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SUV sales climb on tax loophole
By Jim Hopkins, USA TODAY

A tax loophole big enough to drive a $90,000 sport-utility vehicle through is working magic on SUV sales.

Small-business owners are swamping dealers with orders for Porsche Cayennes, Cadillac Escalades and other pricey SUVs as Congress tries to close the loophole driving such sales.

Dealers sold more than 101,000 full-size and luxury SUVs last month - a 51% jump from a year ago in what's usually a slow month, says researcher Power Information Network. Figures aren't kept on the number sold to businesses.

Many sales were spurred by a small-business tax benefit in the $350 billion tax cut that President Bush (news - web sites) signed last May, dealers say. Before the cut, many vehicles weren't eligible for a business tax deduction.

Business owners such as Dean Parker in Mobile, Ala., discovered the benefit applied to SUVs weighing more than 6,000 pounds. Parker, who owns a paging service, spent $108,000 on a Cayenne and a Hummer H2 in June. He uses them for sales and service calls. Tax savings: $37,800.

The benefit raised to $100,000, from $25,000, the amount small firms can write off annually for investments in machinery and other big-ticket items. The increase was meant to spark business investment and job growth. But critics, including Sen. Don Nickles, R-Okla., say it's a costly giveaway that's ripe for abuse. Nickles is on the Finance Committee, which failed in an attempt to slash the benefit in November.

A tax bill awaiting action in the Senate seeks a cut again. A vote could come later this month or in March. Bush, amid pressure to trim the federal deficit, kept the benefit in his 2005 budget proposal last week. Whatever the outcome, it has become a gold mine for:

Buyers. Bob Marra and his fiancée plan to buy a $57,000 Escalade for their real estate and publishing companies near Palm Springs, Calif., in the next two weeks. Tax savings, after an allowance for personal use: $17,556.

Melody Warren, CEO of Transportation Logistics Systems, bought a Lexus GX 470 for $48,000 on Dec. 27, racing to close the deal by year's end so she could get a 2003 write-off. She'll use it for sales calls at the freight management company in Kansas City, Mo.

Dealers sold nearly 164,000 luxury SUVs in December, a 22% jump from 2002, says Power Information.

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*waits for the anti-SUV backlash* :rolleyes:
 

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This is deplorable. We are looking at a record budget deficit and the government is helping people to buy Porsches. Troops in Iraq are so chronically low on supplies that they have taken to using plentiful AK-47s (and ammo), but we supply rich guys with easy access to Hummers?

I know a guy who bought an H2, got the tax break, and uses it very occasionally to go to town. Most of the time, his son drives it around cruising for floozies, rap music booming. If there is any pressing social need for this, please tell me, because I can't see any upside.


I'm sorry, but as pro-GM and as pro-auto industry as I am, this is too much. This, in a nutshell, is everything that is wrong with the Bush administration.
 

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Saying this tax break is stupid does not make someone anti-SUV. The tax law is being twisted for uses that it was not intended and should be eliminated.

Allowing people to buy an SUV and claim it as "machinery" is not creating job or making the economy grow in a heathy or sustainable way.

Mark
 

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Originally posted by Tim_M@Feb 17 2004, 12:58 AM

I know a guy who bought an H2, got the tax break, and uses it very occasionally to go to town.  Most of the time, his son drives it around cruising for floozies, rap music booming.  If there is any pressing social need for this, please tell me, because I can't see any upside.
this just the rich getting richer while the poor are getting poorer...

welcome to the **** hole called reality.
 

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Originally posted by GotAWD@Feb 17 2004, 10:56 PM
this just the rich getting richer while the poor are getting poorer...
A misguided slogan at best - a better one is this:

"The wise continue to wisely invest their money and reap the benefits, while the unwise continue their unwise habits and stay where they're at."

Thus, the reason for the widening spread. Actually, "the rich are still getting richer" is a good sign, meaning that if you're smart with your money in America, you will get rich. Don't get me wrong, there are exceptions to every rule, but they are few and far between - hence "exceptions."

We need a flat tax - tax everyone equally, rich or poor, so EVERYONE pays their fair share. Our current system is hopelessly complex and is stifling our economy.

Oh yeah, the thread... Escalades and Cayenne Turbos are nice!
 

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Turbo Escalades R nicer. B)
 

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Originally posted by sharknose+Feb 18 2004, 04:11 PM--></div><table border='0' align='center' width='95%' cellpadding='3' cellspacing='1'><tr><td>QUOTE (sharknose @ Feb 18 2004, 04:11 PM)</td></tr><tr><td id='QUOTE'> <!--QuoteBegin-GotAWD@Feb 17 2004, 10:56 PM
this just the rich getting  richer  while the poor are getting poorer...
A misguided slogan at best - a better one is this:

"The wise continue to wisely invest their money and reap the benefits, while the unwise continue their unwise habits and stay where they're at."
[/b][/quote]
I agree. I'm of the mind that most of the people driving the bling-bling cars actually have invested most of their monies in superficial (read: rapidly depreciating) purchases. Not to sound too "Millionaire-Next Door," but most of the "rich" people driving the snazzy rides and living in the giant mansions are about 6 months away from bankruptcy. Interesting that people don't see it that way.

I say keep driving the H2's and QX56's; you're only making the shareholders wealthier! :D
 
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