Parliament of Whores
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SUV tax break

From Union of Concerned Scientists  {mainly about the environment).  They organized a signed petition with over 62 preeminent scientists including 19 Nobel laureates, 20 National Medal of Science recipients, and others released a statement title Restoring Scientific Integrity in Policy Making on February 18, 2004, in which they charged the Bush administration with widespread and unprecedented manipulation of the process through which science enters into decisions. 

For an extract of that article with a link--enjoy.

 

http://www.ucsusa.org/clean_vehicles/cars_and_suvs/page.cfm?pageID=1280

This page was last revised 4/22/5 by UCS.

SUV tax loophole widens
A 1997 provision in the U.S. tax code (Section 179) provided small businesses with a tax write-off of up to $25,000 for a vehicle weighing more than 6,000 pounds- used 50% of the time for work purposes. The original intent behind this provision was to encourage investments in pickup trucks, minivans, and other needed service vehicles. A far smaller incentive was provided for cars—less than $7,000 over two years.

 

The explosion of SUV, pickup, and minivan sales in America’s passenger vehicle fleet has turned this small business benefit into a massive loophole in the tax law. Currently, 38 different passenger SUVs including the Lincoln Navigator, which nets a combined 15 miles per gallon according to the Environmental Protection Agency (EPA), the Cadillac Escalade (16 mpg), the BMW X5 (18 mpg), the Mercedes-Benz ML55 (16 mpg), and the notorious Hummer H2 (estimated 11 mpg) all weigh more than 6,000 pounds. This loophole allows some of the least fuel-efficient passenger vehicles on the road today to qualify for a significant tax break.

In 2003, the Bush administration proposed increasing the tax deduction to $75,000. Lawmakers responded by expanding it to a whopping $100,000 as part of the $350 million tax cut package. Yet Congress did not change the weight-based classification of the vehicles, creating a huge benefit for the largest, least efficient vehicles.

Accountants, SUV dealers rush to capitalize
Around the country, auto dealers such as "the Car Guy" Jerry Reynolds in Texas and hundreds of accountants and online tax management sites have been encouraging small business owners such as doctors, lawyers, and realtors to rush out and take advantage of this tax windfall. One advertisement from Dugan & Lopatka, an accounting firm in Wheaton, IL, reads, "Write-Off 100% of Your New SUV? Yes, If It’s Under 100,000!"

According to a November 7, 2003, article in the Washington Post, Dugan & Lopatka were so inundated with phone calls regarding their advertisement they nearly had to shut down their switchboard. Industry analysts predicted a spike in purchases last November and December due to the typical year-end rush to claim the deduction for tax returns.

Senators push for closure of loophole
Several proposals have been offered to fix the loophole, at one point, the Senate Finance Committee staff actually proposed raising the weight limit to 14,000 pounds, enough to disqualify even the Hummer. Bills introduced by Senator Barbara Boxer (D-CA) and Representative Anna Eshoo (D-CA) would take a different approach to closing the SUV tax loophole. In The SUV Business Tax Loophole Closure Act, they propose that SUVs weighing 6,000 pounds or more simply be reclassified as cars under the tax code.

In October 2004, after the House Ways and Means Committee approved a three-year extension of the $100,000 loophole, a House-Senate conference committee negotiated a roll back in the deduction to its original amount of $25,000 as part of the larger Corporate Tax Bill. While tightening this loophole is certainly noteworthy, it is by no means the end of significant tax breaks for gas-guzzling SUVs.  According to an analysis in the Detroit News, besides the $25,000 basic equipment deduction, SUVs will still qualify for "bonus depreciation," an added write off of 30 percent of the purchase price above $25,000. Beyond that, additional costs can be deducted according to regular depreciation rules, or 20 percent in the first year.  For example, a business owner purchasing a Hummer H1, with a sticker price of $106,185, would be able to deduct $60,722 in the first year under the revised rules: a $25,000 equipment deduction, $24,356 in bonus depreciation, and $11,366 in regular depreciation.

