"You to go from port to port in different states without having to officially make entry and pay taxes to the states of the ports you visit."
Education Secretary Betsy DeVos' 165-foot family yacht, which was untethered last month from a dock in Turn, Ohio, is registered in the Grand Cayman Islands.
Maritime lawyers told Capital & Main in an article published Tuesday that the boat probably flies a foreign "flag of convenience" to avoid American sales and use taxes.
"In practice, it means the permit allows you to go from port to port in different states without having to officially make entry and pay taxes to the states of the ports you visit," said maritime attorney Michael T. Moore.
Transportation Secretary Elaine Chao’s family shipping consortium does
DeVos’ yacht, The Seaway, is reportedly worth $40 million and is one of 10 in the fleet of her family, which made its fortune in the Amway multi-level marketing empire. When it was set adrift last month by an unknown person, the boat suffered as much as $10,000 in damages.
Capital & Main pointed out that if the yacht were registered in Michigan, the family would probably need to pay Michigan's 6 percent use tax, which would mean a one-time payment of $2.4 million.
Maritime lawyers told Capital & Main that other potential advantages of registering the yacht offshore include avoiding stricter requirements for corporate financial disclosure, boat inspection, and payroll taxes.
A 2008 Government Accountability Office report found that wealthy Americans “can minimize their US tax obligations by using Cayman Islands entities to defer US taxes on foreign income” and also warned that some conduct “financial activity in the Cayman Islands in an attempt to avoid discovery and prosecution of illegal activity by the United States.”
In addition to yachts, DeVos' family owns four airplanes, two helicopters, and the Orlando Magic basketball team.
A Wall Street Journal investigation of her wealth conducted when she took office revealed the full extent of the family's lavish lifestyle. With an estimated net worth of $1.3 billion, DeVos is the richest member of the Trump administration. The household staff includes specialized assistants for the selection of Christmas presents, packing clothing, booking yacht trips, coordinating meals while traveling, and the strenuous task of oiling doors.
Betsy DeVos, whose Republican agenda included gutting programs geared to support the education of working-class children, was criticized for promoting policies that benefit the already-well-off at the expense of the poor.
DeVos herself has never attended a public school or sent her children to a public school and holds a total of zero higher education degrees.
During her confirmation hearing for Secretary of Education, DeVos faced criticism for citing attacks from “potential grizzlies” as a reason to allow firearms in schools. There have been 11 deaths due to grizzly attacks since 2010.