Which Boat

[MedDreamer]

Paul

I'm not looking to get embroiled in this argument again but:

<<These are just logically derived figures - tell me where I am going wrong?

The bottom level entry point in the market would collaspe because many who would have tied out boating will simply not be able to stretch that far and afford it.

I look forward to you explaing where my logic is flawed>>

Any A level Economics student would point out that you are ignoring elasticity.
People do have the ability to make choices about how they spend their money and in a market populated by the relatively wealthy there will be a fair degree of flexibility or "elasticity". I think you took your argument too far by suggesting that boats would become worthless, this is obviously not true.

Mines a pint..........

Martyn



<hr width=100% size=1>Living the dream

 

[Gludy]

"Any A level Economics student would point out that you are ignoring elasticity.
People do have the ability to make choices about how they spend their money and in a market populated by the relatively wealthy there will be a fair degree of flexibility or "elasticity". I think you took your argument too far by suggesting that boats would become worthless, this is obviously not true. "

That is a very flawed understanding of economics.

Well, I managed to do economics to graduate level so I do understand the basics! I also did a post graduate degree thesis that was based on economics.

Elasticity in the supply demand curve is reflected in the fact that as prices rise, demand drops. Choice with sudden price changes goes often leads to substitution - for example water can be substituted with cramics by designing a toilet that uses less water but needs more ceramics bla bla. People spend their money elswhere.

With a sudden price hike of this magnitude in a market, elasticity in the supply demand curve would see the price of boats drop.

The examples I have give are logical. In practice the boats will always be bought at a price because a new buyer will enter the market and snap a cheap boat up , not be able to afford to run it much but have it as a floating caravan until they get tired of it and leave boating!

However the boats will be cheap and prices much lower.

I gave a precise example with two 60k boats. In that case I guess when the expensive fuel boat fell to say half price someone would snap it up because they do not appreciate the full economics of it. They would choose to use it as posers - in fact posing on boats would probably be a growth industry!

What I am trying to say, and meeting some absurd opposition on the way is really very simple:-

1. A price hike of 300% to 400% has not been takien into account in the todays prices for secondhand UK cruising powerboats. To claim it has is to ignore facts that are staring everyone in the face.

2. Such a price hike would seriously lower the price of such boats in the UK and seriously damage the UK power boat industry leaving behind a much smaller industry that had only the rich left to cater for.

3. The hurdle for entry at the bottom end of the market would be too high for many first time buyers who would no longer enter it.

4. Many boaters who now struggle to keep their boat going would lose the battle and be forced to pack in boating.

Thats about it really.

I would also like to add that, I have arranged matters so that I am fairly well protected on this issue. Its just that I hate to see hard working people having their joy removed from them by an act that would not even raise any more tax for the government.

I took issue on this thread over the way a new boat owner was frankly being given bad advice about how the market had already adjusted to a full fuel price hike.

I am no longer surprised at those who do not answer the points and seem all to willing to lay down and take whatever this government throws at them.

On another thread a buyer has just succesfully imported a Bayliner into this country from the USA at a good price. this is not really a cruising boat and it is petrol. he has worked out how many miles he would need to do to pay for the difference in price between diesel and petrol and its a fair few thousand. So he has logically acted within the market place. the fact is that he did the calculation. The fact is that the price was already factored into his boat. The fact is that when anyone comes to try and sell their boat after a 300% to 400% fuel price hike, they can, despite the advice of some on this thread, expect to get a much lower price for it than they would enjoy today.

mines ... a whisky, make it a double!

<hr width=100% size=1>Paul

 

[aswade]

Anecdotal evidence

The state of California has a vehicle (meaning auto/boat/airplane) sales/usage tax of just under 9%. There has been a loophole in the tax that allows one to take delvery of a boat offshore in international waters, keep it in Mexico (to the south) or Oregon (to the north) for 90 days, and avoid the tax. The 90 day exemption was originally intended when the law was enacted in the 1960s not to penalize somebody who had to move to California due to company relocating them etc., and had bought a vehicle in their old home state within 90 days and already paid tax on it in their old state. In practice, it has been used by most boat buyers of boats large enough to make the trip out of state for 90 days to avoid the 9% tax. 9% savings on a $3 million 70' Ferretti is a lot. Even on a smaller, less expensive boat, 9% is significant.

