26 Votes

Should Our New President's First Task Be A Federal Tax Deduction For Car Loans?

Agent009 submitted on 11/5/2008 Official Bell & Ross Timestamp: 9:52:48 AM

44 user comments | Category: Misc News | Source: | SOURCE: www.bloomberg.com

Toyota Motor Corp and Chrysler LLC said federal income-tax deductions for interest on car loans could help stem the slide that sent US sales to their lowest monthly total since 1991.

General Motors Corp the biggest U.S. automaker also said today it had studied the idea of boosting auto demand through a government-backed program to encourage scrapping older vehicles.

The companies floated the ideas after posting October sales totals that GM called the worst since 1945. While the automakers said they hadn't actively lobbied for such changes, the calls added to mounting pressure for government aid as GM pursues a merger with Chrysler.

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Should Our New President's First Task Be A Federal Tax Deduction For Car Loans?

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"If everything seems under control, you're just not going fast enough."
— Agent009 (View Profile)

User Comments

Forget car loans, people don't need to get in debt anymore. Can't afford it, don't drive it.

His first task should be to give back all those trillions the govt. profited from those last 8 months of super high gasoline prices. If not, he should delegate those cash be form the new social security system since their ain't no money left in the current system for millions to retire on.
— Badgewhore (View Profile)

Posted on 11/5/2008 10:19:02 AM | reply to this comment | Votes: 2

i agree

if you cant afford, you shouldnt be looking into it, but just looking at it when it passes you by
— KZ258 (View Profile)

Posted on 11/5/2008 4:10:36 PM | | Votes: 4

Seriously Now...

Our country has far bigger fish to fry than this!

In time, these issues can be addressed, but for now, they can wait.
— DaHarder (View Profile)

Posted on 11/5/2008 10:28:48 AM | reply to this comment | Votes: 4

Yes!It would help a hurting industry.They use to let you write off the interest.That would really stimulate sales.
— truthpursuit (View Profile)

Posted on 11/5/2008 10:32:27 AM | reply to this comment | Votes: -6

Finally a voice of reason!
— Agent009 (View Profile)

Posted on 11/5/2008 10:53:07 AM | | Votes: -5

you do not know what your talking about lol
— KZ258 (View Profile)

Posted on 11/5/2008 4:13:57 PM | | Votes: 0

At best, this would provide a mild boost to the industry. In order for someone to deduct auto interest, they would have to be able to itemize. Many taxpayers don't itemize because the standard deduction is more than they can come up with by adding up every little deduction. The only consumers that would benefit would be homeowners (who have a hefty mortgage interest deduction), and I would imagine most homeowners are a little scared to go into debt right now. I don't think this plan does much.

Second, as many have said, the government shouldn't be encouraging people to take on more debt (especially for a depreciating asset).

Interesting topic, however.
— tundrahq (View Profile)

Posted on 11/9/2008 8:43:18 AM | | Votes: 0

Absolutely not...
First of all, a car purchase is a discretionary consumer purchase which should not be subsidized by the govt.

Secondly, if the govt gave people a tax break on car loans, because of our high rate of govt spending, that money would have to be obtained somewhere else - i.e. an offsetting tax would need to be identified, so the net effect would be 'zero'.

Third, these car companies have only themselves to blame for their predicament - govt should not be used to bail out the incompetent people running these auto firms.

Fourth, such a break would just encourage the same irresponsible behavior that created this problem in the first place.

People should buy what they can afford. Sorry.
— nybimmer (View Profile)

Posted on 11/5/2008 10:59:28 AM | reply to this comment | Votes: 5

Nybimmer- An transportation is NOT a discretionary for all areas. Sure in NY City with an extensive public transportation system this is academic. In many other systems the infrastructure is not as well established.

I live in an are of about 5 million people, yet I still have to drive almost 10 miles to the closest train and bus service to that same station is almost 6 miles away.

In this case a car becomes more of a necessity than a discretionary purchase.

Now the TYPE of car you choose IS discretionary to a degree.
— Agent009 (View Profile)

Posted on 11/5/2008 12:01:13 PM | | Votes: -3

"Now the TYPE of car you choose IS discretionary to a degree."

exactly

If someone has an oldish car and not a bunch of money, they should just drive the one they have.
— chewy (View Profile)

Posted on 11/5/2008 12:44:29 PM | | Votes: 6

Agent 009 - a car is a totally discretionary purchase - if you need one, you see what you can afford and you buy it (or finance it) if you can't afford a car, you'd better live in an area with lots of public transport. Even in LA, those without cars (and those without driver's licenses) take the bus.

