Reading the local ragsheet (it's not much of a paper)nd I see this headline:
"Bush would raise SUV deduction". It seems that the presidents economic stimulus package "would increase by 50 percent or more the deductions that small-business owners can take right away on the biggest sport utility vehicles and pickups."
President Bush is fighting a war on terrorism, Ariana Huffinton (and the new ads) are accusing those of use who drive these monstrous gas guzzling things terrrorists, and the president is helping us small business owners buy them.
What you're "missing" is the fact that Congressional members and DOT bureaucrats do not understand the real difference between a "passenger car" and a "truck", so the gerrymandering of the current definitions continues as it has for the last 35 years.
To bad President Bush isn't a car guy. If he was, he would realize the issues and the problems.
As usual, the media mavens confuse the issue by not using the correct terminology; although the net effect at the bottom line for a business owner is the same, it's not a "tax deduction", and the government isn't "paying for SUV's", as other articles and slow-newsday TV bits on the same subject have noted recently. It's an accelerated depreciation schedule for certain capital assets; the original intent of the legislation was to provide an incentive for business owners to buy new trucks (delivery trucks, pickup trucks, "working" trucks for their business) as an overall economic stimulus. This is not unusual, and there is LOTS of legislation that has set up accelerated depreciation schedules for many other specific types of capital assets to encourage early replacement of those assets instead of hanging onto them until they collapse of old age.
The authors of the Bill that set up this accelerated depreciation schedule obviously never consulted with DOT, EPA, or NHTSA when they wrote the detail language; it was intended to apply just to "working trucks", but the Feds classify anything with a flat floor as a "truck" (minivans, PT Cruisers, SUV's with folding seats, etc.), so anything the Feds classify as a "truck" is covered by the legislation, and that's how the IRS has to apply the rule. Legislation is virtually NEVER amended (it second-guesses and embarrasses the Congressmen and Senators who wrote it), so that's the way it is, and is likely to stay. Buying a capital asset is still a cash outlay at its full price for the business owner, but the accelerated depreciation is an accounting entry on the books over a period of years, not an instant check from the government (but it wouldn't be as "sensational" a story if the media explained it correctly). :nonod:
I realize the language is wrong. I agree that "The authors of the Bill that set up this accelerated depreciation schedule obviously never consulted with DOT, EPA, or NHTSA when they wrote the detail language' as you said I just found it funny that the Bill "reads" as President Bush pushing for sales of SUV's in the light of the "terrorist" ad flap.
Just saw the irony if I followed the story as an "if, then" scenario
The authors of the Bill that set up this accelerated depreciation schedule obviously never consulted with DOT, EPA, or NHTSA when they wrote the detail language; it was intended to apply just to "working trucks", but the Feds classify anything with a flat floor as a "truck" (minivans, PT Cruisers, SUV's with folding seats, etc.), so anything the Feds classify as a "truck" is covered by the legislation, and that's how the IRS has to apply the rule.
John - I'm not familiar with chapter and verse of the regs that distinguish a "passenger car" and a "truck". But if the basic criterion is the geometry of the floor behind the seating area, what's to keep an OEM from calling a sports car with a flat luggage space a "truck"? Both a typical pickup truck and a Corvette have a flat floor behind the seating area.
. John - I'm not familiar with chapter and verse of the regs that distinguish a "passenger car" and a "truck". But if the basic criterion is the geometry of the floor behind the seating area, what's to keep an OEM from calling a sports car with a flat luggage space a "truck"? Both a typical pickup truck and a Corvette have a flat floor behind the seating area.
Duke
I can't remember the exact detail, but as I recall, the language talks about having a flat floor (or seats that fold to provide a flat floor) from the driver's seating position all the way to the "rear loading opening", or something along those lines; there's a separate definition for pickups that deals with the box and passenger compartment as separate entities. I think this definition applies to anything with a GVW less than 8,500# (anything with a higher GVW is obviously a "truck" in the traditional sense).
:cheers:
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