Proposed Bill to give New car buyers tax break

[Blownhotrodder]

I understand what some of you are saying but you need to think of the economy on a global level. Its not just import/domestic anymore.

[Mr. Wyndham]

The companies' country of operation/HQ and general profit-flow is still very much import/domestic. That's where my issue stems from...

[DGthe3]

Originally Posted by Blownhotrodder

I understand what some of you are saying but you need to think of the economy on a global level. Its not just import/domestic anymore.

Very true. However, shouldn't governments help their own companies before they help foreign ones, regardless of the economic climate or the particular industry?

[Grape Ape]

Originally Posted by Dragoneye

The companies' country of operation/HQ and general profit-flow is still very much import/domestic. That's where my issue stems from...

For 2009 I don't expect any automakers to make much profit, especially not compared to the labor costs. I think a Honda built in the states is probably has a better impact on our economy that a G8 built in Oz since the paychecks will all get cashed and spent in the states. This is especially true if the majority of the parts are produced in the states to.

But I don't think they can discriminate without running afoul of the alphabet soup of trade treaties. And even if they could our trading partners would probably retaliate and that would suck for everyone.

Just in case it isn't clear to everyone: you won't get the $7,500 off your taxes, you will get to deduct the $7,500 from your income when you calculate your taxes. Its probably still good for $1,000+.

[Mr. Wyndham]

Originally Posted by Grape Ape

I think a Honda built in the states is probably has a better impact on our economy that a G8 built in Oz since the paychecks will all get cashed and spent in the states. This is especially true if the majority of the parts are produced in the states to.

But that Honda doesn't do anything for GM, Ford or Chrysler like the G8 does. And if they aren't benefiting, then they're hurting...and in turn the US will be hurting. If Honda hurts, Japan hurts...not us.

And I know all those trade treaties won't be easy to get around...but it's ludicrous, imo, to allow half of these buyers spend their rebate/deduction/whatever on a big-ticket foriegn item.

[DeathChill]

Originally Posted by Dragoneye

But that Honda doesn't do anything for GM, Ford or Chrysler like the G8 does. And if they aren't benefiting, then they're hurting...and in turn the US will be hurting. If Honda hurts, Japan hurts...not us.

And I know all those trade treaties won't be easy to get around...but it's ludicrous, imo, to allow half of these buyers spend their rebate/deduction/whatever on a big-ticket foriegn item.

You do realized Honda still pays taxes in the US, still employs people in the US and still has headquarters in the US, right?

[The_Blur]

Originally Posted by Dragoneye

They're proposing giving thousands to people to go spend on any car??

Were I a senator/etc, I'd demand that that money be spent on an American car, no discussion. Otherwise this is another example of how we like to throw our money out of the country, because 48% of buyers still go foriegn!!!....ugh!!! Who are the fools who drafted this up? Corker and Shelby?!?!?!

Originally Posted by DGthe3

Or at least divide it 3 ways. Cars produced by the big 3 and built in North America should get the most, those that are produced by others and imported should get nothing. The rest that are either 'captive imports' or 'transplants' should get 1/2 the deal.

Originally Posted by Dragoneye

The companies' country of operation/HQ and general profit-flow is still very much import/domestic. That's where my issue stems from...

Originally Posted by DGthe3

Very true. However, shouldn't governments help their own companies before they help foreign ones, regardless of the economic climate or the particular industry?

In theory, the first cities cropped up when people came together to protect the rights of the community. The barbarians who stayed out in the jungles, deserts, and forests were outsiders to the law.

In today's economy, each country is its own city. Outside contributions are more welcome than they were 6,000 years ago, but we fly our own nations' flags and take pride in our heritages.

The United States should protect its own economy before it protects its neighbors. It is just like those airplane pamphlets that tell you to put the mask on your face before the child next to you. You can't count on your neighbors to cover your back first, and it just makes more sense to cover your own. We can't all cover one another's back. There's no hard feelings in that.

To implement this policy, the US needs to protect major contributors to the US economy. From a policy policy perspective, there are 2 solutions to this predicament. The first is to invest in big business. The second is to invest in small businesses. Both are enormous contributors to the US economy, but small businesses are hard to justify helping. While you can cut one big check to Walmart and its buyers, you have to cut many checks to small groceries and their buyers. That costs manpower to pay for all the people accepting applications for the grants that would go to these small businesses.

That all assumes the money goes to the businesses. If the money goes to the people, then there's no application process, saving lots of money. It just goes to everyone, usually in the form of write-offs through the IRS.

Once again, it is important to consider where the money goes. Simply expecting Americans to spend money does not mean that people will do something with it to boost the economy. In fact, during hard times, people are far more likely to save their resources, further stifling the hopes for economic improvement. Free money must be guided in a certain way.

Cars are necessary. Encouraging people to buy cars is a good way to use the money. There are lots of other ways, but they are harder to gauge. Those other means are also necessities, like groceries. You can't write off groceries in the same measurable way, so I'll go ahead and commend the US Congress for making this call.

The last part of this analysis is to set the sights on what companies best serve America's interests. As I've said previously, it is impossible to count on another country to give the US money. To be more specific, it is impossible to count on another country giving tax breaks for buying American. Since there is no incentive to help others first by encouraging people to buy foreign, the US should be encouraging in investments that give all of their tax money back to the US government so that the government can continue to invest in its people.

Therefore, I agree that the US should be giving the money to US companies. These companies invest more in the US than foreign ones, regardless of what Subaru, BMW, Mercedes, Toyota, Honda, Nissan, Hyundai, or any other ads say about building factories here.

[Eighty-Six Z]

So how soon do you guys think this would go into effect (if it is given the green light)?

[diddiyo]

have we even heard any news about this after the first announcement or is it already gone and forgotten?

[Inspector 17]

I did some checking earlier and couldn't find anything new.

[Inspector 17]

Blur, I think the bill in question is this one: H.R. 385, The CAR Act of 2009.

[The_Blur]

Here it is.

The vehicle must be used in the United States. That is probably the stupidest regulation ever placed in a bill. Does Congressman Rogers expect it to be used by US citizens in Sweden?

The bill is in effect until 1 January 2010. Buy the car in 2009. That means that the down payment must be paid in 2009. Order early.

The vehicle must be a passenger vehicle or light truck. This apparently excludes large trucks, SUVs, and sport cars. Evidently, it only includes economy cars and trucks that fit 3 to 7 people.

I would like some understanding of the use of "depreciation" as an exception. Basically, explain this: "property of a character subject to the allowance for depreciation or amortization."

[Inspector 17]

Here's the link - http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.385.IH:

[The_Blur]

Originally Posted by camaropete

Blur, I think the bill in question is this one: H.R. 385, The CAR Act of 2009.

That does make a lot of sense. I'll edit my analysis. Expect a revised post in under 5 minutes.