Potential boat buyers have known that the loophole would be closed as of October 1st 2004 since the beginning of the year. Even if you did not read about it, every single boat dealer out here has been telling all potential buyers for at least 2 years that, "They have proposed a law closing the 90 day loophole, so you'd better buy now!" in an effort to get buyers to commit now.

Two of the local dealers for European builders had 55-60' yachts in stock for more than a year. Did any buyers plan ahead and think to buy one of those stock boats before the tax change? No, they sat unsold with large discounts available. Finally, just in the last few weeks, as the tax loophole was about to expire, the dealers sold both boats when they had buyers realize, "Hang on a minute, I'm going to have to pay 9% more for that same boat next month!"

Lesson #1: Many people do not plan ahead and allow for upcoming changes in taxes etc. You'd be amazed at what people can stay in denial about.

In the late 1980s, the U.S. Government passed a luxury tax on cars, boats and planes. Any cars costing above a certain amount, boats costing above $250,000, and planes above a certain amount, would be taxed an additional 10%. The trigger price for the luxury tax increased slightly each year, indexed to inflation. "Tax the wealthy, if you can afford a $70,000 car or a $1 million boat, what's another 10% tax?" the reasoning went.

That luxury tax put umpteen boat builders and supply firms into bankruptcy because sales collapsed, and not just the smaller companies, major well-known names. It took the better part of a decade for the industry to recover after the government realized after the fact that they were collecting far less tax revenue after enacting the luxury tax because of all the lost yacht sales and lost taxes on the accessories, parts, maintenance, service companies etc. (Not to mention all the lost jobs in the industry!)

Lesson #2: It is hard to predict what impact a relatively small change in taxes can have on the boating industry. Do not be surprised if the marine industry in the UK suffers catastrophically after red diesel is abolished.

Just my observations from afar....

Alex


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[aswade]

Luxury tax also impacted car industry...

That luxury tax also cripple sales of luxury European car manufacturers. Take a look at Mercedes, BMW, Porsche etc. sales in the U.S at the time and you will see how drastically they plummeted. That tax played a role in allowing the Japanese to establish their own luxury brands because their cars often just missed being taxed due to lower prices. "The unproven Lexus at $35,000 or the Mercedes at $52,000?" Adding another $5,200 in taxes to the Benz tipped an awful lot of buyers to the Lexus at a time when they were struggling to gain acceptance. 15 years later Lexus not only makes the highest rated cars in the U.S. for build quality, but they still often cost less than the comparable Merc or BMW (despite the massive cost cutting the Euro companies have accomplished) and consequently Lexus is the #1 selling luxury car brand in the U.S. today, outselling Mercedes, BMW and everyone else.

I'd say that's another unintended and unanticipated consequence of an ill-advised 10% luxury tax.

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[Gludy]

Re: Anecdotal evidence

"Lesson #1: Many people do not plan ahead and allow for upcoming changes in taxes etc. You'd be amazed at what people can stay in denial about."

I agree without qualification. Over here I watch engines being upgraded, boats being bought and more all of whom I know are ignoring the pending fuel price hike. They push it out of radar range. This is why the boat prices have not had the price hike factored in. denial is the word.

Basically people use boats to enjoy themselves, they do not want to psend the time worrying about the future .... so its a sort of group denial. Add to this those who supply the food for denial like claiming that boat prices will not drop after the price hike and you have a self fulfilling system ... maybe thats why I upset folks ... I damage the denial circle!!!!

