This announcement to U.S. “friends and allies” has probably been making the rounds, but please do watch it if you haven’t yet. (Thanks to GMB.)
Speaking of technical problems, I just lost a rant I was writing about the latest so-called “economic stimulus plan” put forth by G.W. Bush (read a decent critique here).
Another note about the administration’s tax proposal: it would be catastrophic for the states, according to Iris J. Lav of the Center on Budget and Policy Priorities.
Among other things, the proposed federal tax cuts would “force states to make additional budget cuts or raise additional taxes,” Lav said. “If these new tax breaks are enacted, states will be in the untenable position of giving unintended large tax breaks to some of their wealthiest residents while in many cases raising taxes on middle-income families and cutting programs for low-income households.”
Lav points out in separate articles that a wide range of services have already been cut in the current fiscal crisis and that the state budget deficits for 2004 are “huge and growing.”
Instead of creating more tax breaks for the wealthy, why not start by closing a loophole that allows SUV purchasers a massive accelerated depreciation deduction that costs the federal government more than $800 million annually? (See this summary of the Wall Street Journal coverage, a decent critique, and TBogg‘s commentary).
As originally envisioned, this tax incentive was “designed to give tax breaks to small business owners buying trucks for construction or farming. But the tax code was amended before the very largest class of SUVs — those over 6,000 pounds, existed.”
Now many tax advice sites are encouraging taxpayers to purchase massive SUVs for tax savings. See, e.g., Ask Tax Mama:
For cars bought after 9-11, luxury cars and other vehicles subject to the “cap” on depreciation, will be able to claim an extra $4,600 in the year the vehicle is placed in service, due to the extra 30% depreciation…
Note: When buying an expensive new car, you can avoid the luxury auto limitations on depreciation. If you want to be able to write off the full cost of your car over 5 years with a huge chunk ($24,000) in the first year (2002), look for cars that weigh over 6,000 pounds – i.e. 2002 Rolls-Royce Corniche is 6031 pounds at only $363,000; SUVs like the Ford Excursion; Toyota LandCruiser â€¦ This loophole also applies if you buy the vehicles used.