Hybrid vehicle credits & The CLEAR Act

In May 2002, the IRS declared gasoline-electric hybrids eligible for tax deductions as "clean fuel" vehicles under the Energy Policy Act of 1992 (PL 103-486). The deduction ceiling began at $2,000, with the tax deduction set to end in 2006, with $500 less available each year as the deduction is phased out.

 

UCS has been working with a bipartisan group of senators and representatives to develop a comprehensive package of tax credits for the purchase of a full range of alternative-fuel and advanced-technology vehicles. This package was introduced by Senators Orrin Hatch (R-UT) and Jay Rockefeller (D-WV) and Congressman Dave Camp (R-MI) as the CLEAR Act in March 2003. Improving on current tax law, these incentives are designed to be performance-based, ensuring that credits go to vehicles that get significant fuel economy and low tailpipe emissions.

The CLEAR Act passed the Senate Finance Committee with strong environmental provisions intact, but unfortunately, the House dramatically weakened the bill by removing the hybrid tax credit and replacing it with a credit for diesel vehicles. If and when a final version of federal energy legislation emerges it could contain some form of these tax incentives. UCS will continue to push for performance-based tax credits that will help make the cleanest vehicles more affordable.

As a stopgap measure, Congress recently extended the existing federal tax deduction at the original $2,000 level for fiscal year 2005. After this, the tax deduction will reduce to 75% and then phase out in 2006 as passed in the Working Families Tax Relief Act of 2004. While this extension will certainly help continue the promotion of hybrid technologies, it has neither the duration nor the environmental performance criteria contained in CLEAR Act language. 

Bad tax breaks are a fiscal waste and send the wrong environmental message
While Congress takes small steps back-and-forth on hybrid vs. SUV tax breaks, the U.S. market has shown what course U.S. policy should take, as Toyota Prius sales recently passed the Hummer H2. Given the pressing environmental and oil security issues America currently faces, wasting taxpayer money on incentives for vehicles that contribute to both problems simply does not make sense. Fully correcting that loophole and embracing a broader investment program committed to bringing more advanced, economical, and environmentally friendly vehicles to market would be a far wiser course of action.

 

This article belongs here (in PARLIAMENT OF WHORES) because instead of farsighted-public service, they Congress with the President are paying back the corporate powers that make their election possible.  Bush requested a $75,000 tax break, and got a $!00,000 for the least fuel-efficient vehicles.  If incentives had continued for oil efficiency, oil would still be under $40/ barrel.  This not only means that Americans have less money for trinkets and medical treatments, but that the poorest nations have less for basic sanitation, medical clinics, and education, and their citizens have less for necessities.    

If there lips are moving they are lying.  


The one thing you can be sure that they stand for, is to get elected.

 

If there lips are moving they are lying (said of politician)
 
 

To understand developments in our political system (both parties) one must understand the role of neoliberalism.  Any analysis which misses this connection is grossly inadequate.  (Neocons follow neoliberalism economic policies). 

 

We have an evil, evil system. Words such as imperialism, greed, corporate greed, neoliberalism, neoconservate, globalism, bought politicians, control of media are descriptive.   There are reasons why the labor movement has collapsed.  It is the politics of neoliberalism, an out growth of corporate greed.  Given how it opposes the public weal, we have devoted a section to expose just what neoliberalism is—a thing that the five corporations which own broadcasting will not do. 

 

THE BRINK OF ECONOMIC COLLAPSE

Things have gotten worse, the hole the neocons has dug is much deeper.  The economic stats are worse than bad:  the trend is toward greater disparity of wealth and on top of that the U.S. is loaded with debt and imbalance of trade.  The debt can through fiscal austerity can be paid off (as some of it was under Clinton), but the trade imbalance will only grow due to the dismantling of are industrial base and the setting up of free trade agreements such as NAFTA.   The current foreign debt is equaled to over 70% of GDP, a ratio unmatched by far among industrialized nations.  To find out what economics is called the dismal science and the role of neoliberalism.