Dealer Outlook

Trade Only Dealer Outlook Blog

Industry eyes Washington on fishing and taxes

The House Natural Resources Committee held an oversight hearing Wednesday on the Magnuson-Stevens Fisheries Conservation and Management Act, which is up for reauthorization this year. It’s a law that has caused angst among saltwater anglers and boaters nationwide.

Since its last reauthorization in 2006, Magnuson-Stevens has hurt anglers with fishing closures and other restrictive actions based on unreliable data collection and admittedly bad science. There’s a growing call for Congress to make needed changes in the act before reauthorizing it.

Enter Dr. Patrick J. Sullivan of the National Research Council of the National Academies. He told the committee on Wednesday that he had completed a study entitled “Evaluating the Effectiveness of Fish Stock Rebuilding Plans in the United States.” The bottom line: He found the arbitrary 10-year rebuilding deadlines that were mandated in the 2006 reauthorization failed to be flexible enough to account for uncertainties in scientific data and environmental factors that are outside the control of fishermen and fisheries managers.

Boating and fishing industry and consumer groups have been saying exactly that for years. For example, the Recreational Fishing Alliance has long contended the 10-year deadlines have serious negative impacts on the positive ‘socioeconomic’ benefits of fishing. The National Research Council report backs it up, saying: “The focus on trying to achieve a rebuilding target by a given time places unrealistic demands on the science and forces reliance on forecasts and estimates of biomass-based reference points, which may be very uncertain.”

It went on to label the rigid timelines created by Congress not scientifically sound.

For dealers, especially those selling saltwater fishing boats and wanting to be engaged on this issue, it’s time to contact your member of Congress and say any reauthorization of Magnuson-Stevens must provide flexibility in stock rebuilding plans based on science.

Tax deductions

Congress might have been on vacation until last week but it doesn’t mean nothing was happening, according to MRAA lobbyist Larry Innis.

“Staffs for the House and Senate tax-writing committees have been putting together legislative drafts that may determine the fate of one of boating’s most prized tax benefits: the second-home mortgage interest deduction,” Innis said. “In addition, other key tax deductions, such as property tax write-offs and capital gains exclusions are on the table.”

Committee chairmen, namely Sen. Max Baucus, D-Mont., and Rep. Dave Camp, R-Mich., have promised tax reform and have been evaluating deductions, credits and loopholes in terms of revenue cuts and economic benefits. That includes both primary and secondary home mortgage interest deductions.

On Monday, these two chairmen said a consensus is forming in Washington around a plan to lower tax rates and close loopholes for U.S. corporations. Perhaps. After all, our U.S. corporate rates are the second-highest in the world behind Japan and bringing them down makes sense. But they also said they would not proceed with a rewrite of the corporate code unless they can also overhaul tax laws that affect individuals. And there’s the rub.

The truth is any bill that would significantly reduce individual and corporate tax rates would have to wipe out some major deductions. However, lowering tax rates to, say, the 25 percent level frequently mentioned in political speeches would literally cost trillions of dollars in lost revenues during the next decade and it could only be partially paid for by eliminating or cutting tax deductions. The result, then, would be a soaring deficit.

Moreover, the mortgage interest and property tax deductions are so engrained in our economy that eliminating them, or even significantly reducing them, would cause a shock to the national economy and definitely to the boating economy, maintains Innis. Think tanks in D.C. predict a loss of 1 million jobs by eliminating these two deductions.

So where’s it going? Innis predicts it’s a dead-end road. Even though committee staffs have been told to put together what could be called a major tax reform package and the committee chairs have indicated a willingness to consider such a bill, the politics are far too great for either the House or Senate to pass anything. But we must keep watching.

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