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Harlan Crow's Yacht Trips with Clarence Thomas Now Prompting Questions Around Possible Tax Scam: Report

By Eric Lutz

Harlan Crow chairman and chief executive officer of Crow Holdings LLC sits for a photograph at the Old Parkland estate...

Harlan Crow ’s lavish gifts to Clarence Thomas have shined an unflattering light on the Supreme Court justice’s disregard for ethics and judicial integrity. But now, they are also beginning to fuel scrutiny around Crow himself, raising questions about the billionaire GOP donor’s tax practices.

According to ProPublica, whose reports on the Crow-Thomas relationship this year have intensified calls for Supreme Court reform, the real estate developer may have used his yacht trips with Thomas to lower his own tax bill—a possible violation of tax laws, experts told the outlet . “Based on what information is available, this has the look of a textbook billionaire tax scam,” Senate Finance Committee Chair Ron Wyden told ProPublica. “These new details only raise more questions about Mr. Crow’s tax practices, which could begin to explain why he’s been stonewalling the Finance Committee’s investigation for months," added Wyden, one of several Democrats looking into Crow’s gifts to Thomas. (Crow declined ProPublica's request for comment, but he and Thomas have each previously denied wrongdoing amid scrutiny over their personal and financial relationship.)

Crow, who has insisted that lawmakers do not have authority to investigate the gifts, reportedly slashed his tax bill by deducting losses from Rochelle Charter—his company that charters the yacht on which he hosted Thomas. But, ProPublica reports, it does not appear that Crow actually chartered the yacht; use of the vessel, the Michaela Rose, was instead apparently “limited to Crow’s family, friends and executives of Crow’s company, along with their guests,” according to the outlet.

Michael D. Bopp , an attorney representing Crow, argued in a June 2 letter to Wyden that “trips involving the Thomases…were paid to the Crow family entities holding or operating those assets.” Crow, in other words, claims he was paying his family company for use of the yacht. But Brian Galle , a former federal tax crimes prosecutor, told ProPublica that the purported arrangement was “absurd” and should be “aggressively audited.”

“Assuming that the uses of the yacht are mostly personal, Crow should not be able to take a deduction,” Galle, a professor at Georgetown University, told the outlet.

The new revelations about Crow—a donor to Ron DeSantis 's presidential campaign—come as Senate Democrats prepare to forge ahead with Supreme Court reform: On Thursday, Dick Durbin and the Senate Judiciary Committee are expected to consider ethics and transparency legislation put forth by Sheldon Whitehouse , a leading critic of the high court . Though it’s likely to pass, Senate Republicans are expected to rally against the bill, which will surely be dead on arrival in the GOP-held House. Still, as Whitehouse told the New York Times , it could mark the “beginning” of the foundation for actual bipartisan action: “You have to start somewhere,” Whitehouse argued. “The more information that comes out about the mischief going on at the Supreme Court, the more inevitable it becomes that they come around to agreeing we have to do something.”

Contributing Editor

Harlan Crow Still Wants You To Take His Word That There's Nothing Fishy About His Relationship With Clarence Thomas

By Molly Jong-Fast

Is the Media Finally Waking Up to a New Kind of Supreme Court Coverage?

By Charlotte Klein

Clarence Thomas Hires Clerk Accused of Writing “I HATE BLACK PEOPLE”

By Jack McCordick

How Harlan Crow slashed his tax bill by taking Clarence Thomas on superyacht cruises

Source images: Chris Goodney/Bloomberg/Getty Images and M.Y. Michaela Rose brochure provided by law firm Locke Lord.

For months, Harlan Crow and members of Congress have been engaged in a fight over whether the billionaire needs to divulge details about his gifts to Supreme Court Justice Clarence Thomas, including globe-trotting trips aboard his 162-foot yacht, the Michaela Rose.

Crow’s lawyer argues that Congress has no authority to probe the GOP donor’s generosity and that doing so violates a constitutional separation of powers between Congress and the Supreme Court.

Members of Congress say there are federal tax laws underlying their interest and a known propensity by the ultrarich to use their yachts to skirt those laws.

