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Congress Cuts Tax Breaks For New-Vehicle Purchases In Stimulus Bill

Posted in auto industry, Car Buying, Cars, Legal, New Cars, Newsworthy by Suzanne Denbow | February 12th, 2009 | Leave a Reply |

Speaker of the House Nancy Pelosi and House Majority Leader Rep. Steny Hoyer (D-MD) speak about the stimulus package in Washington, DC, February 11, 2009. U.S. lawmakers reached a compromise deal on Wednesday on a $789 billion package of tax cuts and spending to rescue the ailing economy and votes could begin as early as Thursday.

Today, White House mouthpieces released statements updating the latest revisions to the billion dollar stimulus bill. As per the tentative terms of the bill, tax breaks for new-vehicle purchases will be significantly scaled back and the total budget allowance provided for such a program will be reduced from $11 billion to $2 billion. Individually, those figures translate to about $300-$600 in tax deductions for the average new-car buyer. Originally, auto industry lobbyists had called for allowing auto loan interest fee as well as sales and excise taxes to be eligible for federal deductions, but members of the House balked at the huge expenditures. Mercifully hesitant to rack up the federal tab on the taxpayer’s dime, House-Senate negotiations revised the bill to allow only sales and excise taxes to be deducted.

Although the stimulus package has yet to be finalized, sources expect Congress to cast an approving vote by as early as Friday.

Source: Auto News
Image Cred: Reuters Pictures

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