options trading fell to zero, bond trading fell 70%, and most other marketsâ trading volume fell by at least 50%. A large segment of the Swedish financial industry either left the country or went out of business. Total tax collections (both capital gains and related income taxes) fell dramatically. Those tax losses wiped out all the gains from the FTT. The total FTT taxes collected were only 3% of what the Swedish Finance Ministry had originally projected (a source of considerable embarrassment), and what had been promoted as a way to raise billions in taxes to support social services resulted in a net loss to the Swedish Treasury. The FTT was repealed in 1991. It should be noted that Sweden is a staunch opponent of the EU FTT proposals.
Five other EU countries (Poland, the Czech Republic, the Netherlands, Malta and Denmark) have said they will only support the FTT if itâs imposed world-wide, stating that an EU-only FTT will cause an exodus of capital from European financial centers. Canada, though not an EU member, showed an early interest in supporting the tax. After conducting an extensive study, Canada now opposes the FTT because their analysis showed that it would irreparably damage their financial markets.
Boat sales fell over 50%. Thousands of middle-class boat-building workers, sales people, administrative staff and managers lost their jobs. Buildings that had been filled with Amercian workers manufacturing high-quality products were suddenly empty.
What had been a booming US boating industry was decimated. The luxury tax, despite its overhwelming support from the public, did nothing but destroy middle-class jobs.
Adding insult to injury, the luxury tax also resulted in a net loss to the US treasury. In other words, the lost income taxes from the workers and boat businesses plus the cost of unemployment benefits was millions of dollars more than the amount of luxury tax collected.
In 1993 the tax was repealed. But not before the damage had been done. Thousands of middle-class workers had lost their jobs and scores of boating businesses were bankrupt or irreparably damaged.
http://abcnews.go.com/ThisWeek/story?id=132568&page=1
------
Does this "tax the rich" escapade sound familiar? It should.
In 1984, with overwhelming public support, Sweden enacted a Financial Trading Tax (FTT). Swedish futures trading volume fell 98%, options trading fell to zero, bond trading fell 70%, and most other marketsâ trading volume fell by at least 50%. A large segment of the Swedish financial industry either left the country or went out of business. Total tax collections (both capital gains and related income taxes) fell dramatically. Those tax losses wiped out all the gains from the FTT. The total FTT taxes collected were only 3% of what the Swedish Finance Ministry had originally projected (a source of considerable embarrassment), and what had been promoted as a way to raise billions in taxes to support social services resulted in a net loss to the Swedish Treasury. The FTT was repealed in 1991. It should be noted that Sweden is a staunch opponent of the EU FTT proposals.
Five other EU countries (Poland, the Czech Republic, the Netherlands, Malta and Denmark) have said they will only support the FTT if itâs imposed world-wide, stating that an EU-only FTT will cause an exodus of capital from European financial centers. Canada, though not an EU member, showed an early interest in supporting the tax. After conducting an extensive study, Canada now opposes the FTT because their analysis showed that it would irreparably damage their financial markets.