Tax data obtained by ProPublica provides a glimpse of what congressional investigators would find if Crow were to open his books to them. Crow’s voyages with Thomas, the data shows, contributed to a nice side benefit: They helped reduce Crow’s tax bill.

The rich, as we’ve reported, often deduct millions of dollars from their taxes related to buying and operating their jets and yachts. Crow followed that formula through a company that purported to charter his superyacht. But a closer examination of how Crow used the yacht raises questions about his compliance with the tax code, experts said. Despite Crow's representations to the IRS, ProPublica reporters could find no evidence that his yacht company was actually a profit-seeking business, as the law requires.

“Based on what information is available, this has the look of a textbook billionaire tax scam,” said Senate Finance Committee chair Ron Wyden, D-Ore . “These new details only raise more questions about Mr. Crow’s tax practices, which could begin to explain why he’s been stonewalling the Finance Committee’s investigation for months.”

Crow, through a spokesperson, declined to respond to ProPublica’s questions.

As ProPublica reported in April, Crow lavished gifts on Thomas for over 20 years, often in the form of luxury trips on Crow’s jet and yacht. One focus of the investigations is whether Crow disclosed his generosity toward Thomas to the IRS, since large gifts are subject to the gift tax. Another is whether Crow treated his trips with Thomas as deductible business expenses. (While the data sheds light on how Crow might have accounted for Thomas’ trips, there are no clear implications for Thomas’ own taxes, experts said.)

Crow’s entry into the world of superyacht owners came nearly 40 years ago. By 1984, his father, Trammell Crow, had forged his real estate fortune, and Harlan, then in his 30s, was taking an increasing role in the family business. That year, father and son worked together to erect the 50-story Trammell Crow Center in downtown Dallas. They also formed a company, Rochelle Charter Inc., with the purpose of leasing out their new yacht, the Michaela Rose.

ProPublica’s trove of IRS data , which contains tax information for thousands of wealthy individuals, includes both Harlan Crow and his parents, who filed jointly. The data shows his parents with a majority share in Rochelle Charter. After they both died, Harlan Crow took full control in 2014.

ProPublica’s data for the company runs from 2003 to 2015. Rochelle Charter reported losing money in 10 of those 13 years. Overall, the net losses totaled nearly $8 million, with about half flowing to Harlan Crow. By using those deductions to offset income from other sources, the Crows saved on taxes. (The wealthy often find ways to deduct the expense of a private jet; the records don’t make it clear whether Crow is doing so.)

For Crow, the tax breaks from his yacht were just one way he was able to achieve a lighter tax burden. The tax code is particularly friendly to commercial real estate titans , and Crow generally enjoyed low taxes during that same period: He paid an average income tax rate of 15%, according to the IRS data. It’s a rate typical of the very wealthiest Americans but lower than the personal federal tax rates of even many middle-income workers .

Crow’s biggest deduction from the Michaela Rose came in 2014, when, after the death of his mother, Crow decided to renovate the yacht. The interior needed updating to fit more contemporary notions of glamour (for one, less gold plating). The work was expensive: Crow’s tax information shows a $1.8 million loss from Rochelle Charter that year.

In order to claim these sorts of deductions, taxpayers must be engaged in a real business, one that’s actually trying to make a profit. If expenses dwarf revenues year after year, the IRS might conclude the activity is more of a hobby. That could lead to the deductions being disallowed, plus penalties. Nevertheless, the ultrawealthy often pass off their costly pastimes, like horse racing , as profit-seeking businesses. In doing so, they essentially dare the IRS to prove otherwise in an audit.

For a yacht owner to meet the legal standard of operating a for-profit business, said Michael Kosnitzky, co-chair of the private client and family office group at the law firm Pillsbury Winthrop, “You have to be regularly chartering the yacht to third parties at fair market value,” typically through an independent charter broker.

ProPublica interviewed around a dozen former crew members of the Michaela Rose, some of whom spent years aboard the ship, and none said they were aware of the boat ever being chartered. ProPublica also reviewed cruising schedules for three different years. According to the former staff and the schedules, use of the vessel appears to have been limited to Crow’s family, friends and executives of Crow’s company, along with their guests.

