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Yachts, politics and tax evaders

August 25, 2010

The old saying goes, "A boat is a hole in the water into which you pour your money."

Well, it looks like that needs to be changed to, "A boat, especially a big one, is a tax and political liability."

This summer, Italian tax officials have been conducting raids at beaches, yacht clubs and discos across that country as part of a crackdown on tax evaders.

Italy is coping with an estimated 10 billion euros (that $13 billion in U.S. currency) in unpaid taxes this year. Apparently, tax cheats run rampant in Italy, where only 0.2 percent — you read right; zero point two percent — of taxpayers declare income of more than 200,000 euros a year.

However, folks who don't seem to make much money are still living quite large.

So Italy's tax cops have been checking out evidence of conspicuous consumption that requires lots of lira (I know, I know, it's now the euro, but I still like the old currencies and the alliteration), such as that found at marinas, restaurants and resorts along the Italian coast.

Italian fishing boats by dottorpeni flickr commons The owners of fishing boats like these aren't the target of Italian tax officials, but the luxury marinas and resorts along the country's coast are believed to be harboring to tax evaders. (Photo by dottorpeni/Flickr Creative Commons)

"In Capri, we found a person on a luxury yacht who was officially listed as having no assets and in need of welfare," Luigi Magistro of the Italian Revenue Agency's told Bloomberg.

"First he said he didn't know who the boat belonged to, then, after checking, we discovered he led a life of luxury and owned several properties, none of them declared."

Domestic yachting issues: Meanwhile, here in the United States, folks also have been sailing into tax and political trouble.

In her Rich Man, Bad Yacht column last week in the New York Times, Gail Collins reminded us of the large role the yacht Summerwind played in Florida's Democratic primary campaign for a U.S. Senate seat.

By the way, the guy with the big boat lost yesterday.

And, of course, we all remember the political fallout from Sen. John Kerry's (D-Mass.) sales tax issue with the docking of his new luxury vessel.

I've always sort of wanted a nice, decent-sized boat, but in light of all the fuss about yachts, maybe I'll just stick with occasionally renting a canoe.

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It’s over! With October’s extended filing deadline behind us, it is now time to focus on year-end moves to reduce your 2026 tax bill. 

You’ll find ways to do just that on the Tax Tips page (see the More Tax Posts drop-down menu at the top of the blog), as well as the separate tax tip pages for each month, notably October through December. If you’re on the Tax Tips page, you’ll find a monthly list at the end of this column. If you’re on another blog page, you can head straight to the October tips; at the bottom of that tips page you’ll find links to all the other 11 months’ collections of tax advice.

Not to spoil what you’ll find in that tax advice, but it does cover such things as tax deductions for charitable donations, investment moves that could reduce tax due, and ways to max out your tax-favored retirement savings. 

Finally, as the year winds down, things get hectic. There are lots of other things to occupy our time, like the much more fun upcoming holidays. But don’t lose sight of taxes, since timing is key. To be of use, most tax moves must be made by the end of the tax year. That’s Thursday, Dec. 31, which also is the last business day of the year. 

So that you don’t miss that final tax year deadline, also keep an eye on the countdown clock below. It will keep you on top of just how much time is left to make important, tax-saving moves. (Note: I’m in the Central Time Zone, so adjust accordingly for where you live.)

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