Tax Rant on SUVs

by Dual Income No Kids on February 24, 2010 · 5 comments

Please leave us a comment for our giveaway of book giveaway from The Tax Lady, Roni Deutch.

Today I’ve got a rant on something I had heard rumor of before, but still can’t quite believe how messed up our system is.

As it happens, an exception to the luxury car rules allows you to use expensing if your new business vehicle is heavier than six thousand pounds. For a car, that means six thousand pounds empty, which disqualifies almost all cars right off the bat.

But, for a sports utility vehicle, it is six thousand pounds including the maximum for passengers and cargo, so many SUVs can qualify.

My side comment to this, not The Tax Lady’s, is how on earth can our government create a tax system that gives benefits for purchasing SUVs rather than disincentives. It just really doesn’t make sense.

At least if they left things alone and didn’t subsidize SUVs or gas people could make choices based on the real cost of driving a car.

Readers: Please leave us a comment for our giveaway, and I’d love your thoughts on this reg.

Cheers,

Miel

P.S. There was an article today on the New York Times today called “G.M. to Close Hummer After Sales Collapse” So perhaps there is justice in the world, or at least reduced demand for gas guzzling behemoths driving on freeways in America, despite the tax system!

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{ 5 comments… read them below or add one }

1 Donnie February 24, 2010 at 10:13 am

I can't imagine someone specifically crafted a law like this. It is probably a loophole that someone discovered.

2 Anonymous February 24, 2010 at 1:38 pm

It's an old loophold that needs to be closed. The following info is from bankrate.. "The tax provision's original intent back in the 1970s was to enable small farmers and self-employed workers to buy a truck or van without having to fork over the luxury car tax that was then in effect and has since expired. At the time, it made perfect sense to qualify the vehicles by weight because no luxury cars exceeded the 6,000-pound gross vehicle weight threshold."

3 Dual Income No Kids February 25, 2010 at 1:05 am

Anon – Thanks for your comment. Your right, this did make a lot of sense in 1970, but needs to be changed.

It's kind of like ATM, where making $100,000 seemed like a millionaire back in the day. Now things look different.

Thanks for your comments!

You will be entered into the drawing for the book give away this week, so please check back to see if your comment won.

Cheers,

Miel

4 Tim February 25, 2010 at 5:48 pm

it's more than just when the tax provision was dated. It is how the govt defines SUVs. SUVs are considered "light trucks", and unfortunately/fortunately, as such they are treated favorably in many different ways, whether it is being omitted from CAFE standards or these sorts of exemptions.

anyways, i'm not an suv basher, although we don't own one. families have very good reasons to buy an suv over a car, and although i don't think there should be favorable treatment for them, I don't think there should be disincentive to own them either.

5 Dual Income No Kids February 27, 2010 at 5:10 pm

Congrats Donnie! You've won this give away. Please contact us at dinksfinanceblog @ yahoo.com with your address and we will send the book out on Monday.

Best,

Miel

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