Moreover, in an attempt to trademark the name of his yacht, Crow struggled to provide evidence that he chartered his ship. In 2019, an attorney representing Rochelle Charter filed an application with the U.S. Patent and Trademark Office for the request. This required demonstrating commercial use of the name Michaela Rose. The attorney, of the law firm Locke Lord, wrote that the name was used for “yacht charter services for entertainment purposes” and as evidence attached a brochure .

“This magnificent yacht has cruised the oceans of the world with a graceful and gentle motion found only on the most superior seagoing vessels,” the pamphlet said, and it went on to extol the vessel’s “fine, seakindly hull” and “mahogany paneled formal dining room” that seats 16. But it said nothing about chartering.

The second page of the four page brochure extolling the Michaela Rose.

“Registration is refused because the specimen does not show the applied-for mark in use in commerce,” the USPTO’s attorney responded .

Crow’s attorney asked the USPTO to reconsider. The brochure was “provided by Applicant directly to its customers and potential customers,” he wrote . Wasn’t that enough?

When USPTO again refused, the attorney provided new evidence: screenshots of the websites superyachts.com and liveyachting.com. These show “links and references to yacht ‘Charter’ services offered in connection with Applicant’s MICHAELA ROSE mark,” the attorney wrote.

At this point, the USPTO agreed to approve the trademark, but the evidence was dubious. Hundreds of ships have profiles on superyachts.com whether they are available to charter or not. The LiveYachting page merely encouraged readers to contact a broker “for finding out if she could be offered for yacht charters.”

“Reviewing the file, it’s not clear to me that the yacht was actually offered for use in commerce in a way that would justify a trademark,” said Neel Sukhatme, a professor at Georgetown Law and visiting scholar with USPTO.

Since April, when the Senate Finance Committee first sent Crow a long list of questions about Thomas’ trips on his jet and yacht, Crow has refused to provide extensive answers. But last month, his attorney, Michael Bopp of the law firm Gibson Dunn, did shed some light on how his chartering business worked: Crow leased from himself. (Gibson Dunn is representing ProPublica pro bono in a case against the U.S. Navy .)

For Crow’s personal use of the Michaela Rose, including trips when the Thomases were guests, “charter rates … were paid to the Crow family entities” that owned the yacht, Bopp wrote in a letter to Wyden. The letter did not specify who, if anyone, paid when Crow’s friends, family or employees used the vessel or how he determined the charter rate. Crow’s spokesperson declined to clarify these details.

According to Bopp, then, whenever Crow used his yacht, Crow (or one of his businesses) would pay his own company, Rochelle Charter, and Rochelle Charter would put that down as revenue. On the other side of the ledger would go the considerable expenses of operating the yacht: maintenance, crew, fuel and other costs. If, at the end of the year, Rochelle Charter’s revenue from chartering exceeded those expenses, Crow would pay tax on that income.

But the taxes of the ultrawealthy often have an up-is-down quality. The clear incentive is to welcome losses, not profits. If, as happened most years for which ProPublica has data, Rochelle Charter’s expenses far exceeded revenue, Crow would save on taxes.

These sorts of arrangements “should be aggressively audited,” said Brian Galle, a professor at Georgetown Law and former federal prosecutor of tax crimes.

“Assuming that the uses of the yacht are mostly personal, Crow should not be able to take a deduction,” he said, calling “absurd” the idea that “the more personal use you get from the yacht, the more deduction you get to claim.”

Crow treated personal trips on his jet in a similar fashion, according to his attorney. Wealthy business owners often derive tax savings from their jets, since business-related flights are fully deductible, and the rich can often find ways to blend business and pleasure , as ProPublica has reported. The company that owns Crow’s jet is not in ProPublica’s data set, so it’s unclear if it reported net losses.

Bopp’s letter describes the standard way that jet owners account for nonbusiness guests: “Reimbursements at rates prescribed by law,” he wrote, were paid to the Crow business that owned his jet. The IRS has a “Standard Industry Fare Level” that jet owners use to calculate the value of a seat aboard a jet for any trip. The amount is roughly equivalent to the cost of a first-class commercial ticket, far below what it would actually cost to charter a jet.

