Senate votes to give a tax break to new car buyers

[ProSense]

Senate votes to give a tax break to new car buyers

By ANDREW TAYLOR, Associated Press Writer Andrew Taylor, Associated Press Writer – 2 hrs 23 mins ago

WASHINGTON – The Senate voted Tuesday to give a tax break to new car buyers, setting aside bipartisan concerns over the size of an economic stimulus bill with a price tag approaching $900 billion. The vote was 71-26 to allow many car buyers to claim an income tax deduction for the cost of automobile sales taxes and interest payments on car loans.

Sen. Barbara Mikulski, D-Md., said the plan would aid the beleaguered automobile industry as well as create jobs at a time the economy is losing them at a rapid rate. "I believe we can help by getting the consumer into the showroom," she said.

The provision was attached to the economic stimulus bill at the heart of President Barack Obama's economic recovery plan and is subject to change or even elimination as the measure makes its way toward final passage.

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Mikulski's office put the cost of the tax break she sponsored at $11 billion for one year. It would apply to the first $49,500 in the price of a new car purchased between last Nov. 12 and Dec. 31, 2009. Individuals with incomes of up to $125,000 and couples earnings as much as $250,000 could qualify, including those who do not itemize their deductions.

Sen. Charles Grassley, R-Iowa, sought unsuccessfully to derail the proposal, saying it would only increase consumer debt in a time of recession and adding that there were other provisions in the legislation to help the auto industry. But the 71 votes in support were far more than the 60 needed for passage.

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Let's see deducting interest and taxes on $49,000 for cars (or SUVs) not tied to fuel efficiency for individuals earing up to $125K and couples up to $250K.

Is this smart?

Roll Call (Evidently, a lot of Repubs liked this one.)

[Kalyke]

1. Kind of hard to get a tax break on a new car when you can't afford

a new car.

:eyes:

[Occam Bandage]

3. "Making cars cheaper? Who wants that? Cars are too expensive!"

[Rosa Luxemburg]

10. but they must promote electric cars...GREEN cars!!!!

above anything else.

This could be a winner - exports my dear Watson!

[Occam Bandage]

2. Given how desperately we cried for an auto bailout, I can't imagine anyone here would oppose this. n

[ddeclue]

4. CRAP!! I just bought a new American car in January of 2008!

Where's MY tax break for keeping the big three in business.

For that matter why isn't there a requirement that all such cars be domestic?

[Aloha Spirit]

9. a requirement that all such cars be manufactured domestically is what I first thought of

well, after my initial revulsion at the idea.

[ShadowLiberal]

18. Probably a fear of other nations doing the same thing, hurting the big 3 elsewhere

Part of what caused problems during the depression was everyone putting up protective measures on their own industries, some put up in retaliation of other countries putting them up, that ended up making things even worse overall worldwide.

[kiva]

14. May 2008 here.

Oh well, would have been helpful.

[BuyingThyme]

5. Why should new buyers get a tax advantage over old buyers?

[NYC_SKP]

6. NO, not smart. They should have tied it to fuel economy.

The higher the fuel mileage, the greater the percentage tax break, up to the average mileage vehicle.

No breaks for poorer than average mileage vehicles.

No fucking exceptions, commercial buyers can already write it off for business vehicles.

[redstate_democrat]

7. This is great for the foreign car makers.

And who is able to get a car loan? I thought credit was locked up.

[Occam Bandage]

8. And dealers, and the domestic car makers, and everyone employed by either in America,

and everyone who lives in an area in which either type of factory exists.

[GeorgeGist]

11. Old school thinking ...

:freak:
:nuke:

[Barack_America]

12. As much as I would love to see this include a fuel efficiency clause...

I realize that would also exclude most pick-up trucks, which leaves me somewhat torn.

[Historic NY]

13. Might be helpful in NY state where our DMV whacks us over & over.

every-time a new car is sold from the time its made until its just about junked Ny collects sales tax on it. Another one of those little scams this state has. I do remember a time when the tax was deductible, that was before Raygun.

Lets see with GM begging me to buy a new vehicle including it loyality bonus & this plus the amount deducted from the vehicle its got to be worth well over 9 thousand maybe more on a truck. A 35 thousand dollar vehicle here has sales tax of 8.25% or about 2885.00 into the cost. I'm not buying yet maybe by the end of the year or next.

[question everything]

15. A story in the local news was about a bus route that has to cut service

even though the number of passengers has increased. Why? The bus company is supported by taxes collected when new cars are purchase...

[ProSense]

16. This is a stupid bill. Why rely on car buyers to bail out the auto companies?

How about supporting mass transit infrastructure to support that bus route.

The notion that people in a down economy (where unemployment is rampant) are going to be buying cars at a rate enough to stimulate the auto industry doesn't make sense.

[Historic NY]

17. All the countries around NY Metro area get a piece of the sales tax ...

thats why the government is desperate for us to start spending again..no sales tax = less service & layoffs of public service workers etc. its happening. Homes not being sold also figures into the tax puzzle of revenue.

[Honeycombe8]

19. This sounds great! I was planning on buying a new car in a yr or 2, so maybe it's this year?

Mine won't be any $49,000 car. Not even close. But it'd still help to have a deduction for the sales tax and interest.

This might help move the cars that are sitting in lots, unsold, and help the auto companies by getting people to buy now instead of wait.

There are people out there who are employed and are driving around in old cars, waiting for a good time to get a new car. I was mulling over buying used instead of new, but then I thought the gas mileage would be better in the new ones...and if I get a deduction, that's sweet. I would still look for a car with great gas mileage, and the other things I want in a car for the next 10 years.