Two observations.

1. Some people do live in houseboats, and probably have financing arragements equivalent to mortgages on homes. In fact, I met a guy from the Houston area this summer who lives on a houseboat in the gulf. Should he be treated differently than you in deducting "home mortgage interest"?

2. Unintended consequences. Recall if you will (& can) the Luxury tax on yachts costing over $100,000. It was so effective it was repealed in 1993, iirc. It had a mostly negative effect in the boating industry, causing boat builders to go out of business, and increased unemployment
New Luxury Tax Trimming Boat Sales - New York Times

This "luxury tax" also applied to cars costing over....ta da.... that outrageously lavish sum of ...$30,000. That went on the ash heap too... but it smoldered longer before being extinguished.
Inside Politics: A hard-earned lesson

If the interest deduction on 'luxury yachts" is no longer allowed ---> the after tax cost of ownership goes up-----> followed by decreased sales--->lost jobs----> higher unemployment---->.

Besides, do the truly wealthy finance these purchases? These are the real boogey-men, no?

Egg Harbor Yacht's saga...

History of Egg Harbor Yacht Company, Inc

During the 1950's, C.P. Leek purchased the remainder of the company's stock from his partners and merged Egg Harbor with Pacemaker Yachts. By the 1960's, this combined organization had become one of the largest manufacturers of pleasure boats in the country.

Despite being part of Pacemaker Yachts, Inc., Egg Harbor managed to maintain its own identity. While Pacemaker concentrated on manufacturing products for the mid-priced, high volume end of the market, Egg Harbor steadfastly maintained its focus as a limited quantity builder of high quality cruising and sportfishing yachts. Egg Harbor's reputation grew through the 1960's and 1970's, with offerings that ranged in size from 30 to 48 feet. Both companies converted from wood to fiberglass construction during the 1970's.

When it first became fashionable for conglomerates to acquire boat companies, Fuqua Industries purchased Pacemaker Yachts, Inc. (including Egg Harbor) in 1965. Both companies were subsequently sold to Mission Marine & Associates in 1976.

Both Egg Harbor and Pacemaker were profitable business units under their new ownership, however, Mission Marine was a highly leveraged min-conglomerate. The parent company experienced severe financial difficulties when the prime interest rate soared to 20% during 1979. As a result, Mission Marine was forced into Chapter 11 that year.

In 1980, the assets of Egg Harbor Boat Company were purchased by an investor group that included Phil Boyd, Jr. and Donald Leek (both sons of the original founders), Peter and Walt Johnson, Jr. (second generation owners of Johnson & Towers, Inc.) and Robert Traenkle (a Pennsylvania businessman and boating enthusiast).

Phil Boyd retired as President of Egg Harbor during 1983 and Rudy Lehnert, an Aeronautical Engineer and avid sportfisherman, purchased Boyd's stock and joined the company as Vice President of Engineering. At this time, Traenkle became President and James Mercanto, formerly Vice President of Marketing & Sales, became General Manager.


Through the 1980's, Egg Harbor invested heavily in new product development, refreshing and expanding the breadth of its line from 33 to 60 feet.

With steadily increasing sales and profitability, the owners prepared to sell shares in the company through an initial public offering. This plan, however, was aborted when the stock market experienced a severe adjustment on what became known as Black Monday, during mid-October, 1987. In reaction, Robert Traenkle agreed to purchase all shares of Egg Harbor Yacht Company through a structured transaction initiated in 1988.

Under now consolidated ownership, the company launched an aggressive new product development program. This culminated in the Golden Egg Series, introduced early in the 1990 model year, which featured four new cruising/sportfishing models as well as two new Aft Cabin cruising models.

While these products were well accepted by the market, the timing for this investment proved fatal. The market for new boat sales soon plunged as a result of a general economic recession, a new luxury goods tax and cumulative overbuilding by the entire industry.

In spite of Egg Harbor's successful performance during the 1980's, the company was unable to service the relatively high level of debt it had accumulated as a combined result of the stock purchase and its aggressive investment in new product development.

This situation prompted Traenkle's former partners to repossess the company and voluntarily file for protection under Chapter 11 of the Federal Bankruptcy Code, during January 1990........