The Senate investigation has also focused on an entirely different tax question: Given that Thomas’ trips on Crow’s jets and yachts could easily be valued in the hundreds of thousands of dollars, did Crow report them to the IRS as taxable gifts?

For each year that Crow gave gifts to someone that exceeded a certain threshold ($17,000 in 2023), he was required to file a gift tax return. That might or might not have resulted in a tax bill for Crow, depending on how much he’d already given to others over the course of his life. (The lifetime limit for total gifts is $12.9 million in 2023.)

But, according to Bopp’s letter , Crow didn’t consider the trips reportable. The gift tax, Bopp wrote, was created to prevent people from avoiding the estate tax by simply giving away assets before death. But Crow still owned his jet and yacht after hosting Thomas. “Value [was] not transferred out of the hosts’ taxable estates,” he argued. Therefore, no gift tax.

Tax experts told ProPublica, on the contrary, that these sorts of luxury trips should be analyzed as gifts.

Beth Kaufman, a partner with Lowenstein Sandler who specializes in estate planning and a veteran of the Treasury Department’s Office of Tax Policy, said she’d counseled clients on the issue. After one couple took their extended family on an exotic vacation, she said, she helped them calculate the reportable costs and file a gift tax return.

However, taxpayers rarely report these sorts of trips, experts said. One important factor is that the IRS has no way of knowing about gifts like these unless they happen to be uncovered in an audit. The agency has also signaled no interest in scrutinizing these kinds of interactions. In fact, experts weren’t aware of any audits related to gifts of this kind.

The result is a situation where, counterintuitively, the gift tax can be easier to avoid the richer the host is.

As explained in a recent paper by two law professors and a private practitioner, everyone agrees that giving $500,000 to a friend would necessitate filing a gift tax return for that amount. Using that $500,000 to buy an all-expense-paid yacht cruise for friends would be treated no differently. But if someone owns a luxury yacht and takes their friends on a cruise, the situation gets muddy. Crow’s attorney even argues there was no gift at all.

That “doesn’t square with fundamental notions of fairness,” said Bridget Crawford, one of the paper’s authors and a professor at Pace Law School.

How to apportion the costs for Crow and his guests is debatable, Crawford said. Crow might argue he would have gone on the cruise without his friends anyway, but at the very least, she said, some portion of the costs of the trip (e.g., the crew and food) should be allocated to his guests.

She and her co-authors urged Congress and the IRS to make it clear these sorts of gifts should be disclosed and provide guidelines for valuing them.

“A lot of these tax rules were developed in an era where there were a few millionaires and the tiniest number of billionaires,” Crawford said, “and now there are many. This is becoming a more visible problem.”

Senate probe zeroes in on Harlan Crow tax deductions for superyacht used for Clarence Thomas vacations

Billionaire Harlan Crow is facing new questions about business tax deductions he took for his superyacht, the Michaela Rose.
Thomas and his wife Ginni Thomas have taken several cruises aboard the ship, including trips around Indonesia and New Zealand.
Senate Finance Committee investigators are probing Crow's financial and personal ties to Supreme Court Justice Clarence Thomas.

WASHINGTON — Billionaire real estate executive Harlan Crow's super yacht was registered with U.S. and British maritime authorities as a pleasure vessel -- and not commercial -- during years when Crow also reported to the IRS that the mega yacht was a money-losing business venture, documents obtained by CNBC reveal.

How Crow uses his 160 foot yacht has drawn the attention of Senate Finance Committee investigators, who are probing Crow's financial and personal ties to Supreme Court Justice Clarence Thomas .

Thomas and his wife Ginni Thomas have taken several cruises aboard the ship, the Michaela Rose, including trips around Indonesia and New Zealand . Thomas did not report the lavish trips as gifts on his government disclosure forms, saying he considered them to be personal travel with friends.

On Tuesday, Senate Finance Committee chairman Ron Wyden (D-Ore.) sent a 12-page letter to Crow's attorney, detailing new evidence that he said, "raises serious concerns regarding the tax treatment of Mr. Crow's luxury assets, including tax deductions related to the personal recreational use of his superyacht for his benefit and that of his wealthy and powerful friends."