"Lesson #2: It is hard to predict what impact a relatively small change in taxes can have on the boating industry. Do not be surprised if the marine industry in the UK suffers catastrophically after red diesel is abolished."

I have to agree once again - and again without qualification!

Demand is highly elastic and reacts to price changes - the situation is fairly complex with first time buyers entering the bottom of the market allowing others to increase boat size - in fact most do gradually increase boat size ... if not always want a bigger boat.

I know lots of first time boat owners and to a man such a price hike would force them out of the market. I know large boat owners who would move their boats to the Med, or in one case even to the USA.

I know a multi-millionnaire who had a 4 by 4 that he only manage dto get 13 mpg out of and he sold it because he was not willing to pay out for the fuel which he regarded as a wasteful level.

I do not know anyone who would just carry on as before ... but there must be some.

I do not know and do not claim to know exactly what will happen, I do however claim that the UK market will be deeply damaged and I do know that todays boat prices do not have the fuel hike factored into them.

I also know I am shocked by the 'lay down and run over me please' attitude displayed by some boaters!





<hr width=100% size=1>Paul

 

[aswade]

Actual numbers on impact of luxury tax

Price threshold for boats was $100,000, not $250,000. In any case, it was disastrous and a failure. If this does not scare people involved with the marine industry/recreational boating in the UK into taking any action they can to protest, nothing will. I know that it is not completely analogous to a potential increase in diesel prices (even one of 400%) but it is a cautionary tale regarding the nature of how a change in boating costs can decimate the marine business and the unpredictability of a major change in the structure of those costs. Note the commentary on elasticity of demand- this is from a university economics class. The fact that a 10% tax caused sales to plummet 70% would seem to indicate that not only is demand for boats elastic, but that many would be buyers of boats were stretching themselves financially to buy a new boat.

"During the economic slowdown of 1990, the federal government passed a luxury tax (10%) on new boats that cost over $100,000. The luxury tax also applied to airplanes and jewelry purchases above certain prices. It was implemented in 1991. What was the result?  Bad, of course. Since boats are a luxury item (not a necessity), consumers can do without them. In economic terms, the demand for these goods is relatively elastic -- consumers are responsive to a price change.

The luxury tax was implemented and boat prices jumped 10% to the consumer. Sales of luxury boats plummeted  70% as a result of the luxury tax. Sales were down 90% in south Florida, as consumers went to the Bahamas to buy similar boats without the financial penalty. The shipbuilding industry in America lost 19,000 jobs. And thousands more were lost in the retail sales of boats and boating supplies.

The Congressional Budget Office expected to raise $300 million a year as a result of the tax. By the end of 1991, the tax had generated only $30 million. When costs of the taxes (regulating and enforcing the tax, as well as federal unemployment benefits for boat workers), the government actually lost $8 million as a result of the tax. In 1993, during the Clinton Administration, the luxury tax on boats was repealed. Because the demand for luxury boats was so much more elastic than the supply, the brunt of the burden of this consumer tax fell on the producers."
 

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[MedDreamer]

Like I said at the start I am not getting embrioled in this again and I bow to your superior Economic background but really Paul you know that £100K boats wont become worthless.

I think to some extent we are in violent agreement on this anyway, I agree that s/h values of boats will mean some boatowners will catch bad colds (possibly even Bird Flu) but I dont see that that will have the catastrophic effect on the marine industry that you predict


I'll get them in...........

Martyn



<hr width=100% size=1>Living the dream

 

[Gludy]

I am not claiming boats will become worthless so I agree they will not.
What I was pointing out was that with an efficient market, they actually would be worthless. The market , however, is not 100% efficient and so others will step in, as I have already outlined, when the price has dropped a lot.


"I agree that s/h values of boats will mean some boatowners will catch bad colds (possibly even Bird Flu)"

I just say hat will apply to many cruising boats and to those peaple who have struggled hard to keep their hobby going.

"I dont see that that will have the catastrophic effect on the marine industry that you predict "

I say that the cruising power boat industry would be just a rump of its former self within a few years.



