Ross: Oh no, the capital gains tax could downgrade my yacht purchase

Mar 27, 2023, 7:18 AM | Updated: 9:32 am


A man hoses down the bow of a luxury yacht tied up at the Portland waterfront on Wednesday, August 26, 2020. (Staff Photo by Gregory Rec/Portland Press Herald via Getty Images)

(Staff Photo by Gregory Rec/Portland Press Herald via Getty Images)

Capital gains and the level of pain. It turns out the Washington State Supreme Court had no problem deciding that taxing capital gains is not an income tax.

It was a pretty decisive 7-2 vote. So now we have to decide how worried we should be.

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Speaking only for myself, looking at the numbers, my first reaction was, ‘wouldn’t it be nice to actually be in a position to have to pay this!’

Because it would mean I was in a position to cash in more than $250,000 in capital gains! Which I’m not.

But, suppose I invented the ultimate chatbot – ChatDaveRoss – capable of generating realistic spoken commentaries.

And the value of my ChatDaveRoss stock jumps by $20 million, and suddenly I feel the need to cash that in on the $20 million yacht of my dreams, the “Lady Michelle.”

“The luxury motor yacht Lady Michelle is a very popular and well-performing 55-meter super yacht. A highlight below deck is the split-level owner suite which is situated on the Main Deck and features separate his and hers bathrooms, its own panoramic observation lounge to enjoy views, and a private study. There’s a gym, a salon for guests to gather, and a dedicated dining space for meals inside.”

Unfortunately, under the Washington capital gains tax – once I pay 7% on my gains over $250,000 – I only have $18,600,000. Now, I have to go to the discount yachts.

“Here is a list of private yachts available for under $20 million.”

Aargh! It’s humiliating! I’d have to settle for the Majesty 100.

“The yacht’s unpreserved magnificence can be seen throughout her generous 100-foot or 32-meter length.”

Talk about lipstick on a pig! Now instead of 180 feet, I have to shoehorn my guests into 100 feet?!?!

But I don’t want to go too far in making light of this because, according to our tax whisperer, Ken Williams, he knows of a few wealthy clients who might just say, “enough of this– I’m out.”

“It’s a factor that people look at,” Williams said. “Now there’s less of an incentive to stay in Washington because it’s no longer the tax haven for large portfolios that create a lot of capital gains.”

So the Governor, now that he has his wish, needs to make this state the best incubator in the world for start-ups. For most entrepreneurs, money is a major motivation.

I don’t want to see a flotilla of Washington entrepreneurs sailing for Florida.

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Ross: Oh no, the capital gains tax could downgrade my yacht purchase