As a contrasting example, food or clothing are not discretionary purchases. If a car is truly a necessity, buy a cheap used one - there are lots around.
— nybimmer (View Profile)

Posted on 11/5/2008 3:22:54 PM | | Votes: 1

If only most americans thought the way nybimmer does the world would be a much better place.
If you can't afford a car, live in an area where public transportation is much more available.
Beggers can't be choosers.
And if you do buy a car then take your time to learn the market and all the cars in your price range and if your tight on budget you get the most affordable car.
— zorbeeze (View Profile)

Posted on 11/5/2008 5:56:06 PM | | Votes: 1

If only most americans thought the way nybimmer does the world would be a much better place.
If you can't afford a car, live in an area where public transportation is much more available.
Beggers can't be choosers.
And if you do buy a car then take your time to learn the market and all the cars in your price range and if your tight on budget you get the most affordable car.
— zorbeeze (View Profile)

Posted on 11/5/2008 5:56:23 PM | | Votes: 1

If only most americans thought the way nybimmer does the world would be a much better place.
If you can't afford a car, live in an area where public transportation is much more available.
Beggers can't be choosers.
And if you do buy a car then take your time to learn the market and all the cars in your price range and if your tight on budget you get the most affordable car.
— zorbeeze (View Profile)

Posted on 11/5/2008 5:56:28 PM | | Votes: 1

"And they just keep on crying! What was it that brought on this financial crisis in the first place?! OHH... I know - indebted people... And now they think the solution is to loan them even more money!?! Now that is alternative thinking for you!"

That's why america voted for change and not same McCain.

Demand for oil has declined dramatically and car sales are an all time low despite low pump prices. America is choosing to change, not go back to driving the same lame mindset.
— Badgewhore (View Profile)

Posted on 11/5/2008 3:04:51 PM | reply to this comment | Votes: 0

Whatever you do, don't buy an American car!
— EL34 (View Profile)

Posted on 11/5/2008 11:15:58 AM | reply to this comment | Votes: -4

damikco-

We're worried about the economy, well that just too bad.

Do not buy an American car!

Buy the Nissan Maxima and not the ugly Ford Taurus.
— EL34 (View Profile)

Posted on 11/5/2008 11:33:58 AM | | Votes: -3

This is not EL. Someone stole his username and password!!!! Cant be EL
— 0to60 (View Profile)

Posted on 11/5/2008 5:31:58 PM | | Votes: 1

This is DOA. Obama wont go there.
— freeagent (View Profile)

Posted on 11/5/2008 11:18:05 AM | reply to this comment | Votes: 1

Absolutely not. Giving incentives to take out loans will only further the trouble our economy is having now. The Fed made it simple for people to get mortgages and look what happened. Just like a person earning $30,00 a year shouldn't buy a house in the Hamptons, that same person should not be given a loan to purchase a Quattroporte. Instead of a circus of foreclosures, it's going to be a circus of repossessions. If anything, Obama should encourage fiscal responsibility in an effort to rebuild personal capital and stabilize our economy.

— Sarcastic1 (View Profile)

Posted on 11/5/2008 12:04:36 PM | reply to this comment | Votes: 8

don't forget the first factor is the person buying the car with a loan must be able to quality fort it. That is where you can enforce the credit worthiness.

The economy needs these big ticket purchases to keep moving forward. Without these types of purchases you start leading to layoffs (duh) and then curtailed spending by cash strapped consumers and a cascade effect begins to manifest itself.

The real problem is that hundreds of thousands of people that never should have been given large amounts of credit were. Credit is a good thing however it MUST be used responsibly.
— Agent009 (View Profile)

Posted on 11/5/2008 12:13:24 PM | | Votes: -3

009 - perhaps you'd flail a bit less , if you'd stay away from economic topics when making posts on the site. Financial/economic topics are really not your 'sweet spot'. Cheers!
— nybimmer (View Profile)

Posted on 11/5/2008 3:26:26 PM | | Votes: 2

Well the logic here is it encourages the consumer to make a purchase very similar to the tax break afforded to hybrid owner at first.

The second is it injects capital into the economy in the form of a big ticket item, that fuels the wheels of the economy.