Tax records obtained by ProPublica show that the Crow family took millions of dollars worth of business tax deductions on the yacht between 2003 and 2015, through a company they reported to the IRS as an active yacht chartering business.

Rochelle Charter, Inc., which was formed by the Crow family to lease out the yacht, reported tax-deductible business losses in 10 of the 13 years for which ProPublic has records.

In order for business losses to be deducted from federal income taxes, a company must be engaged in an actual business with paying customers.

In his letter to Crow, Wyden wrote, "I fail to see how it is appropriate for a taxpayer to assert to the Internal Revenue Service that a superyacht with registrations indicating it is not engaged in trade can generate losses from purported for-profit yacht charter services."

Asked by CNBC Monday to comment on the deductions, including whether there is evidence that the Michaela Rose has ever chartered the yacht or registered it as a commercial vessel, a spokesman for the office of Harlan Crow responded with a statement.

"Mr. Crow engages professional accounting firms to prepare his tax returns and complies with tax law in good faith. Any suggestion to the contrary is baseless and defamatory," said the spokesman.

"This politically motivated fishing expedition is not based on any legitimate legislative effort. Congressional Committees are neither tax auditors nor law enforcement officers," the spokesman said. "The targeting of a private citizen for political purposes is highly inappropriate and unconstitutional and sets a dangerous precedent."

The Michaela Rose sails under a British flag. But it is not registered as a commercial charter vessel in the U.K.

"The Michaela Rose is registered solely as a Pleasure vessel under Part 1 of the UK Ship Register," a spokesman for the UK's Maritime and Coastguard Agency told CNBC.

British merchant shipping regulations state, "Pleasure vessels are vessels used for sport or recreational purposes and do not operate for financial gain."

It's a similar picture in the United States. Here, the Michaela Rose is registered as a "pleasure boat" and not as a commercial vessel, according to US government documents reviewed by CNBC.

Moreover, the Michaela Rose has not received a certificate of documentation that would permit her to engage in coastal trade in the United States, such as offering commercial charter boat trips, a US Coast Guard official told the Senate Finance Committee.

Without registering as a commercial vessel or obtaining certificates and waivers to allow the ship to engage in trade, it is unclear how the Michaela Rose carried out the commercial chartering business that would be necessary if the vessel were going to qualify for the tax deductions taken by Crow's company.

"Any effort to mischaracterize a yacht used as a pleasure craft as a business is a run of the mill tax scam, plain and simple," wrote Wyden.

An attorney for Crow did not respond to a request by CNBC to provide evidence that Crow has ever rented out the yacht, or that he registered it as a commercial vessel in any jurisdiction.

Crow renovated the yacht after the death of his mother in 2014, updating the interior to a more contemporary style. According to ProPublica, Crow's tax information for that year showed a $1.8 million loss from the company that operates the yacht, Rochelle Charter.

Clarence Thomas, associate justice of the U.S. Supreme Court, listens during a ceremony on the South Lawn of the White House in Washington, D.C., U.S., on Monday, Oct. 26, 2020.

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Harlan Crow's jaunts on his yacht with Justice Clarence Thomas were a 'textbook billionaire tax scam,' Sen. Ron Wyden tells ProPublica

Oops! Something went wrong. Please try again later. More content below

Justice Clarence Thomas and GOP megadonor Harlan Crow's yacht trips have come under scrutiny again.

Per ProPublica , Crow registered his yacht as a charter vessel but only took close friends on trips.

As a result, he could pay his own company, report losses, and save on his tax bill, per ProPublica.

Billionaire GOP donor Harlan Crow's lavish yacht trips with Supreme Court Justice Clarence Thomas may have been facilitated by questionable tax practices, according to a new report.

Crow's relationship with Thomas has been scrutinized since ProPublica reported that Crow funded years of vacations for Thomas, who failed to disclose the outings . Some of those were trips aboard Crow's yacht, the Michaela Rose, and were organized through Rochelle Charter, a company registered to charter the yacht.

