Posted on 12/30/2014 4:18:02 AM PST by LogicDesigner
If politics is the art of successful compromise--defined as outcomes that make all parties equally unhappy--then the recent budget extension bill offers something for everyone.
It extended the tax credits for electric-car charging stations and natural-gas-vehicle refueling stations, which should make owners of those vehicles happy.
But it did not extend the generous tax credits for purchase or lease of hydrogen fuel-cell vehicles, disappointing advocates of that zero-emission vehicle technology. Those advocates include Toyota, Hyundai, and Honda.
Now, it turns out, the often-reviled "gas guzzler tax deduction" was restored to its previous level by the budget bill as well.
As noted last week by the AutoSpies site, the Section 179 tax deduction that allows large capital purchases to be deducted as a business expense, rather than amortized over a number of years, has been returned to its previous level of $500,000.
(Readers can make their own judgment of the article's triumphal, sneering, "Take THAT, green-car weenies!" tone.)
Originally added to the Tax Code during the Bush era...
(Excerpt) Read more at greencarreports.com ...
What an idiotic spin on Section 179.
It sure is.
This provision was originally intended to limit deductions to work trucks, but it has spawned a whole generation of self-employed professionals (lawyers, accountants, real estate agents, etc.) who buy large SUVs that have no real connection to the work they do.
Electric vehicles are subsidized with tax credits, whether or not they are used for business purposes. These are accelerated tax deductions for business vehicles. All business vehicles qualify for tax deductions for the full value of the vehicle. These ones just get the deductions earlier. While not good, it's not remotely similar to electric vehicle credits, which consumers qualify for.
“...who buy large SUVs that have no real connection to the work they do.”
Ever tried to haul a family of six to a remote ranch in a mini van? Real Estate agents where I live (90 miles north of Yellowstone national Park) do.
Currently it’s 8 below zero, we have six inches of new snow and town is a fair way away over unplowed roads.
My wife is a Broker/Owner of a Realty company and we HAVE to have an SUV - FWIW, we only take the mileage deduction because we keep our cars a long time.
I do know many Real Estate professionals who do use the deduction and purchase a new vehicle every few years. If it’s legal why pay the money to the IRS?
Do you consider deducting business expenses from revenue to determine profit for taxes a subsidy?
If I'm the broker/owner of a realty company and I work in a region that covers several states in the South, wouldn't it make more sense to allow me to buy a smaller vehicle under Section 179?
“Do you consider deducting business expenses from revenue to determine profit for taxes a subsidy?” —thackney
No, as long as it is a legitimate business expense. As Alberta's Child explained in post 4,
“This provision was originally intended to limit deductions to work trucks, but it has spawned a whole generation of self-employed professionals (lawyers, accountants, real estate agents, etc.) who buy large SUVs that have no real connection to the work they do.” —Alberta's Child
Breaking News, really?
“I’m not questioning the legitimacy of that kind of business use.”
Correction, you were questioning it.
“My point is that there really is nothing special about that 6,000-lb. GVW requirement in most cases.”
I’ll agree with you there, though I believe that this section is on the books for farm and ranch equipment - perhaps that’s where the 6,000 lb. limit derived from...
“If I’m the broker/owner of a realty company and I work in a region that covers several states in the South...”
Egad man! The MLS fees would cost you a fortune!
All kinds of business equipment (e.g., electronics) can fit under Section 179 as well. That’s especially relevant since long depreciation periods make no sense for modern tech that needs to be more quickly upgraded.
Provided that every citizen can deduct his home and vehicle purchases/upkeep (read expenses) from his “revenue” then the answer would be no.
But given the treatment is only provided to incorporated “citizens” then I would have to say yes it is a subsidy.
You are confusing income with revenue. Business pay taxes on profit. Profit is revenue less expenses. Wages are part of that expenses.
But given the treatment is only provided to incorporated “citizens” then I would have to say yes it is a subsidy.
Are you trying to claim all businesses are subsidized? Do you want them to pay taxes on revenue? That would mean taxes on top of taxes as each item a business purchases would be fully taxed and also for the business selling the same items.
Where do you live? I’m in Paradise Valley.
Nope I want wages to be taxed as they should be - as an equal exchange of labor for $ without a profit.
Only profits should be taxed. So if purchased goods/services aren’t double taxed then why are wages paid by the business? Answer - because the wage double tax is born by the employee rather than the business and the taxman can get away with it.
But they are not double taxed. The business does not pay taxes on the wages, they are deducted from the revenue and not part of the taxes on their profit.
If I work for a large business and drive their truck, they get to deduct the cost of their truck. If I own my own business and drive a truck for work purposes, I also should be able to deduct the cost of the truck.
I see income tax existence as a separate issue from the topic. I can agree with eliminating income tax, but that is not the issue here.
If a small business owner is deducting a personal use vehicle as a business expense, that is a separate issue as well.
But it did not extend the generous tax credits for purchase or lease of hydrogen fuel-cell vehicles, disappointing advocates of that zero-emission vehicle technology.Zero-emission my ass. That's even less accurate than calling that time-waster, taking the bus, "efficient".
My first recording attempt. I think I got 95% of it.
http://a.clyp.it/dnuljlfx.mp3 (or if that link doesn't work: http://clyp.it/dnuljlfx)
(Like imgur, but for audio: http://clyp.it/)
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