The 1%ers’ Boats

One of the mega yacht docks in St. Maarten

Of recent there has been a lot of talk concerning the concentration of income and wealth among the top earning 1%.  Most recently President Obama promised to focus on income inequality in his State of the Union address.  For those in the 99% that seldom gets to see that wealth, I say come to St Maarten where it is proudly on display.  St. Maarten is the winter home for many of the world’s mega yachts.

The Martha Ann blocking the channel to St. Maarten

A mega yacht (also known as luxury yacht or super yacht) is defined as a very expensive, privately owned, professionally crewed sailing or motor yacht.  The minimum length to be considered a mega yacht is in the 150 to 160 foot range.  The Martha Ann pictured above is 230 feet in length and features an oversize swim spa on the sports deck.  She was delivered to her owner, Warren E. Halle, a Maryland/Virginia real estate developer in 2008.  She was the third in a series of sister ships all built in Germany by Lürssen for Mr. Halle.  After the law suits were settled, the first in the series sold for 65 million Euros ($87.6 million USD).  So much for the “Buy American” slogan.

Source: SuperYachtFan.com

Professional crew in action

One of the arguments used by the GOP to keep taxes on the wealth at the lowest rate in a generation is that the wealthy are “job creators.”  Billionaire Darwin Deason’s 205-foot yacht, Apogee is a crewed yacht, so I guess you could argue that cutting his taxes has resulted in creating jobs of the 17 crew members (of different nationalities)  and two security guards. 

Crew hanging SXM courtesy flag

After selling MTech in 1988, Mr. Deason immediately founded ACS to provide computer and processing services to clients such as E-ZPass and the federal government’s student loan program.  In relation to a spinoff company of ACS, Deason paid $3.75 million to make allegations that he was dipping into company funds go away and two top executives resigned after ACS was investigated for a backdating-options scandal.  In 2010 Deason sold ACS for $6.4 billion after successfully beating off investors suing him over the hefty premium he had negotiated for his class B shares.

Source: Forbes 5/7/2012

Apogee

The owners of most mega yachts look for ways to offset cost by making the yachts businesses. Both the Martha Ann and Apogee are available for charter.  The weekly rate for the Martha Ann is 600,000 Euros while Apogee is only asking $450,000, but that is “dry.”  Berthing, fuel and tips for the crew will run you another $200,000 per week.  From Motivator’s vantage point it does not seem like good business ventures for the billionaires.  On the three occasions when we have been on a mooring adjacent to Apogee, we have only seen the yacht move once and that was only to spin it around probably so that it does not get sun struck on one side.  There must be some tax dodge that I do not understand.

NSA if you are reading this, please forward to the IRS.

Venus

The 256 foot mega yacht Venus was designed by Philippe Starck (also the designer of A) and built by Feadship in the Netherlands for Apple Computer’s Steve Jobs.  Jobs died in October of 2011, and the yacht was launched a year later after Jobs’s estate paid off the last of the bills.  Construction cost estimates range from 100 million Euros to $250 million USD.   While visiting the local iStore, I asked the salesperson if she was ever invited over for drinks on Venus.  She said she had not, but wished they would at least stop by the store and say she was doing a good job.

Clean machine - noticeable lack of antenna array

“Apple claims to be the largest U.S. corporate taxpayer, but . . . it is also among America’s largest tax avoiders,” said Sen. John McCain (R-Ariz.).  Ouch, even the Republicans are on Apple’s case about avoiding US taxes.  Apple reportedly had $102 billion in off shore accounts in 2012.  That would buy 408 more boats like Venus unless you moved the production to China where labor is much cheaper.  But then you would have those pesky rumors about workers committing suicide rather than work in Apple production facilities.

Flagged in the Cayman Islands

A common practice among the mega yacht crowd is to register (flag) their boats in the Cayman Islands, Marshal Islands, Isle of Man or the British Virgin Islands even though the yachts may never visit those countries.  The Martha Ann, Apogee and Venus are Cayman Islands flagged.  I have to admit that the morass of state boating regulations in the US is a problem, but the goal of the mega yacht owners is ultimately to again avoid US taxes.

Motivator proudly (and probably stupidly) flies the Stars and Stripes.

The Corporate Pledge of Allegiance to America

Our corporation pledges allegiance to

The United States of America. To that end:

We pledge to create more jobs in the

United States than we create outside the

United States, either directly or in our foreign

subsidiaries and subcontractors.

We further pledge that no more than

20 percent of our total labor costs will be

outsourced abroad.  If we have to lay off

American workers at a time when we’re profitable,

we will give those workers severance payments

equal to their weekly wage time the number of

months they’ve worked for us.

We pledge to keep a lid on executive

pay so no executive is paid more than fifty

times the median pay of American workers.

We define “pay” to include salary, bonuses,

health benefits, pension benefits, deferred

salary, stock options, and every other form

of compensation.

We pledge to pay at least 30 percent

of money earned in the United States in taxes

to the United States.  We won’t shift our money to

offshore tax havens, and we won’t use accounting

gimmicks to fake how much we earn.

We pledge not to use our money to

influence elections.

Source: Beyond Outrage, by Robert B. Reich