<hr width=100% size=1>Paul

 

[Gludy]

Re: Actual numbers on impact of luxury tax

"The fact that a 10% tax caused sales to plummet 70% would seem to indicate that not only is demand for boats elastic, but that many would be buyers of boats were stretching themselves financially to buy a new boat."

Many, many people stretch themselves to buy a boat and demand is highly elastic over here in the UK.

In cars over here you can sell large petrol hungry cars at great discounts - they are bought by folks who do low mileage and factor in the greatly reduced price of the car. Purchasing such a car new means you have to absorb enourmous depreciation over a very short time. Boats tend to keep their value after an intital drop. If they behaved like large cars many could not afford to purchase them new. That may well be the case if we get the full price hike.

Most cruising boaters in my marina own boats worth between £40k and £130k. They do a lot of their own maintainance and devote a lot of love and care towards their boats. They stretch themselves to get into boating. The fuel hike would decimate their boating. They would find it hard to sell their boats to new folks entering boating because the of the barrier of very high running costs. If fuel went to road prices - should I go across the Bristol channel today or should we all go for a week to Spain ... thats almost the same cost for some!



<hr width=100% size=1>Paul

 

[ari]

Re: Actual numbers on impact of luxury tax

Right, here we go again.

Mr. Boater has a Fairline 33 Targa, 1990, worth about £60K.

He does 50 hours a year (about average, look at the hours of most circa 1990 planing boats and 700ish hours is about right).

Now at cruising speeds with twin Volvo AQAD41's it'll use 12 gallons an hour. So to keep the numbers easy we'll say he averages 10GPH over the season (probably less, but hey).

So 50X10 is 500 gallons.

So currently at £1/gall he's spending £500 and to do the same cruising at £4/gall he'll spend £2,000. So its cost him an extra £1,500.

It costs him probably circa £3,000/year to berth it. It costs him £1,000+ to service it, probably another £1,000 to lift, antifoul, anodes etc etc. Then theres all the other odds and sods, petrol to drive to the boat, meals out, berthing in other marinas he visits. He's prbably spending the thick end of £10K a year to run his boat, and thats not including what he's spending on his marine mortgage if he has one, it's an expensive sport!

So if it costs him another £1,500 a year, so what? Is he really going to sell his boat for £30K instead? No.

£40K maybe? Of course not.

At worst if it's really biting that much (unlikely) he'll not go quite so far, and thats it.

For someone who can afford to buy and run a £60K boat, £1,500 is not going to decimate him, sorry. He'll whinge a bit for sure, but he aint going to throw his hands in the air and sell his boat for a huge loss.

Every time fags go up everyone says "Right, thats it, I'm definitely giving this up". And then they don't. And those are often the people who really cannot afford it!

You might get the odd one or two who the increase pushes over the edge and gives up, but their boat will be bought by someone else who'll carry on.

I'm sorry, but this price increase isn't going to change a thing, much less "decimate" the industry.

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[jfm]

Re: confused about the £1 figure

Paul:
Sorry, you may well have sought clarification etc. To be frank, I cannot read posts as long as yours so much of what you say is glossed over and speed read -by me at least. Re your commendably short post to which I'm replying here I can answer fully.

I dont know what level of expected fuel price hike is discounted into the new/2nd hand boat prices right at this moment. Neither does anyone else. From what I can see it looks like somewhere in the range zero to a very small number. But there is one big difference here between our views - you say (I think) that boat prices have not moved therefore the market has failed to discount the price rise yet. In contrast, I say the market has discounted the price rise, but the effect of it on boat prices is small. Two different explanations for the same symptom. No need to argue much on this, just two differnet views.


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[Gludy]

Re: Actual numbers on impact of luxury tax

Ari
Thank you for taking the trouble to work out the effect on a msalll boat, lighr user.

Lets agree with your figures - an extra cost of £1500 p.a.

