You are correct. What a disgrace.
Posted on 02/12/2005 10:23:21 PM PST by soccer_linux_mozilla
Almost as long as Reagan.
Truth About Trade & Technology - President Reagan: We Remember
Reagan’s commitment to free trade went far beyond rhetoric. When he was running for president in 1979, he spoke of a “North American accord” that would allow the free movement of people and merchandise. Most people dismissed that idea “as a campaign gimmick,” writes biographer Lou Cannon. In 1988, he signed the Canada-U.S. Free Trade Agreement, which in turn led to a “framework agreement” with Mexico. The Bush and Clinton administrations then were able to negotiate the North American Free Trade Agreement.
What a dunce that Reagan was huh?
If those dollars come flooding back in, then my take out Chinese food starts getting mighty expensive.
I think everyone pretty much agrees that housing costs are a bit high. Optimists see it as a permanent feature while those less cheery see it as a bubble.
There are many things that could cause them to "correct," such as a rise in interest rates, but also a bursting of the equity debt bubble and general economic downturn. When people start saying "we can inflate ourselves out of the problem," I may be along in this, but that's scary to me.
This theory has been discredited for so long, that it's a wonder you bring it up.
Hoover's tariffs had almost nothing to do with the Depression--rather, it was a combination of other factors, some in monetary policy...
But you display the same knowledge of history that you do of the Social Contract--no surprise, there.
JB's right: the US has no obligations toward those corporations which are domicilied here but are only beneficiaries of the US (i.e., takers) rather than givers.
Best not be one of them...
I disagree, I believe that the U.S. does have an obligation to U.S. corporations in the same way that it has an obligation to its citizens. The most basic of these obligation are:
A)A fair set of laws that are enforced fairly.
B)Protection of copyright and other property.
C)Protection of workers/U.S. citizens.
Only by the Keynesians who are trying to find some purchase to prop up their liberal dogma.
Hayek was right all along, and it pisses off the Socialists that their run at global domination was thwarted by Free Markets.
You are correct. What a disgrace.
What $25,000 tax break are you talking about?
Businesses got a $25,000 credit if for their vehicle they purchased an SUV. I believe that it has been closed, but I'm not positive.
I did a google, and while there are many articles about this (the keyword to add to searches is 6,000 since that is the magic weight where this became highly tax-advantaged), I thought that this one from taxpayer.net was the most interesting:
Enter your email:
TCS White Papers
printable version (pdf)
vehicles qualifying for the tax break (pdf)
A HUMMER OF A TAX BREAK
December 12, 2003OVERVIEW
One reason the U.S. government provides tax credits is to promote consumer behavior that benefits the greater good. While not many would argue with a tax credit that allows teachers to recover unreimbursed costs of school supplies, for example, some tax credits demonstrate a failure of our national priorities. The tax break given to small business owners that allows the entire purchase price of a sport utility vehicle (SUV) to be deducted is one of the most glaring examples of a good idea going in the wrong direction.Under current tax policy, the U.S. government grants massive tax breaks to purchasers of SUVs. The original intent of the provision was to increase capital investments by farmers and other small business owners who rely on light-trucks or vans (ie. construction companies). When this provision was added to the tax code, luxury passenger SUVs were not the market force they have become, and it appeared a good way to help small business owners by accelerating depreciation and avoiding a luxury-tax surcharge.1
Over time, however, this provision has developed into a loophole-a loophole big enough to drive a 6,000-pound SUV through. The problem has arisen largely because the tax code classifies vehicles by weight instead of function. First, a truck or van is defined as a vehicle that weighs more than 6,000 pounds.2 Before the advent of the SUV, this was a sufficient way to separate passenger automobiles from other classes of vehicles. The growth of the market for large, luxury SUVs, has dramatically expanded the number of what are essentially passenger vehicles weighing over 6,000 pounds. In addition, the weight classification for a passenger automobile is determined by the "unloaded gross vehicle weight," or the amount the vehicle weighs with nothing in it.3 SUVs are weighed according to the "gross vehicle weight" rating, which is the weight of the car itself plus the load the vehicle should be able to carry.4 This distinction makes it easier for certain vehicles to achieve the status of "light-truck" even if the actual vehicle weight is more in line with passenger automobiles.