Pretty simple and effective as a short term solution.
— Agent009 (View Profile)

Posted on 11/5/2008 4:17:43 PM | | Votes: -1

Absolutely not. Giving incentives to take out loans will only further the trouble our economy is having now. The Fed made it simple for people to get mortgages and look what happened. Just like a person earning $30,00 a year shouldn't buy a house in the Hamptons, that same person should not be given a loan to purchase a Quattroporte. Instead of a circus of foreclosures, it's going to be a circus of repossessions. If anything, Obama should encourage fiscal responsibility in an effort to rebuild personal capital and stabilize our economy.

— Sarcastic1 (View Profile)

Posted on 11/5/2008 12:05:14 PM | reply to this comment | Votes: 3

Finally, a voice of reason!
— Need4Speed (View Profile)

Posted on 11/5/2008 12:51:14 PM | | Votes: 3

I said the same thing and was deboosted, it's got to be by a republican. lol
— Badgewhore (View Profile)

Posted on 11/5/2008 3:07:48 PM | | Votes: 2

no....who even suggested this immensely stupid idea?
— enthusiastx11 (View Profile)

Posted on 11/5/2008 12:32:05 PM | reply to this comment | Votes: 2

Probably a Republican
— Need4Speed (View Profile)

Posted on 11/5/2008 12:52:29 PM | | Votes: 0

Actually GM, Ford and Toyota...
— Agent009 (View Profile)

Posted on 11/5/2008 4:18:10 PM | | Votes: 2

What a stupid idea!!

Hey, you're in debt, get in more debt!
— Rupert (View Profile)

Posted on 11/5/2008 1:19:52 PM | reply to this comment | Votes: 4

What if you weren't in debt and were credit worthy. But you are a bit worried about the overall outlook. This might encourage you to make the purchase now when it is needed the most for the economy.
— Agent009 (View Profile)

Posted on 11/5/2008 4:19:33 PM | | Votes: 0

Right on sailor. Just bought my 08 BMW at .9% interest through BMW financing. The money ain't staying to help the US economy, whatever little money they made from .9% is already washed out by the "below invoice" price they sold the car for is going right back to Germany.

I didn't help the economy, I helped myself. I sound like a republican, LOL.
— Badgewhore (View Profile)

Posted on 11/6/2008 1:54:52 AM | | Votes: 1

The car manufacturers have sold probably a million or more cars to people in the last five years who shouldn't have been granted finance for the purchase. The manufacturers have profited from those sales (or at least reduced their losses) and shouldn't now be bailed out. To do so would be to reward the idiots who bought cars they clearly couldn't afford and the manufacturers who encourage it just to shift cars from inventory. The best bail out for U.S. manufacturers is to get them someone in charge who can build a car people actually want to pay for, as opposed to crap cars that they have to massively discount to be competitive.
— bitschaser (View Profile)

Posted on 11/5/2008 6:29:06 PM | reply to this comment | Votes: 0

No, the President past or future should not give out tax dedcutions for car loans...that's what leasing and a good accountant are for.

Second, indebted people didn't cause this crisis, the fools running those companies did for a quick buck and it back fired big time, quite like some of these high APR % rate credit card companies.

How else can people get paid millions of dollars and not just in stock options?

Last I checked, the home buying process is still as long and intense as getting top secret clearance at the DOD, hell I think they even want your first born.

http://thinkprogress.org/2008/10/23/mica-waxman/
— 610looper (View Profile)

Posted on 11/5/2008 11:26:03 PM | reply to this comment | Votes: 0

We had this years ago while Jimmy Carter was President. People could deduct thier car loans. Good Olde Ronald Reagan took this away from us, Big Government at its best, tell people how to run this budgets and how to live.

Many of us in sales have to buy new cars for a compnay and drive 30,000 miles per year, without any depreciation or tax relief, all this after paying $3,000-$4,000 in sales tax when You buy the car, then the huge cost to register and insure it.

I'd like to see a deduction for the full purchase price on the car if you buy AMERICAN.

Why is it that only business owners are allowed to have this deduction for thier automobiles?

Lets extend this to everyone, especially those who have to take out loans to provide thier own company car that companies now demand to reduce thier costs. As a worker, I'd like to reduce my costs as well.
— mercuryguy (View Profile)

Posted on 11/6/2008 10:30:26 AM | reply to this comment | Votes: 1

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Should Our New President's First Task Be A Federal Tax Deduction For Car Loans?

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