RoadBikeReview.com's Forum Archives - Non-Cycling Discussions
buy a Hummer, get a 38K tax break! Unbelievable....(16 posts)
|buy a Hummer, get a 38K tax break! Unbelievable....||Bruno S|
Jan 18, 2003 1:38 PM
|They are so huge, they classify as tractors. They can give you a 38K tax break if you own a company or have a practice. They are starting to sell like pancakes because of this. Read below:
|That loophole needs to be closed||Alpedhuez55|
Jan 18, 2003 6:09 PM
|It is one thing to give a break to small business. They should get more breaks. This one is not what the original law was intended for. They need to reclassify these hummers as a luxury vehicle as soon as possible.
|let's say you are a rancher||ColnagoFE|
Jan 20, 2003 10:00 AM
|i can see someone like this using a hummer for various tasks and rightly taking the writeoff for that purpose. i'd have a hard time believing that everyone can use this as a writeoff. i somehow doubt the government would belive that my dad needs a hummer to deliver dry cleaning for his business.|
|Stick out your nose, I want to lead you around||53T|
Jan 19, 2003 1:30 PM
|People who operate their own business can write off a whole load of things. That's what business is all about.
My real point is of course, we react to whatever they print, whether it is imporatant or even makes sense. The article mentions pro athletes having H2s. Are they writing them off? Of course not. It makes the story sound better though.
The article mentions other SUVs, but not by name, again makes the story more focused, if not misleading.
How about the deduction for business meals, luxury box seats, office in home, travel expenses (like to conferences in Maui). I support all of them, do you oppose all of them?
|every business owner I know writes off a "company" car||retro|
Jan 19, 2003 8:30 PM
|I have several friends who own their own firms, usually small but fairly successful companies. Every one, that I can think of, had the business buy him a car. The official explanation is that they're the heads of the business, on call 24 hours a day, and so are always on company time. Off the top of my head, there's a Honda Pilot, a 4Runner, an Audi S4 (in case he has to get there FAST?) and an Accord. They all stay at home and are used for personal stuff, including vacations, but they're paid for by the companies. And I'd take bets that won't change under GWB.|
|Of course a small business man can write off a car but...||Alpedhuez55|
Jan 20, 2003 6:57 AM
|The amount is what makes this suspect. THey should be given depreciation on a car or SUV. If you are in a high tax bracket this can amount to $24,000. THat is wasteful. THis was a tax break that was designed to boost sales of farm equipment, Constuction equipment and heavy vehicles.
I do not have a problem with a businessman writing off a car. THere are limits to what you can deduct on luxury cars. Because the government classified this vehicle by weight instead of use they goverment created a tax loophole that is being abused. For the majority of it's owners, the Hummer is a luxury vehicle. THe deduction & depreciation should be the same as if they had bought a $100,000 BMW or Mercedes.
|Wrong Wrong Wrong||53T|
Jan 20, 2003 10:26 AM
|This "tax break" was not designed to boost farm equipment sales. This isn't even a tax break. Your calling this a tax beak is just another example of being led around by the nose.
Let's start at the beginning. If you operate a business (by yourself, or as a corporation) you are trying to make a profit, that is revenues in excess of expenses. You pay taxes on the profit. Everything you spend in an effort to make revenue is an expense. This includes any vehicle you use to further the business. (A real estate agent with an attention-getting H2 for instance). A few years ago, some bright liberal decided that it's just not right to let business list their vehicles as 100% expense (why? because we hate the rich, and that includes anyone who owns a business). Now thay can only expense some of the vehicle costs. There is one exception to this rediculous new rule, anything real heavy can still be 100% expense, that way the big city liberal congressmen can get the rural farm state reps to not oppose the measure in Congress. Well, you when you tinker, you get what you deserve. The rich people we hate are just buying heavier cars and thumbing their noses at the liberal congressmen. More power to them.
Note that there is no loophole here. Simple capitalist business theory says that all the vehicles should be expensed, that way the business will by what is right for them. Instead the liberals had to tinker with the tax code and in truly amaturish fashion have created a tax incentive to buy a Hummer! (intersting that this happened during the Clinton administation)
Liberals who hate business owners have nobody to blame for this other than themselves and the comedy writers that they elected.
Please pardon my tone, but the depth of the leftist propoganda on this board can be frightening at times.
Jan 20, 2003 11:01 AM
|seems to me that the moderates as well as the far right are pretty well covered here as well. doug sloan even grew up alongside rush limbaugh! (just kiddin ya doug).|
|Wrong Wrong Wrong||Alpedhuez55|
Jan 20, 2003 12:11 PM
|I am hardly a leftist. Just ask any of the anti-War crowd about that. I would rather see a flat tax myself. I have not read the tax code on this but am depending upon the accuracy to the article which said:
"In the mid-1980s, he said, Congress tightened rules about how much money can be written off on luxury automobiles used for business -- but excluded vehicles with a gross weight of 6,000 pounds or more, partly an attempt to help farmers afford tractors, large trucks and other heavy equipment."