BEFORE AND AFTER
First-year deductions on a
$110,000 Hummer H1
(note: all other SUVs are fully deductible)Economic Stimulus Pkg 2002 Jobs and Growth Act 2003 Equipment Investment $25,000 $100,000 Bonus Deduction $25,500 (30%) $5,000
(50%)5-year depreciation $11,900 $1,000 Total deduction $62,400 $106,000 Historically, the government has placed a cap on and set a depreciation schedule for the allowable deductions for a business vehicle purchase. The Internal Revenue Code (IRC) differentiates between vehicles weighing less than 6,000 pounds and the heavier class of trucks and vans, allowing the heavier vehicles accelerated depreciation schedules under IRC section 179.5
Prior to enactment of the Jobs and Growth Tax Relief Reconciliation Act of 2003 (Jobs and Growth Act), the 2003 tax code schedule for business depreciation allowed for a deduction of up to $25,000 in the year of purchase of a truck or van weighing over 6,000 pounds, and set a five-year depreciation schedule. In March 2002, Congress passed an economic stimulus package that allowed an additional 30% "bonus deduction."6
With passage of the Jobs and Growth Act, Congress dramatically expanded the already generous SUV loophole by raising the deduction ceiling for certain purchases-including SUVs-from $25,000 to $100,000.7 Under this new rule, the entire cost of all but one large SUV-the Hummer H1-can be deducted. This act also increased the "bonus deduction" from 30% to 50%8, 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 schedule9, which remained the same.
Under the new plan, a business owner who purchases a $110,000 Hummer H1 in 2003 can now deduct a total of $106,000 in the first year (see table).
EFFECTS
These changes to the tax code, which were originally intended to spur capital investments by farmers and small businesses that rely on heavier vehicles, have made the purchase of heavy SUVs extremely lucrative for any small business owner, whether or not the vehicle is necessary in their work. It has raised the deduction cap to $100,000 for small businesses, while retaining all other aspects of the tax cut. This makes the purchase of at least 55 large SUVs, passenger vans, and trucks-all priced under $100,000-completely deductible in the first year.As a result, Hummer sales, and SUV sales in general, have skyrocketed and this trend has continued with the passage of the Jobs and Growth Act.10 This has raised a number of important questions about the effect of this provision. For one, this is another tax break that primarily benefits the rich. Skip Barnett, who owns a hummer dealership in Atlanta, said that most of his buyers are small-business owners with incomes of over $200,000.11 The tax break has encouraged people from all lines of work, including real-estate agents, lawyers, consultants, and many others-for whom this provision was never intended-to purchase a luxury SUV instead of a luxury automobile, which is not eligible for the same deductions. Assuming that the average SUV buyer pays 35% on income taxes, and that the average SUV costs $40,000 (all of which is now deductible), this will cost the treasury an estimated $14,000 per taxpayer that takes the deduction, up from an average of $11,060 before the cap was increased to $100,000. For every 100,000 taxpayers that take advantage of this loophole, it will cost the treasury an estimated $1.4 billion!
CLOSING THE LOOPHOLE
Like many tax breaks, this one started with good intentions-helping family farmers and businesses purchase necessary equipment. This aspect of the provision needs to be maintained. With the rapidly expanding SUV market, however, the tax exemption has become a misguided incentive for people to buy much larger vehicles than they need.The loophole that allows the law to be misused should be removed. The way to do this is to more accurately define "passenger vehicles" and "work vehicles." Currently, a passenger vehicle is defined as any 4-wheeled automobile designed primarily for use on public streets, roads, and highways that weighs less than 6,000 pounds.12 Passenger SUVs that are over 6,000 pounds need to be distinguished from industrial vehicles and placed under the normal depreciation schedule for businesses in IRC section 280F.
