Remember when Donald Trump said that paying his taxes was foolish? Well, that philosophy seems to be very widespread in his administration.
An article published in Newsweek this past week asked why Betsy DeVos's yacht flew a Cayman island flag.
Like those of other Trump officials, DeVos’s investment portfolio includes Cayman holdings. But as a physical vessel, the yacht is something separate and more tangible, raising a question: Why would an American billionaire’s floating palace moored at a northern Ohio dock be registered in an exotic Caribbean archipelago?
Betsy DeVos did not respond to Capital & Main’s questions about her family’s Cayman-registered yacht; the larger question about foreign yachts was never deeply explored during the 2012 kerfuffle over the foreign flags on Mitt Romney’s boat. Interviews with maritime attorneys suggest it is a scheme that allows wealthy Americans to feign foreign status—and glean the lucrative benefits offered by offshore tax havens.
When buying a vessel or cruising in U.S. waters, American yacht owners like the DeVos family could face state sales or use taxes like those most nonyacht owners face on everything else. However, registering a yacht in a locale like the Caymans—under what has come to be known as a “flag of convenience”—allows those American yacht owners to effectively characterize themselves as foreigners for tax purposes, thereby avoiding the obligation of paying the standard levies.
DeVos’s yacht is reportedly one of 10 in the family’s fleet and is worth $40 million. If the vessel was registered in, say, Grand Rapids, Michigan—the state where RDV is located and that has in the past made an effort to compel yacht owners to pay use taxes—the Seaquest would likely be subject to Michigan’s 6 percent use tax. That would require the DeVos empire to cough up about $2.4 million: public revenues that help finance the kind of police services that the DeVos yacht crew called when the boat was untied. With the Cayman flag fluttering on its deck, the family can avoid the levy even as it cruises the Great Lakes.
That's something, isn't it? Check out the full article here. In the meantime, applaud the hero who once unmoored her yacht.