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Zinhead
| | Posted on Tuesday, January 21, 2003 - 10:11 pm: | 
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Bush plan gives huge tax break to buyers of big SUVs
Tue Jan 21, 7:48 AM ET Add Business - USA TODAY to My Yahoo!
David Kiley USA TODAY
DETROIT -- Buying big, luxurious sport-utility vehicles could cost a lot less under the Bush administration's economic stimulus proposal, even though a Bush appointee blasted SUVs last week as dangerous fuel hogs.
Small businesses and the self-employed could deduct the entire cost, up to $75,000, from business income the year of the purchase. Normally it would be written off over several years, using a depreciation schedule. Deducting the entire cost in one year considerably reduces that year's taxable income, and income taxes. In some cases, it could result in paying no federal income tax.
A similar deduction in the current tax code is limited to $25,000. Tripling that creates a much more alluring incentive at a time when SUVs are under fire for fuel consumption and safety concerns.
Bush appointee Jeffrey Runge, head of the National Highway Traffic Safety Administration (news - web sites), scolded automakers at an industry conference one week ago for not making SUVs safer and more fuel efficient. He told reporters that he considers some SUVs so dangerous he wouldn't allow his family in them ''if they were the last vehicles on Earth.''
A stung auto industry shot back with statistics showing SUVs are very safe in the most common types of crashes.
White House spokesman Taylor Gross said Monday that the provision ''is not designed to favor one vehicle over another, but rather to allow small businesses to buy more equipment and to create more jobs.''
Computers and other equipment do also get favorable treatment in the provision to help small businesses and the self-employed upgrade their hardware. But the language regarding vehicles limits the tax benefit to those with a gross vehicle weight rating of 6,000 pounds or more. That means full-size SUVs and pickups.
As a result, an accountant who'd do fine with a 30-mile-per-gallon compact sedan as a company car could be enticed into a big, 15-mpg SUV instead because of the deduction. Or a real estate agent about to buy a 20-mpg midsize SUV that doesn't qualify for the deduction might opt for a full-size SUV instead, because it does qualify.
Taxpayers for Common Sense (TCS) estimates that the current deduction cuts tax revenue $1 billion for every 100,000 SUVs, and vows to lobby against tripling the amount. ''The market for personal-use SUVs has outgrown the original intent of this tax break,'' says Aileen Roder of TCS.
''When a loophole gives an accountant an incentive to deduct the cost of his luxury SUV, it makes the argument of how ridiculous'' it is, says Jonathan Collegio of Americans for Tax Reform.
During furious SUV sales last month, ''We did have some people coming in saying, 'My accountant told me I better buy something,' '' says Chevrolet dealer Jerry Haggerty in Glen Ellyn, Ill. |
Phillip Perkinson (R0ver4x4)
| | Posted on Tuesday, January 21, 2003 - 10:25 pm: |
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damn you beat me to it |
Jason D Gustavson (Gustavsonj)
| | Posted on Tuesday, January 21, 2003 - 10:56 pm: |
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My 02 rr is a write off. but any idea when this new plan takes in affect |
TPH (Snowman)
| | Posted on Wednesday, January 22, 2003 - 09:56 am: |
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Jason-
Do you have a Disco and two RR's? Damn! |
Prescottj (Prescottj)
| | Posted on Wednesday, January 22, 2003 - 10:54 am: |
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plan sounds sweet |
Jason D Gustavson (Gustavsonj)
| | Posted on Wednesday, January 22, 2003 - 10:58 am: |
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traded 98 in for an 02 after the girlfriend wreked it |
Tuna Colada
| | Posted on Wednesday, January 22, 2003 - 11:57 am: |
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I just bought my '03 for this reason but it was based on the $25K write off and 5 year depreciation. This would be huge for me and would be like getting a $75K vehicle for free... |
Jaime (Blueboy)
| | Posted on Wednesday, January 22, 2003 - 12:11 pm: |
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here is the jest of it as it currently is written:
"If you are a small business owner in the market for a business vehicle, looking for a substantial tax break, or both, a heavy sport utility vehicle (SUV) may be for you. The Internal Revenue Code Section 179 allows for an election to treat the cost of certain business assets as a current expense rather than a capital expenditure to be depreciated over time. The maximum allowable deduction for the Section 179 election is $20,000 for 2000, slated to increase to $24,000 for 2001."
"In order for your vehicle to not qualify as a passenger automobile, it must have a gross (loaded) vehicle weight rating above 6,000 pounds. This should not be confused with the vehicles "curb weight", which may be much lower than the loaded vehicle weight rating, and thus lead you to believe that the vehicle does not qualify. Several heavy SUVs and trucks meet this test, with the Ford Expedition and Excursion, Chevy and GMC Suburbans, GMC Yukon, Lincoln Navigator, and Toyota Land Cruisers being the most popular. " |
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