'Super' SUV [Hummer-H1] Tax Break Could Reach $75,000.00-Fuel Economy Alert!

Detroit Auto News Insider ^ | January 21, 2003 SGT | Jeff Plungis

[ewing]

Presdient George W. Bush's economic growth plan could triple the size of a little known tax loophole that some small business owners are using to finance purchases of large SUV's.

One of President Bushs proposed tax cuts would raise from $25,000.00 to $75.000.00 the amount small business owners can write off when buying an SUV for business purposes.

Since the SUV loophole was first reported by the Detroit News last month, several consumer groups and lawmakers have raised concerns about the fairness of the provision.

[fight_truth_decay]

What's wrong with Success?

[fight_truth_decay]

An engineer may get $50 grand a year (example) but costs GE $65,000. One sees the pay check but without the medical costs,benefits, etc., his salary to start may Gross $50,000 but may be costing the company $65,000.

[Eva]

The Scarlet SUV or Who's against SUVs? The Geeks!

[fight_truth_decay]

Correction: scratch Ford !

[ewing]

No one sells the vehicle. Look at all of the old farm equipment laying in rural yards..

[ewing]

Thanks.

[On the Road to Serfdom]

A company pays tax on its profits. Profit = Revenue - Cost. If a company pays a CEO $10 million or buys a $100,000 vehicle used for business then that is a cost and the owner(s) of the company subtract it from revenue when calculating profit. What the government is doing is saying lets pretend you did not have that cost so we can tax you on pretend profits. Then we will tax the CEO as well with income tax event though we are pretending the payement never occured when we calculate profit.

[biblewonk]

An engineer may get $50 grand a year (example) but costs GE $65,000. One sees the pay check but without the medical costs,benefits, etc., his salary to start may Gross $50,000 but may be costing the company $65,000.

Duh. Standard cost for an engineer is about 250K given a pay of about 50k.

[biblewonk]

A company pays tax on its profits. Profit = Revenue - Cost. If a company pays a CEO $10 million or buys a $100,000 vehicle used for business then that is a cost and the owner(s) of the company subtract it from revenue when calculating profit. What the government is doing is saying lets pretend you did not have that cost so we can tax you on pretend profits. Then we will tax the CEO as well with income tax event though we are pretending the payement never occured when we calculate profit.

I was counselling with Newgeezer about your post. If what you say is true then my understanding was completely backwards and Bill Clinton is a hero for getting rid of this double tax. It sounds like you are saying that if Harley makes 50M in profit and pays it all to the CEO then they still pay the tax on the 50M and so does the CEO for receiving it.

[On the Road to Serfdom]

It sounds like you are saying that if Harley makes 50M in profit and pays it all to the CEO then they still pay the tax on the 50M and so does the CEO for receiving it.

Exactly, except their "profit" would actually be zero in your example but they would pay tax on $49 imaginary profit if up to $1 million (not sure if that is exact) salary is allowed to count.

Also, it think what made the law be repealed was Republicans were pushing to have it apply to Hollywood. Not to have it actually happen but to get Democrats to back down. Not sure about that thought maybe someone can verify the details.

[isthisnickcool]

Pay Cash!

Ditto!

[biblewonk]

Exactly, except their "profit" would actually be zero in your example but they would pay tax on $49 imaginary profit if up to $1 million (not sure if that is exact) salary is allowed to count.

Yes their real profit would be zero in my example though they would pay as if they made 49 million. How strange and if you are right I was totally wrong.

Also, it think what made the law be repealed was Republicans were pushing to have it apply to Hollywood. Not to have it actually happen but to get Democrats to back down. Not sure about that thought maybe someone can verify the details.

So republicans forced Clinton to get rid of it knowing that it didn't bother Clinton to screw corporate america but he would never think of hurting Hoarywood. If you can verify this I'd appreciate it. Thanks, I learned something.

Best regards, BW

[On the Road to Serfdom]

I could not find too much with my internet search, it is an old story after all. Here are a couple links on the tax:

http://www.taxprophet.com/pubs/clint_nl.html
http://www.cato.org/research/articles/reynolds-020919.html

As for the Hollywood strategy I could not find anyting on it but I am 70% sure I am right. There is a chance however that I only read about the strategy at the time on a forum like this, and it was about what the Republicans should do -not necessarily what they actually did. I am pretty sure they actually did it thought and I hope someone else can verify it.