Your conclusion with a 400% price increase is:-

"I'm sorry, but this price increase isn't going to change a thing, much less "decimate" the industry. "

Before I respond properly to this post could you please confirm that you mean what you say across the width of all shapes and sizes of cruising power boats? That nothing is going to change???????


<hr width=100% size=1>Paul

 

[Gludy]

Re: confused about the £1 figure

"In contrast, I say the market has discounted the price rise, but the effect of it on boat prices is small. Two different explanations for the same symptom. No need to argue much on this, just two differnet views."

In theory, yes it could be either way to get the same result.

OK lets agree that you say the effect of a 400% increase in fuel price on the power boat market will be small. I say it will be large.

However, going back to the root of our disagreement, the advice given to the newbie was that prices have discounted this price hike already and that boat prices will not move down if the goverment announces its going to be a 400% price hike.

I disagree with that. .. the newbie , I would think, knows that now!





<hr width=100% size=1>Paul

 

[KevB]

Re: Actual numbers on impact of luxury tax

Just to qualify what I am about to write...Don't take any notice because I do not have a clue about economics.

But IMHO, When/if the new tax on diesel is announced the brokers will initially do a lot of scare mongering to get people to drop the price of their boats so as to achieve a sale. Over time as less and less new people get into boating due to the increased costs I imagine second hand boat prices will drop fairly significantly (20-30%) to make it more accessible for people to take up motor boating.

I do a lot of cruising (250hrs per year), if prices rose to 50p - 60p per ltr I would probably not change my habits too much except.......... rather than eating out at restaurants when in a marina I would eat more often on the boat - Rather than pay marina prices I would anchor a bit more instead.

I only have x amount of money to spend boating, if the cost of fuel eats more into my x amount other marine related business would suffer i.e. marinas and restaurants.
I would make my boat last rather than consider upgrading (due to the loss I would expect to make when selling)

If the cost of fuel rose to nearer our current road price I would seriously consider giving up boating, having to sell my boat at a greatly reduced price due to the influx of other like minded people's boats on the market and also the lack of new takers to boating. Or, I would consider moving the boat abroad, probably France.

If a huge tax rise in marine diesel takes place I wouldn't expect the Solent to become like a scene from a spaghetti Western with bramble blowing across an empty desert but I do expect the Solent to become a much quieter place.


I can hear the raggies cheering already…../forums/images/icons/smile.gif



<hr width=100% size=1><A target="_blank" HREF=http://static.photobox.co.uk/public/images/45/99/10714599.s.jpg?ch=97&rr=16:00:39>Nirvana</A>

 

[duncan]

Re: Actual numbers on impact of luxury tax

interesting - initial reactiion was the same as your conclusion - he's really paying £200 for his boating so the fuel bit is quite insignificant. However at, on your numbers, £40 an hour for fuel in the future it is still significant.

I still maintain this guy will do the numbers as a result of the price increase and move it to Spain, do the same hours over probably the same number of trips out per year and spend less including airfares!

<hr width=100% size=1>madesco madidum ..../forums/images/icons/smile.gif

 

[jfm]

Re: confused about the £1 figure

Yes you're right, the original poster has got two substantially different answers to the fuel part of his original question. Oh well

It's actually an interesting debate, I mean how much would say 400% rise change people's buying? I know we have differing views, but these are really just hunches, not reasearched ? Mine are anyway.

I was thinking, where we could get research? Road petrol has increase 400% but over a long period, and less elastic demand beciuse people need to drive, so not a good comparable?

Need a luxury/elastic demand item. What about air travel, has that fallen to 25% of what it was a few years ago (I dunno) and if so, what extra % seats are bought each year? Are there any other examples of 400% price changes in non-essential goods/services?

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[Observer]

<blockquote><font size=1>In reply to:</font><hr>

Two boats idential in all respects but one uses four times as much fuel.
Fuel use is just say £1000 p.a. for one and so £4000 p.a. for the other.

