John Kerry Does Something Right

John Kerry is easy to poke fun at. He is a man of modest abilities who has had, apparently from childhood, an outsized sense of entitlement. Even when he was a relatively unknown politician, he was notorious in Boston for demanding privileges and, if balked, asking imperiously, “Do you know who I am?” And he acquired his vast fortune the old-fashioned way: he married it.
Currently, Kerry is under fire for dodging taxes, specifically, Massachusetts’s boat sales and use tax. Kerry bought a $7 million yacht, and he docks it in Rhode Island, which has no similar tax. This saves him an astonishing $500,000. The newspapers are having a field day, and Kerry is on the defensive. Here is Kerry’s yacht, named Isabel, which boasts an “Edwardian-style, glossy varnished teak interior, two VIP main cabins and a pilothouse fitted with a wet bar and cold wine storage”:
As is so often the case, Kerry is easy to ridicule. But in fact, he is doing the right thing by avoiding his home state’s tax. One of the principal advantages of our federal system is that states must compete for residents and for business. Because Rhode Island doesn’t try to charge Kerry a half million dollars up front, its residents will benefit from the opportunity to house and maintain his boat. This episode reminds me of 1990, when the Democratic Congress, eager to show that it was anti-rich people, adopted a ten percent excise tax on luxury yachts. The tax devastated New England’s boat-building industry while generating almost no revenue. An embarrassed Congress soon repealed the tax.
Maybe John Kerry’s rational tax avoidance will embarrass Massachusetts into competing with its neighbors.

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