Economic Stimulus Tax Breaks

angelh84

I am hoping to buy my 370z a couple of months prior to the end of this year and I was wondering if any of you have heard or done any research on Obama's proposed stimulus tax breaks for consumers buying cars. The bill just passed congress yesterday and is expected to be signed by Obama very soon.

So I am hoping this means extra savings for those of us who are still wanting to buy our Z's but still can't quite afford it? I'd like to read a little more about this to see exactly what incentives we will get.

Anyone else know more about this?

brisk

really....
i thought the taxbreak was for the hybrird cars no?

frost

NEW YORK (CNNMoney.com) -- The economic stimulus plan is unlikely to help boost the auto industry because some say tax incentives for car purchases won't save buyers nearly as much as had been originally proposed.

Under the Auto Ownership Tax Assistance Amendment, car buyers will be able to deduct sales and excise taxes on the purchase price of a car up to $49,500. As originally proposed by Sen. Barbara Mikulski, D-Md., interest payments would have been deductible as well.

In an example provided by Mikulski's office, a family making $100,000 a year purchasing a $23,600 Chevrolet Malibu would save about $395 in income tax. In a similar example drawn up under the earlier proposal, in which interest payments were to be also deductible, that family would have saved $1,461 on its taxes.

For a family making $250,000 and buying a $35,000 Ford F-150 truck, the tax savings would be $588 under the current proposal, compared to $2,500 under the original proposal.

"It's going to take a whole lot more than that," said Jesse Toprak, a sales analyst with Edmunds.com. "We're talking about thousands of dollars to get people motivated at this point."

Auto sales have dropped to 26-year lows in recent months and automakers' own incentive plans are doing relatively little to stimulate sales. In January, automakers spent an average of about $2,700 per vehicle sold on incentives, according to an analysis by Edmunds.com, including cash rebates and low-interest financing.

"I'm not sure that incentive is likely to move anyone to do anything substantially different," Bill Pochiluk, an industry analyst with Automotive Compass, said of the final stimulus bill.

Mikuski called the end result a reasonable compromise.

"Through the rough and tumble of the legislative process, Congress has found a sensible center," Mikulski said in a prepared statement. "President Obama said the goal for the economic recovery program is to create jobs and save jobs. That's exactly what my proposal does."

The National Automobile Dealers Association, which had supported this and other proposals to stimulate auto sales released a statement in support of the measure.

"While including interest deductibility on auto loans would have promoted even greater consumer interest in a new automobile, we applaud both House and Senate leadership and especially Senators Barbara Mikulski, D-Md. and Sam Brownback, R-Kan., and Representatives Bill Pascrell, D-N.J., and Steve LaTourette, R-Ohio, for recognizing the importance of automotive retailing to the nation's economy," NADA said.

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370z OG

angelh84

That stinks! I just read another article that pretty much says the same thing. Oh well, I had higher hopes.

"A car buyer's savings will vary depend on financing terms, state and local sales tax rates and the buyer's income. Mikulski's office estimated a family with an income of $250,000 a year would save about $600 on a new $35,000 car.

Tax preparer Jackson Hewitt Tax Service Inc. estimated that a single taxpayer earning $40,000 a year would save $300 in taxes on the purchase of a $20,000 car. A taxpayer earning $80,000 annually would save $485 in taxes when buying a $30,000 car.

Dealers say they will use the tax deduction as a selling point, but they don't see it as a major boost to sales, which fell 37 percent in January compared to the previous year, dropping to the lowest levels in nearly three decades. In January, Chrysler's U.S. sales dropped 55 percent and General Motors saw U.S. sales fall 49 percent."

frost

$300 - $600 = almost nothing. maybe covers kickplates, floormats, and splashguards.

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370z OG

brisk

eh.
time to order now!

LiquidZ

At least its saving money.

frost

It's "fine" if you're already going to buy a car, but the idea is to convince people who are not in the market for a car to go buy one to stimulate the economy. Anyone who buys a car because $300 is thrown in front of them is a fuckin idiot, so in theory, this shouldn't help.

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370z OG

brisk

^ true that.
naive people will fall for this "bait"

dad

A tax break on new wheels. If you buy a new car, light truck, motorcycle or motor home this year and spend up to $49,500, you can deduct state and local sales taxes (most states levy about 6%). Individuals who make less than $125,000 and families making less than $250,000 qualify. You get the deduction whether or not you itemize on your return. A family that makes $150,000 a year and buys, say, a Dodge minivan could save about $420. Buy a plug-in hybrid and you could get a credit of up to $7,500.

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We can do without any article of luxury we have never had; but once obtained, it is not in human nature to surrender it voluntary.

dustyroads

I agree that it's not enough to sell cars, but if the original cut was passed I think it definitely would have helped. Repubs took it out. Why? It's like they want to see the economy fail, millions of people loose their jobs, and the country to tank. They would have to be selfish power hungry a-holes out only for themselves to want that.

frost

^ True, the original version had more for auto buyers that would have sweetened the pot. But if they kept all that in there, there would be no room for their pork spending.

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370z OG