Both ask the same price, say £60,000/

Anyone with sense would purchase the one that uses the £1000 p.a. in fuel.

So how much would the second boat have to drop to compensate for the extra £3000 p.a. running cost?

<hr></blockquote>

Paul,

Your financial analysis is incorrect. The price reduction needed is that which, using a yield of 5% (your assumption), would produce an annuity over a defined period of £3000. The answer is £13,250 (5 years) or £23,570 (10 years) (assuming that the fuel costs are incurred evenly on a monthly basis over the period). A £30k price reduction would cover the additional fuel costs for 167 months (nearly 14 years).




<hr width=100% size=1><A target="_blank" HREF=http://aflcharters.co.uk>Dream Dancer</A>

 

[KevB]

Already posted

I think there has already been a "real life" equivalent as posted by Aswad. An increase a lot less than 300-400%!!

"The state of California has a vehicle (meaning auto/boat/airplane) sales/usage tax of just under 9%. There has been a loophole in the tax that allows one to take delvery of a boat offshore in international waters, keep it in Mexico (to the south) or Oregon (to the north) for 90 days, and avoid the tax. The 90 day exemption was originally intended when the law was enacted in the 1960s not to penalize somebody who had to move to California due to company relocating them etc., and had bought a vehicle in their old home state within 90 days and already paid tax on it in their old state. In practice, it has been used by most boat buyers of boats large enough to make the trip out of state for 90 days to avoid the 9% tax. 9% savings on a $3 million 70' Ferretti is a lot. Even on a smaller, less expensive boat, 9% is significant.

Potential boat buyers have known that the loophole would be closed as of October 1st 2004 since the beginning of the year. Even if you did not read about it, every single boat dealer out here has been telling all potential buyers for at least 2 years that, "They have proposed a law closing the 90 day loophole, so you'd better buy now!" in an effort to get buyers to commit now.

Two of the local dealers for European builders had 55-60' yachts in stock for more than a year. Did any buyers plan ahead and think to buy one of those stock boats before the tax change? No, they sat unsold with large discounts available. Finally, just in the last few weeks, as the tax loophole was about to expire, the dealers sold both boats when they had buyers realize, "Hang on a minute, I'm going to have to pay 9% more for that same boat next month!"

Lesson #1: Many people do not plan ahead and allow for upcoming changes in taxes etc. You'd be amazed at what people can stay in denial about.

In the late 1980s, the U.S. Government passed a luxury tax on cars, boats and planes. Any cars costing above a certain amount, boats costing above $250,000, and planes above a certain amount, would be taxed an additional 10%. The trigger price for the luxury tax increased slightly each year, indexed to inflation. "Tax the wealthy, if you can afford a $70,000 car or a $1 million boat, what's another 10% tax?" the reasoning went.

That luxury tax put umpteen boat builders and supply firms into bankruptcy because sales collapsed, and not just the smaller companies, major well-known names. It took the better part of a decade for the industry to recover after the government realized after the fact that they were collecting far less tax revenue after enacting the luxury tax because of all the lost yacht sales and lost taxes on the accessories, parts, maintenance, service companies etc. (Not to mention all the lost jobs in the industry!)

Lesson #2: It is hard to predict what impact a relatively small change in taxes can have on the boating industry. Do not be surprised if the marine industry in the UK suffers catastrophically after red diesel is abolished.

Just my observations from afar....

AlexThe state of California has a vehicle (meaning auto/boat/airplane) sales/usage tax of just under 9%. There has been a loophole in the tax that allows one to take delvery of a boat offshore in international waters, keep it in Mexico (to the south) or Oregon (to the north) for 90 days, and avoid the tax. The 90 day exemption was originally intended when the law was enacted in the 1960s not to penalize somebody who had to move to California due to company relocating them etc., and had bought a vehicle in their old home state within 90 days and already paid tax on it in their old state. In practice, it has been used by most boat buyers of boats large enough to make the trip out of state for 90 days to avoid the 9% tax. 9% savings on a $3 million 70' Ferretti is a lot. Even on a smaller, less expensive boat, 9% is significant.

