Stake to the heart for SUV's
 

http://abcnews.go.com/Business/story?id=3326593&page=1&CMP=OTC-RSSFeeds0312

come one this better pass!!!

fav quote from the article

here is my favorite quote: He predicts that the provision will give back to the government about $750 million over five years,
This politician assumes the money was the governments to begin with and given to the business owner in the form of a tax break. What party is he in?:rolleyes:

Does that rule apply to new vehicles only? Do pickups fall into the same category?

I think so.

I knew someone who owned a small business, in Central California, an autobody shop, who, when he heard about this, ran right out and bought a new Lincoln Aviator SUV that he didn't really need. He let me try it out, and it was pretty nice, for what it was. I have to admit that.

Unexpected manna from heaven for him, and why not? He was able to write the whole thing off.

Everyone else, though, hands around your ankles, as usual.

I always love that statement. By such logic.........."writing it off".........business owners should purchase just about every piece of capital equipment that they could possibly find.

Do they realize that they still pay 60% of the bill.........??

Keep up such behavior.........purchasing depreciating assets in a heavy handed way...........and you'll surely be bankrupt.

Yet another good reason to toss out the broken income tax code.

There's a better way:
http://www.fairtax.org

Sheesh I'm sounding like a broken record.

A few points:

(1) He's a dumbass who blew $50k on a truck just so he could get a write-off? Does he know what a write-off is? Has this idiot ever heard of getting whacked by depreciation on a new truck?
(2) You don't get to decide who "needs" what - technically, you don't "need" a 1991 560SEC that sucks down all of "our" gas (irony, intended).
(3) This loophole has been around since the 80s, and the Congress recently made it so that the deduction could be taken in one year rather than over five years. This loophole will not be going away soon.

I think it was also changed to one year for machine tools as well.

i hope this bill passes.

too many hummers and escalades polluting the roads in so cal.

Lets do the math here. $750MM bucks translates to 30,000 vehicles over 5 years. 6,000 per year. Do they actually sell that many (and remember-this is only business sales)? Plus the H3 does not qualify since it is too light. So do they sell 6,000 H1 and h2's to businesses per year that are doing it to scam taxes?

How many BUSINESSES will run out and buy a Hummer as a business vehicle, if it didn't do the task of the business? Thats stupid. If it can be used by the business, then it is a legitimate tax deduction. I imagine there are those out there doing this, but my guess it is a minority, and the repeal of the tax is just a P.R. act for some politician.

My Mercedes is my business vehical and a write off. I can get away with writing off quite a lot.:D:cool:

The owner wants a SUV, and gets a healthy tax break for buying a more expensive one.

Who would buy a 40K car if you can buy a 60K SUV and get 25K off?

That only works if it is a direct tax CREDIT. If it is a deduction, then it depends on your tax bracket how much you actually save in taxes. So you spend an extra 20k to get a 25k deduction. Assume 30% thats 6-7k of tax savings. Not very smart.

If I get a tax deduction, it's getting well over 30% off. Probably more like 40%. That would definitely influence my purchasing decision.

I'd have to work it out on paper. No way I'm spending $1 to save .60 cents.

How would the write off compare to like a base Suburban, vs a loaded Escalade?

I hate that word, loophole. Congress wrote the law to allow for the deduction and that's not a loophole. When the legeslature writes a new law and doesn't include some provision, that's not a loophole.

I would like to see Congress write laws that apply equally to everyone as the 14th amendment says they should. The tax code could the reduced to a few pages. No more 'targeted tax cuts'.

The tax credit isn't just for Hummers, it's for any vehicle over 6000#. They have just nicknamed it the Hummer bill.

Unless you wanted to buy something anyway. Then it's saving .40 on the dollar if you make the "right" choice.

Bing! You win the economics prize. Most people don't know what a deduction/write-off is in the first place. As a business owner, I can tell you that only morons (whether business-owners or not) go out to buy a Hummer or the like just so they can get the deduction. It's stupid economics.

What you SUV haters want to limit is the mom who buys a Hummer to drive her kids around. And to you, I say - mind your own business. When it becomes uneconomical for her to drive it, she'll sell it at a major loss. Until then, no one tells you what you can drive, therefore...

X3

Maybe, maybe not. Maybe they will use it as their personal car and also get themselves into a lower bracket via a business loss. Anyways, stupid business owners don't stay in business long unless they wise up so it will be "survival of the fittest" again.

She'll sell it at a major loss and I will pick it up then for a song if I can do something with it. Why not? Works for me. Found out later that my Excursion was bought by someone who found out that they didn't like the 7.3 diesel and wanted something more economical like the 6.0 diesel. Well, we both know that upgrading will save you some fuel but it won't pay for you to switch since the cost of the new vehicle is more than what you will save. Since she wanted to sell and didn't know much about vehicles, good for me, bad for her.

The smart way to address this issue is to leave the credit in place, but to limit it to those who operate a business that falls under a specific listing of NAICS codes. I really don't have a problem with a farmer receiving a tax break on an F-350, but I don't really see a compelling reason for my insurance agent to receive a tax break on his Yukon XL Denali.

Smarter way is to have the govt leave it alone. The more they do, the worse things get. Therefore, I would rather vote for someone who has more modest aims than someone who says that they will do all these things once they get into office.

Who cares what break some other stoke gets if he springs for a highly depreciating vehicle? More power to them. The only ones who are going to get hurt by this is the long suffering small farmer.....

that's it I'm moving to Cuba.

Don't tell Ernesto..........:eek:

All of these tax breaks distort rational economic decisionmaking, since the government is stepping in and handing out candy to people it thinks are the "right" people doing the "right" things.

Why should the federal government be giving a tax break to ANYONE based on what vehicle they drive?

