Thursday, June 18, 2009

Federal Incentives for Auto Purchases Are Inconsistent

As part of the 2009 Stimulus Bill, consumers are able to deduct state and local sales and excise taxes paid on the purchase of a new foreign or domestic vehicle costing up to $49,500 that weighs no more than 8,500 pounds.

On the other hand, the federal government also allows consumers to deduct up to $25,000 on the purchase of an SUV weighting at least 6,000 lbs. Termed a Section 179 purchase, the bill was intended to assist GM, Ford and Chrysler in the sale of the more profitable large SUVs. Well it failed to prevent the bankruptcy of both GM and Chrysler, but continues to encourage Americans to buy the behemoth SUVs.

If the federal government is serious about cutting gasoline consumption and green house gases, it should first insure that current policies are consistent before embarking on passing new legislation.

Ernie Goss

1 comment:

Anonymous said...

I think the fall in GM sales and reduced SUV purchases are happening at the same time. We might be encouraged through the tax code to buy but aren't due to offsetting factors.

I do agree the Gov't needs to move to get us off oil.

GM's head of engineering was on Letterman three weeks ago. It was actually pretty good. He said two things need to happen.

1.) Tax gas prices so price rises to Europe levels
2.) Build an electric car to sell at under $30,000.

He said GM is about 1.5 years ahead of all competitors in the latest battery technology.

Look for Obama to include some investment, maybe our bailout remaining fund, in developing this advantage.

The government needs to help make the market. Once it's there, then it can push GM back out there to compete.

He already has his energy plan figured out. He layed it out during the campaign last Summer. After HC is done he'll quickly move to energy. Goal is this summer.