Tax Incentive to buy a New Vibe

[jake75]

The Senate supposedly has a couple of tax breaks in their version of the Stimulus Bill:1. Interest paid on loans to buy autos or light trucks could be deducted for 2009, even for nonitemizers. This would apply to vehicles bought after Nov. 12, 2008 and before Jan. 1, 2010, although the Housemay move the start date into 2009. The benefit would begin phasing out for couples with adjusted gross incomes over $250,000 and singles with AGIs over $125,000 2. Any state sales tax or excise tax paid on these vehicles would be deductible. Buyers would get an above-the-line write-off, with an identical income phaseout. Effective date unclear.One problem - anything that lowers the cost of a new car seems to lower the value of used cars so for many new car buyers it might be a wash.

[jake75]

These car sales tax and loan interest tax breaks were in the final bill approved by the Senate but have been so widely criticized in the press that I expect they will not survive in the House-Senate Conference Committee.Since these deductions would also be available for those who do not itemize it would be of benefit to the less affluent. However, many doubt it will do much to increase car sales, and also question the wisdom of encouraging people to take on more debt. Of course many of the "well off" people already have a way of deducting car loan interest - they just finance it with a home equity loan.

[KNINE]

Or if you're a member of the Obama staff, you don't have to pay your taxes at all.