But the trips on the yacht — registered as a charter vessel — were actually limited to Crow's inner circle, according to ProPublica . Crow paid his own company for private trips on the yacht and was able to secure tax breaks and lower his tax bill, according to tax data from 2003 through 2015 reviewed by ProPublica.

Tax experts and politicians who spoke to the outlet said that such a practice could amount to gaming the system and should be audited.

"Based on what information is available, this has the look of a textbook billionaire tax scam," Senate Finance Committee Chair Ron Wyden told ProPublica.

A representative for Crow did not immediately respond to Insider's request for comment.

But it points out that Crow recorded $8 million in losses for the family company Rochelle Charter, saving on taxes as a result between 2003 and 2015. The megadonor purported to charter the boat for profit and instead took friends like Thomas for cruises, per the report.

Thomas did not immediately respond to Insider's request for comment.

In April, Crow and Thomas first faced scrutiny related to the 20 years worth of undisclosed trips Crow is accused of gifting to Thomas, per ProPublica. The outlet later reported that Crow purchased Thomas' mother's house and allowed her to live there without paying rent.

In response, Thomas — who asked for an extension to file his financial disclosure forms this year — said that at the time he wasn't aware that he was meant to disclose the trips with Crow.

Crow claimed to the Dallas Morning News that the revelations about his relationship with Thomas were a "political hit job."

Congress has probed Crow's and Thomas's relationship, asking for a detailed disclosure of the gifts that Crow has bestowed to Supreme Court justices.

As it stands, a group of judges, the Committee on Financial Disclosure, is investigating Thomas and disclosure rules , while Senate Democrats have mounted a separate attempt to investigate Thomas and other justices.

Read the original article on Business Insider

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How Harlan Crow Slashed His Tax Bill by Taking Clarence Thomas on Superyacht Cruises

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Paul Kiel covers business and consumer finance for ProPublica.

In recent years, he’s focused on the U.S. tax system. The Secret IRS Files , which involved a team of ProPublica reporters, revealed key ways the ultrawealthy avoid taxes. Before that, he worked on The TurboTax Trap and Gutting the IRS investigations.

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Paul Krugman

Inequality ahoy on the meaning of the superyacht..

By Paul Krugman

Opinion Columnist

Recently ProPublica , a nonprofit, independent newsroom that has partnered with The New York Times on occasion, released a remarkable report about the relationship between Justice Clarence Thomas of the Supreme Court and the conservative billionaire Harlan Crow. It turns out that over the years Thomas, who has portrayed himself as a man of modest tastes who likes to hang out in Walmart parking lots , has taken many lavish — and previously undisclosed — vacations at Crow’s expense. The ethical questions seem obvious.

Still, The Wall Street Journal lashed out at ProPublica, with an editorial headlined “The Smearing of Clarence Thomas.” The article accused ProPublica of using loaded language to create the appearance of a scandal. For example, the paper complained, ProPublica’s report called Crow’s 162-foot private boat, which has been featured in places like the website Superyacht Fan , a “superyacht.” Smear tactics!

Actually, according to a 2022 article in The New Yorker, any yacht over 98 feet long is considered a superyacht within the yachting community .

Which got me thinking about big yachts and what they tell us about the state of society.

When rich people can afford to buy and operate big yachts, they do. Indeed, yachts are a highly visible indicator of inequality, the concentration of income and wealth in the hands of the few. The Gilded Age was marked by a proliferation of ever bigger, ever more elaborately furnished yachts; when J.P. Morgan built a large steam yacht, its 1898 launch was featured in The New York Times.

Conversely, the Great Compression of income disparities that took place during the 1940s and made America a relatively middle-class society for the next four decades put an end to the first golden era of superyachts. In 1955 Fortune published a remarkable essay , “How Top Executives Live,” which stressed how modest their standard of living had become compared with prewar norms. Among other things, large yachts had “foundered in the sea of progressive taxation. … Today, 75 feet is considered a lot of yacht.”

Now superyachts are back. Indeed, according to that New Yorker article, we’re living through “the greatest boom in the yacht business that has ever existed.”

