Ray Ring

Senior Editor

Last week, California Gov. Arnold Schwarzenegger eliminated funding for a program that “was keeping nearly 5,000 people off the streets … with a smart mix of housing and all the necessary support services.”

So reports LA Times columnist Steve Lopez, who goes on to make a provocative connection:

If the governor was looking for savings, he could have taken his scalpel to an estimated $45-million tax break for purchases of yachts, planes and RVs.

To find out just how the break works, I called a yacht company in Marina del Rey. A sales rep told me I would have to buy the boat outside of California, but there’s a loophole … technically, he said, if I took ownership of the boat three miles off shore, I’d be out of the state.

In other words, if I wanted to buy a $100,000 sailboat, I would sign the contract at the shop in Marina del Rey and then navigate around the tax bite with a little vacation.

“We would effect delivery out of state, three miles out, with a hired skipper who would take you out,” the salesman explained. If I then sailed down to Mexico for 90 days, I’d avoid the sales tax of $8,250.

That’s the cost of helping a mentally ill person for a year, through the program that’s being eliminated, Lopez says.

His column, here, carries the headline:

Lives may founder, but yacht sales will flourish