Mark Hickey <
[email protected]> wrote:
>[email protected] wrote:
>
>>
>>Mark Hickey wrote:
>>
>>> And somehow the fact that Americans are buying big cars is GWB's
>>> personal fault? He's actually done a lot of funding for alternative
>>> fuel and fuel cell vehicles though (something that for some odd reason
>>> never seems to get much press).
>>
>>Big kudos to uncle Georgie for finally signing into law a $2,000
>>one-time credit for the purchase of clean-fuel vehicles (including
>>hybrids).
>
>Agreed.
>
>>But as to your question above, GWB signed the Jobs and Growth Act
>>(5/03), raising the deduction for items like SUV's from $25,000 to
>>$100,000.
>>
>>This act also increased the "bonus deduction" from 30% to 50%,
>>which businesses can utilize in the first year of purchase on the
>>amount above the initial deduction. This bonus deduction was
>>established in addition to the five-year depreciation schedule, which
>>remained the same.
>>
>>Under the new plan, a business owner who purchased a $110,000 Hummer H1
>>in 2003 could now deduct a total of $106,000 in the first year.
>>
>>This made the purchase of at least 55 large SUVs, passenger vans, and
>>trucks-all priced under $100,000-completely deductible in the first
>>year.
>>
>>How many biggest-of-the-big SUV's were sold before the "loophole" was
>>closed (by the Dems). Even when "closed," incidentally, the
>>biggest-of-the-big owners still had an uncapped first-year deduction.
>
>While it's true that hypothetically what you say above is true - but
>you're projecting a program designed to encourage business spending
>and growth onto a VERY narrow outcome. No doubt a few Hummers were
>purchased as a result - but just because I run a business and suddenly
>have the ability to deduct a higher percentage of the cost of a
>capital asset does NOT mean I'm going to run out and buy a fleet of
>Hummers. Even if I DO need a vehicle, the ability to depreciate it
>faster doesn't mean it's going to affect my vehicle choice at all. If
>what I really need is a Toyota pickup, I'll be buying a Toyota pickup.
But your approach doesn't represent what actually happened (see
below).
If what you need -- as is sooo often the case -- is a new /vehicle/,
then you go . . . vehicle shopping, figuring out what's available, and
best fits your needs, as you go along. If you wanted a Toyota p/u,
but found you could save a huge amount of money by buying a larger
(far less fuel-efficient) vehicular penis extender . . . mightn't you?
Many did.
"With the current top business tax rate at 35 percent, this incentive
program effectively cuts $18,900 off the price of a $54,000 Escalade."
[1]
>I may just order it with a sunroof. ;-)
You're saying this . . . in Arizona . . . in August? Three words for
you: Ess Pee Eff.
>>Horrible, horrible mistake. Smile and wave at every Excursion driver
>>that you pass who has had the audacity to put a "Support Our Troops"
>>magnet on their car....
>
>Seriously now - what percentage of large SUVs on the road do you
>suppose would NOT be there if the legislation had included an
>"exclusion for Excursions"? I have to believe it's miniscule at best.
Well . . . 55+ actual SUV's fell into the loopholed category [2].
Take a gander at that list. Missing anything there? Not much.
Let's say, for argument sake, that the /buyers/ were either unaware
that this tax advantage existed, or that they didn't factor it into
their vehicle-selection choice. Would you extend the same logic to
the /dealers/ trying to push these high-margin cars? Or do you think
the salespeople had had it drummed into their sales pitches that the
best way to upsell potentially SUV-hungry, substantial income buyers
is to thoroughly explain the tax advantages these behemoths offer?
Sales of the biggest-of-the-big were at record highs during this
period, softening substantially when the loophole was closed [3]
So . . . yeah . . . I think it drove automotive purchasing decisions
quite effectively.
All of this is incredibly germane to the topic. All other things
equal, if you drive up demand (by dramatically increasing gas
consumption, especially in a category that has its own separate CAFE
standard), you increase pricing . . . sometimes even to $65/bbl.
That's certainly one cost that trickles down to all consumers,
including those on the lower strata of earnings, trying simply to eke
out a living and figure out how they can manage at $3/gallon.
And when the populace is so inexorably addicted to gasoline . . . and
the competition on the horizon is so fierce (China, India, etc.), and
the folks are clamoring about the price . . . what's a boy to do to
ensure stable supply despite and hopefully gain some control over
price stability. I know one way that some might look at.
They laughed hysterically at Carter for his sweater-wearing 'turn down
the thermostat' approach. How much would we have had to modify CAFE
(include /all/ vehicles, raise the standard) to end our dependence on
OPEC oil? What geopolitical consequences would that have had? Would
we still have invaded Iraq?
Hmmm.
[1]
http://www.selfemployedweb.com/suv-tax-loophole-2.htm
[2]
http://www.selfemployedweb.com/suv-tax-deduction-list.htm
[3]
http://www.selfemployedweb.com/suv-tax-deduction-4.htm
about your saying there's no such thing as evil (or words to that effect)