Potential boat buyers have known that the loophole would be closed as of October 1st 2004 since the beginning of the year. Even if you did not read about it, every single boat dealer out here has been telling all potential buyers for at least 2 years that, "They have proposed a law closing the 90 day loophole, so you'd better buy now!" in an effort to get buyers to commit now.

Two of the local dealers for European builders had 55-60' yachts in stock for more than a year. Did any buyers plan ahead and think to buy one of those stock boats before the tax change? No, they sat unsold with large discounts available. Finally, just in the last few weeks, as the tax loophole was about to expire, the dealers sold both boats when they had buyers realize, "Hang on a minute, I'm going to have to pay 9% more for that same boat next month!"

Lesson #1: Many people do not plan ahead and allow for upcoming changes in taxes etc. You'd be amazed at what people can stay in denial about.

In the late 1980s, the U.S. Government passed a luxury tax on cars, boats and planes. Any cars costing above a certain amount, boats costing above $250,000, and planes above a certain amount, would be taxed an additional 10%. The trigger price for the luxury tax increased slightly each year, indexed to inflation. "Tax the wealthy, if you can afford a $70,000 car or a $1 million boat, what's another 10% tax?" the reasoning went.

That luxury tax put umpteen boat builders and supply firms into bankruptcy because sales collapsed, and not just the smaller companies, major well-known names. It took the better part of a decade for the industry to recover after the government realized after the fact that they were collecting far less tax revenue after enacting the luxury tax because of all the lost yacht sales and lost taxes on the accessories, parts, maintenance, service companies etc. (Not to mention all the lost jobs in the industry!)

Lesson #2: It is hard to predict what impact a relatively small change in taxes can have on the boating industry. Do not be surprised if the marine industry in the UK suffers catastrophically after red diesel is abolished.

Just my observations from afar....

Alex"







<hr width=100% size=1><A target="_blank" HREF=http://static.photobox.co.uk/public/images/45/99/10714599.s.jpg?ch=97&rr=16:00:39>Nirvana</A>

 

[ari]

Re: Actual numbers on impact of luxury tax

I give up. I guess we'll all see the result of this potential armaggedon to the boating industry in a couple of years.

It does however hearten me that common sense seems to be prevailing for the vast majority of forum users.

Y2K bug anyone?

;-D

Signing out of this one.

Ari.

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[Gludy]

Re: Actual numbers on impact of luxury tax

"Don't take any notice because I do not have a clue about economics."

You do not need to know, your observations are amongst the most useful of the posts.

all the points you state are just how many would react.

Up to a cerain point you would in economic terms substitute - you would swop a meal out for extra fuel.

You would reduce the trips ....

You would make the boat last longer - hence brokers, all the industry suffers.


"If the cost of fuel rose to nearer our current road price I would seriously consider giving up boating, having to sell my boat at a greatly reduced price due to the influx of other like minded people's boats on the market and also the lack of new takers to boating. Or, I would consider moving the boat abroad, probably France."

Exactly what any sane, rational person would do facing such a price hike.

"If a huge tax rise in marine diesel takes place I wouldn't expect the Solent to become like a scene from a spaghetti Western with bramble blowing across an empty desert but I do expect the Solent to become a much quieter place."

Exactly.

At the end of the day the governement would be trying to remove a chunk of money out of the industry and spen it elsewhere. If they succeeded they will damage the industry.

However, life is more complex than simply losing a chunk of money, in practice folk drop out the market or go elsehwere, government fails to reach its objective and an industry is ruined.

What others are proposing here is that a 400% price hike will have no effect!!!!

I am told that in economic terms' elastic; means that the market continues on just the same and pays more (that actually is inelastic!!!!) ....... amazing ....

<hr width=100% size=1>Paul