Attempts are already underway to close this costly loophole. Almost identical legislation has been introduced in both houses of Congress13 by Sen. Barbara Boxer (D-CA) and Rep. Anna Eshoo (D-CA) to clarify the original intent of the law and reclassify SUVs as luxury automobiles for purposes of depreciation limitations. Similarly, the Senate Finance Committee approved language14 in October 2003 relating to the Jumpstart our Business Strength Act15 that would shrink the tax deduction for large SUVs back down to $25,000 and define what is meant by a sport utility vehicle. Senator Don Nickles (R-OK), a member of the Senate Finance Committee, also introduced this language as an amendment during debate on the national energy bill16 in the Joint Conference Committee, but it was not included in the final conference report.
Vehicles that Qualify for the SUV Tax Break Vehicle Model Gross
Weight (lbs)MSRP Jobs and Growth Act 2003 BMW X5 Cadillac Chevrolet Astro Passenger Van Avalanche 1500 Avalanche 2500 Express Pass. Van 3500 Silverado 1500 Silverado 2500 Silverado 3500 Suburban 1500 Suburban 2500 Trailblazer Tahoe Dodge Durango Ram Cargo Van 3500 Ram MaxiVan 3500 Sprinter Ram 1500 Ram 2500 Ram 3500 Ford Econoline E350 Van Econoline E350 Pass. Wagon Excursion Expedition F150 Styleside F250 Super Duty F350 Super Duty GMC Safari AWD Pass. Van Savana Pass. Van 3500 Sierra 1500 Sierra 2500 Sierra 3500 Sierra Denali Yukon Denali Hummer H1 H2 Isuzu Ascender Land Rover Discovery Range Rover Lexus GX470 LX470 Lincoln Aviator Navigator Blackwood Mercedes G-Class M-Class Nissan Pathfinder Armada Titan Porsche Cayenne Toyota Land Cruiser Sequoia Tundra Volkswagon Touarag
printable version (pdf)
vehicles qualifying for the tax break (pdf)
Notes
1. The luxury excise tax on passenger automobiles expired on 12/31/02. It has not been reinstated yet.
2. 26 U.S.C. 280F(d)(5)(A)(ii).
3. Ibid.
4. Bill Sanders. "Annual Depreciation Limits and Gross Vehicle Weight Ratings for Trucks, Vans, and Sport Utility Vehicles." undated. Available online: http://www.biz.colostate.edu/faculty/cherieo/GrossVehicleWeights.doc.
5. 26 U.S.C. 179 and 280F.
6. P.L. 107-147 sec. 101.
7. P.L. 108-27 sec. 202. This increase is effective from 2003-2005. Beginning in 2006, the limit returns to $25,000.
8. P.L. 108-27 sec. 201. This 50% bonus is available for business purchases made between September 11, 2001 and December 31, 2004.
9. see 26 U.S.C. 168.
10. Brad Wong. "It's Not Just A Hummer, It's a Tax Break." Seattle Post-Intelligencer. January 17, 2003.
11. Jeff Plungis. "SUV Tax Break May Reach $75,000." The Detroit News. January 20, 2003.
12. 26 U.S.C. 280F.
13. SUV Business Tax Loophole Closure Act, H.R. 727 and S. 265.
14. U.S. Congress, Joint Committee on Taxation. Senate Report 108-192, Title IV(F)(13) regarding the Jumpstart Our Business Strength (JOBS) Act. November 7, 2003: 71-72. Available online: http://www.house.gov/jct/x-85-03.pdf.
15. U.S. Senate, 108th Congress. Jumpstart Our Business Strength (JOBS) Act, S. 1637.
16. U.S. House of Representatives, 108th Congress. Energy Policy Act of 2003, H.R. 6.651 Pennsylvania Ave, SE | Washington, DC 20003 | 1-800-taxpayer | fax: 202-546-8511
From Snows article:It has raised the deduction cap to $100,000 for small businesses, while retaining all other aspects of the tax cut. This makes the purchase of at least 55 large SUVs, passenger vans, and trucks-all priced under $100,000-completely deductible in the first year.
A deduction saves the buyer taxes on the purchase, a credit saves the buyer the entire purchase price.
"Hayek was right all along, and it pisses off the Socialists that their run at global domination was thwarted by Free Markets."
And it makes the Chinese quite happy that it steadily strips the US of it's industry and transfers it to them, so they can have the ability to pound us into the pavement in 20 years.
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