I’ve spent a lot of time over the years following debates over income and wealth inequality. Ever since inequality began rising in the 1980s, there’s been a sort of intellectual industry devoted to what one might call inequality denial, questioning the data showing a drastic rise in incomes and wealth at the top. Indeed, measuring things at the top can be technically tricky — the very rich are such a small group that they can be missed by random surveys, and their ability to engage in tax avoidance makes it hard to track them with tax data, too.

But if you had any doubts about whether we’re living in an era of extreme wealth concentration, comparable to or even surpassing the Gilded Age, the superyacht boom should quell those doubts.

The rise of superyachts also tells us some important things about the motivations and consequences of spending by the very rich.

First, why do the rich buy superyachts?

Boating — being out on the open water, experiencing nature up close — can be a source of great joy to many people. (Not me — I’m so prone to seasickness that I’ve been known to return my breakfast to the ecosystem while snorkeling.) But really big yachts, which amount to floating mansions, would seem to defeat the purpose, insulating their passengers from much of the maritime experience.

Indeed, that 1955 Fortune article suggested that top executives were just as satisfied with the downsized vessels of their day as a previous generation had been with huge yachts. “The specifications of the boat that interests the great majority of seagoing executives today are ‘forty feet, four people, $40,000.’ In this tidy vessel the businessman of 1955 is quite happily sea-borne.” (For the record, $40,000 in 1955 would be about $450,000 in 2022 dollars .)

Owning and operating a really big yacht is, however, as clear an example as you’re likely to find of Thorstein Veblen’s theory of conspicuous consumption — spending intended to demonstrate one’s wealth and status, rather than for the direct satisfaction it yields. Indeed, the New Yorker article suggests that demand for superyachts really took off once owning your own plane stopped being an effective status symbol: “Once it seemed that every plutocrat had a plane, the thrill was gone.”

Yachts, however, can always be made bigger, so there’s no obvious limit to the game. The status competition isn’t even purely implicit: Every year Boat International hands out the World Superyacht Awards , which supposedly honor “ingenuity and craftsmanship” — but obviously, size also matters.

In a way, it’s quite sad: Rarely in the course of modern history has so much wealth been concentrated in the hands of so few, yet much of that wealth is being expended on zero-sum games of one-upsmanship.

The other point, emphasized in a guest essay this week in The Times, is that superyachts are immensely destructive to the environment. To be fair, it’s not entirely obvious whether billionaires do more environmental damage with their superyachts than they would if they spent the same amount of money in other ways. But it’s possible: Shipping and aviation — presumably including superyachts and private planes — are notoriously hard to decarbonize .

And in general, while I’m not a degrowther who believes that we must shrink the economy to save the planet, curbing extravagant and destructive spending by the very rich could be part of the solution to climate change.

In any case, the rise of superyachts — regardless of whether they carry Supreme Court justices — is a highly visible indicator of the extreme economic polarization that is certainly a factor in the extreme political polarization that is tearing our democracy apart. And if you’re the kind of person who insists that calling superyachts by their name is somehow a vile smear, you’re part of the problem.

The statistical problem of the “ missing rich .”

Yachts on the run .

Newport, famous for its Gilded Age mansions, was also a big center for yachting .

New York’s “ good buildings .”

Facing the Music

I thought of Larkin Poe because they did a lovely cover of “Southern Cross” by Crosby, Stills and Nash. But I’m featuring this Son House cover because I was actually in the audience.

Paul Krugman has been an Opinion columnist since 2000 and is also a distinguished professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @ PaulKrugman

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How Harlan Crow slashed his tax bill by taking Clarence Thomas on superyacht cruises

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Crow’s lawyer argues that Congress has no authority to probe the GOP donor’s generosity and that doing so violates a constitutional separation of powers between Congress and the Supreme Court.

Members of Congress say there are federal tax laws underlying their interest and a known propensity by the ultrarich to use their yachts to skirt those laws.

The rich, as we’ve reported, often deduct millions of dollars from their taxes related to buying and operating their jets and yachts. Crow followed that formula through a company that purported to charter his superyacht. But a closer examination of how Crow used the yacht raises questions about his compliance with the tax code, experts said. Despite Crow’s representations to the IRS, ProPublica reporters could find no evidence that his yacht company was actually a profit-seeking business, as the law requires.