SUV Loophole
I posted this as a comment on Streak's Blog but figured I'd put it up here, too.
Here's a good article Law change halts huge SUV tax break -- Page 1 discussing the SUV tax break. One comment from it expresses a disappointing point about the recent "closing" of the loophole:
"I don't think it's going to affect people's buying habits. Most people buying SUVs are paying $40,000 or $50,000, so by the time you take the 50 percent bonus deduction and the $25,000 depreciation expense, most of them are still going to write off the full amount."
Once again, what was supposed to be a break for small business owners, ranchers, etc... who NEED to use large vehicles for BUSINESS. My own brother purchased an SUV for his business just to take advantage of this loophole last year. I suggested a Prius would be just as good for running to and from work or hauling clients around. He pointed out that it didn't weigh the necessary 3 TONS to qualify for the tax break! In other words, the tax law encourages you to purchase a larger vehicle for your business when a smaller vehicle could have done the job. As the article points out, when the wording was originally drafted back in the '70s, there weren't any luxury vehicles weighing over 6000 pounds! The vehicle has to be used 50% of the time for business. That leaves you the other 50% for vacations, kids to school, etc... all at those SUV fuel efficiency rates!
Here's another article SUV TAX Loophole citing increase in sales following the original loophole. Given the fact that the new changes claim to "close" the loophole but in practice still allow for plenty of incentive to buy the monsters, don't expect to see them disappearing from the roads any time soon.
BTW, one article says that the new law requires the vehicles to weigh over 14,000 pounds to get the full deduction. Let's wait and see if a 7 ton SUV rolls out any time soon!
Bootlegger
Here's a good article Law change halts huge SUV tax break -- Page 1 discussing the SUV tax break. One comment from it expresses a disappointing point about the recent "closing" of the loophole:
"I don't think it's going to affect people's buying habits. Most people buying SUVs are paying $40,000 or $50,000, so by the time you take the 50 percent bonus deduction and the $25,000 depreciation expense, most of them are still going to write off the full amount."
Once again, what was supposed to be a break for small business owners, ranchers, etc... who NEED to use large vehicles for BUSINESS. My own brother purchased an SUV for his business just to take advantage of this loophole last year. I suggested a Prius would be just as good for running to and from work or hauling clients around. He pointed out that it didn't weigh the necessary 3 TONS to qualify for the tax break! In other words, the tax law encourages you to purchase a larger vehicle for your business when a smaller vehicle could have done the job. As the article points out, when the wording was originally drafted back in the '70s, there weren't any luxury vehicles weighing over 6000 pounds! The vehicle has to be used 50% of the time for business. That leaves you the other 50% for vacations, kids to school, etc... all at those SUV fuel efficiency rates!
Here's another article SUV TAX Loophole citing increase in sales following the original loophole. Given the fact that the new changes claim to "close" the loophole but in practice still allow for plenty of incentive to buy the monsters, don't expect to see them disappearing from the roads any time soon.
BTW, one article says that the new law requires the vehicles to weigh over 14,000 pounds to get the full deduction. Let's wait and see if a 7 ton SUV rolls out any time soon!
Bootlegger
posted by Bootleg Blogger at 4:58 AM
1 Comments:
Hey, thanks for not only plugging my blog, but leaving thoughtful comments. I responded to your very good comment on my rather bigoted aside (thanks for the gentle correction) and would really like to hear more about your thoughts.
Streak
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