I will grant you that there is a lot of left leaning propoganda on the board. The article also had a leftists slant to it by interviewing people who hinted at cheatring on taxes. I also like the woman who pulls her son on sled using her Hummer. Sounds like something that should be on Jackass to me.
I used to work for the IRS many moons ago back in the mid 80s but am hardly a tax expert now. THis hummer and other SUVs get around the normal depreciation limits available for luxury cars by weight alone. Use is not a factor. After 9/11 they increased the depreciation allowance on luxury cars from $3060 to $7600. Because these cars weigh more than 6,000 pounds, they get an even higher depreciation allowance. THese are still luxury vehicles as used.
I am just saying the Hummer is a luxury car and should be treated as such. If a realtor or wants buy a fleet of hummers for visibilty that is fine. Just dont make me subsidize close to half of the purchase through an allowance designed to benefit farmers. THe $7660 deduction is more than fair. If they want to buy the $60,000 Hummer, they should have to eat the depreciation above that figure, the same as if they bought a $60,000 Mercedes S Class.
I am not saying a businessman should not be able to deduct a car. THey certainly should. This loophole is just wasteful. I am all for lower taxes, I just think this is the wrong way to do it.
|Wrong Wrong Wrong||53T|
Jan 21, 2003 12:01 PM
|You are reling on the accuracy of the article to characterize this law as a measure to help farmers afford tractors. This is hogwash. The reporter's interpretation of the intent of the tax code is worthless and misguided.
Read the article closely, the tax code was tightened. That means the deduction for tractors was alreday there, they just decided not to eliminate it when the reduced teh deduction for lighter vehicles. Characterizing that as a provision to help farmers is self-serving and politically motivated. It is paramount to saying that me not stealing your wallet is a provision to help you afford groceries.
Let business people invest their money in whatever depreciating asset they want, and stop the social engineering that masquerades as fiscal stewadship in Washington.
|Not Wrong Wrong Wrong - many company cars are tax dodges||PdxMark|
Jan 20, 2003 2:59 PM
|As a small business owner, I well understand that business deductions are allowed for business expenses. From recent news articles, the small business deduction for cars applies only to vehicles that are used at least 50% for business. Driving to work doesn't count. Driving home from work doesn't count. Driving to the grocery store doesn't count. Less than 50% company use and you get NO deduction.
If cars were commonly used solely in business like copy machines, central phone systems, etc., then maybe there would be a regular 100% deduction. But cars are different, because people who have a company car then commonly don't buy a separate personal car. I haven't studied the rationale for the limited deduction, but I suspect it is based on the common practice that a "company car" is more a "company tax perk" for a business owner or executive.
Rather than prosecute each case of "company car" tax fraud for what it is, it seems that Congress decided it was easier to let the tax cheats have their way while penalizing the honest business owners. I don't see this as a case of of liberal anti-capitalism, but rather as a case of vested tax cheating being allowed to continue because the political uproar over forcing the tax cheats to follow the rules would be too great.
|yup...if you get audited then watch out||ColnagoFE|
Jan 20, 2003 3:32 PM
|I'd like to see a typical business owner explain to an IRS agent why he needs 4 new luxury cars for his business. Then again you can play the odds and assume you won't get audited...You'll likely get away with it if you don't send up too many other red flags.|
|It isn't that hard,||TJeanloz|
Jan 21, 2003 6:31 AM
|I'm a business owner, if retaining an employee (even if that employee is me) requires that I purchase that employee a new Jaguar every year, that is a business expense. I want to keep my workers happy, after all. I think this particular tax bit is being mis-reported and mis-interpreted; from the news story and what's followed here, I don't really understand how it works. Is this a tax credit for buying a vehicle? (i.e. they end up paying $X less in taxes), is it a depreciation allowance? Is it something they write off of their personal income? It's really not all that clear.
But I do find it interesting that people are deriding a law that helps many family farmers (and coincidentally many fewer Hummer owners) as unfair and a sop to the rich.
Jan 21, 2003 10:08 AM
|In a small business, if you have a (substantial) profit it usually means you need a new accountant. Profit in a private business creates a liability in the form of taxes. If I work it right, my income is less than my expenses four out of five years. That way I get to stay in business AND not have any tax liability. There are downsides to that strategy, but for the most part profit is nothing more than bragging rights for the uninformed. Look at cash flow for the real determining factor in success.
If the lefties really wanted to have the rich pay a bunch more in taxes, they would tax net worth, not income. The tax incentive for the H2 is interesting, but it does not make sense fpr everyone. All CPAs know about the stuff in the article, but not all of them are creative/gutsy enough to sign on with their client.
I think I'll order the yellow one.
|i wouldn't want to be them in an IRS audit (nm)||ColnagoFE|
Jan 20, 2003 10:04 AM
|Agreed - though odds are there will be no audit (nm)||PdxMark|
Jan 20, 2003 3:01 PM