Honky-tonks, yacht owners do not deserve tax breaks
Lawmakers have been handing out tax breaks to special-interest groups ever since the days of quill pens and parchment paper, and the Texas Legislature is no exception. The current session, however, has seen a strange twist to this phenomenon. Legislators are trying to reduce the tax bills for owners of honky-tonk saloons and expensive yachts, two things rarely mentioned in the same sentence. In this case, however, they share something in common. Neither tax break is justified.
The handout to honky-tonks and dance halls is being sold as a way to protect our state’s “musical heritage.” The owners of these music venues want the Legislature to create a $10 million “music incubator fund” that would be used to subsidize payments for live music, promotions and building upkeep. It would be funded by giving back some of the sales taxes the state collects on alcohol sales at these places.
Promoters claim that the music business is so unprofitable these days that many of these iconic venues are shutting down. Without them, they remind us, we might not have Willie Nelson, Waylon Jennings and Lyle Lovett.
An entirely different clientele would benefit if the House and Senate finalize work on a bill that would cap sales taxes on yachts at $18,750. The problem, as any millionaire will tell you, is that the state’s sales tax rate (8.25% in most places) can add up quickly on the lavish yachts that some big-spenders like to float around in. On a $3 million yacht, the sales taxes would be $228,000! (If that doesn’t make you choke on your caviar, nothing will.)
This bill’s backers point out that other states have given yacht owners similar tax breaks, and if Texas doesn’t join the crowd, our sales of big boats will suffer, and the jobs they create will be reduced.
In both cases, legislators should resist these emotional appeals and let the free market work.
It is unfortunate that venerable places like Threadgill’s in Austin had to close last year. But companies close down — and open up — every day in Texas. State officials should not try to pick winners and losers.
And the kind of people who shell out big money for yachts usually don’t quibble about sales taxes or title fees. If they get this tax break, what about the rich people who buy fancy cars or private airplanes? Should their sales taxes be capped too?
We say no, because our schools and roads need all the tax dollars they can get. Handing out tax breaks to one group or another just encourages the next bunch to ask for theirs. Let’s share the burden equally and pay our fair share, from smoky honky-tonks to gleaming yacht showrooms.