Besides, I think that it is fundamentally offensive to use the tax code as a cheap-and-dirty source of social engineering (and political payola to the Detroit automakers, in this case).

-- Bokonon

.........so that they can influence the move to smaller vehicles and reduce gasoline consumption..........:confused:

.........or not..........

Okay. But I am enough of a fiscal conservative and libertarian that I don't think the government ought to be boosting car choices with tax breaks. Particularly perverse tax breaks that favor (and subsidize) consumption.

To paraphrase Barry Goldwater, a government that hands out tax benefits based on the type of car you drive won't be shy about TELLING you what kind of car you can drive.

I hear the leather there is high quality and low priced!

Tom W

I respect your position on this issue.

But, consider that the U.S. wastes millions of gallons of gasoline for no good reason other than to shuttle one 150 lb. a-hole to and from his job in a 6,000 lb. behemoth. It's wanton waste of a precious resource. If the resource costs $10.00 per gallon, which it will eventually cost in the not too distant future, the $hitboxes would evaporate.

I'd simply prefer if the government caused it to happen sooner..........and maintained a stable oil price for other more important uses of the fuel.............uses that are vital to the economy..........and would cause crippling shortages if the price climbs to $10.00.

Why? Since Ernesto was from Cuba, he might be able to suggest some hot spots. :D

Understand this. The govt starts out with a nice idea. In the end, it becomes something perverted. Look at every bill out there. Starts out with a nice simple idea and later gets tacked with all sorts of pork. Say we have a bill to give schools 200 mil. Sound good so far? Well, they tack all sorts of stuff on it. Now it becomes a hostage situation. Either vote for it or against it. If you vote against, you become the scumbag that didn't want to spend on schools for kids.

Not sure it will make a significant difference to Detroit.

Which is why you really don't want the government doing anything because they just screw stuff up; let the market work it out. When and if oil is ever depleted, mankind will come up with another solution as a means of propulsion.

Hence, I have always said that giving the govt a mandate to do something and thus a reason to hit us in the wallet is like giving the crack addict keys to the pharmacy. Both bad ideas. However, it seems like we don't learn from the supernatural themes of movies. The kids summon the devil to do their bidding and they are surprised when the devil comes for his dues which are far more than if the kids had done the work themselves. I prefer a govt that does only the bare necessary stuff.

Whistle, whistle.....:D ... so is the competition! High quality, low price....;)

Best and cheapest would be in Argentina

I wonder how many are leased?

Well their is a gas guzzler tax. Its just on $250k Ferrari's that get driven like 3k miles a year.:rolleyes:

Thats just a petty tax the rich ploy.

I think that tax is on any car that does not get at least 20 mpg combined...

When I looked at the S63 AMG V-12 BiTurbo it had some extra fees in the window sticker.. one was Gas Guzzler Tax.. and this one was listed for IIRC 125k

and comes with a humidor filled with Romeo and Julietta's.....

A lot.

So who get's the tax credit? If you live in Virginia we have that personal property tax you have to pay every year based on the value of your automobile. Mine last year was 12.00. Stickin it to the man- drive older cars...

No one! There is NO tax C-R-E-D-I-T (meaning money from the Treasury). Brian and a few others have already spelled out the difference between a credit and a deduction.

All this SUV and light truck 25,000 issue is about is the TIMING of the depreciation deductions in general and the interplay of Sec. 179 in particular.

Congress' favorite pastime is to play with the Internal Revenue Code. Sec. 179 was introduced awile ago to stimulate manufacturing by permitting taxpayers to expense a fixed amount of $$ up front and then depreciate the balance of the basis under lives and annual %'s as spelled out in the code. Sec. 179 was introduced sometime in the 90's. IIRC it started out at something like 10,000 per year..for most depreciable personal property placed in service. Note that the property need not be new ( originally placed in service) to be eligible. Eligible property includes most business tangible personal property, including motor vehicles from golf carts to Peterbilts.

The first year deduction gradually increased up to 25,000. Then, in 2001 the 179 limit went up to 125,000 to spur economic recovery. (It went up to 150,000 in a bill passed earlier this year). The 179 deduction for light trucks, vans and SUV's with a GVWR over 6000 lbs was frozen in 2004 at the 25,000 level.

Without the 179 election, depreciation on these type of vehicles, regardless of their cost is within a range of approx. 3,260 to 5,500 to 1,875 per year over a period of 6 years.
So, without the 179 option, the landscaper who buys an F-250 powerstoke diesel for ? 50K? would only be able to recover in deductions less than half his outlay. After 5 years, the vehicle is probably worn out. The 179 expense election (25,000 in yr 1 as opposed to 3,300) gets him most, but still not all of his 50K back.

As noted earlier, the smart business man makes the decision first based upon business needs (economic), with the tax implications interwoven, but still secondary.

Leasing a vehicle avoids all this. You get no 25,000 write off, and at the lease end, you have no truck, but for business property, it is an attractive alternative.

BTW, MB's in play with a GWVR are the G500, G55AMG SUV,ML350SUV and ML500SUV.

Note: Some of the newer unibody chasis may not qualify:R63,R320,ML63,ML320. There is uncertainty whether the IRS will consider these unibody (auto) chassis vehicles SUV's or cars, since they are build on a car chasis. Cars are not, of course allowed the 179 deduction. (They must be on a truck chassis)

But, hey, I don't write the music. I just sing the song....
And long after I'm dead and gone, there will be an Internal Revenue Code to deal with.

Happy July 4th.

Post Script. And just when you thought it was all clear, I forgot to mention a key point: the 179 deduction is not permitted for the purposes of the dreaded Alternative Minimum Tax. All depreciation is recalculated under different rules for AMT purposes.:dizzy2::book: