Stop Proposed Tax Cut for SUV Purchasers|
2003-02-10, 5:13 p.m.
At a time when America should be focused on reducing our dependence upon oil and embracing renewable energy resources, President Bush has proposed tripling the tax deduction that small business owners can take on the largest sport utility vehicles (SUV's) and pickups. This proposal would encourage small business owners to buy the largest, most gas-guzzling vehicles, as they would be able to take the entire deduction in one year rather than over the course of a few years, as is the case with passenger vehicles and smaller sport utility vehicles. It's extremely irresponsible and should not be implemented.
According to an example provided in a recent New York Times article, a small business owner purchasing a Hummer H1, one of the largest and most expensive SUV's, could deduct $75,000 of the base sticker price of $102,581 in the first year alone. Additional deductions would add up to $12,135 for a total of deductions of more than $87,000, which would provide approximately $33,500 in savings in federal taxes alone for buyers in the highest tax bracket.
In comparison, deductions for cars and small SUV's allow for a business to deduct no more than $7,660 for a car in its first year of service, $4,900 in the second year and less in the following years. The Toyota Prius, a gas engine electric motor hybrid, is eligible for an additional $2,000 clean vehicle deduction. That means a business owner could deduct under half of the $20,500 sticker price of the Prius in the first year of purchase, for about $3,700 worth of federal tax savings for those in the highest tax bracket, almost one tenth of the tax savings as the Hummer H1.
A Hummer H1 averages 13 miles per gallon (mpg) in city driving and 17 mpg on the highway. A Prius averages 52 mpg in the city and 45 mpg on the highway.
In addition, Taxpayers for Common Sense (TCS) estimates that the current deduction cuts tax revenue $1 billion for every 100,000 SUV's. This is a tax break we cannot afford.
Our government should be encouraging Americans to reduce their reliance on fossil fuels and to support more environmentally-conscious choices, such as buying hybrid cars, rather than encouraging us to buy vehicles that use two to three times as much gasoline as other available more environmentally-friendly choices.
Call to action
"Let us rise up tonight with a greater readiness. Let us stand with a greater determination. And let us move on in these powerful days, these days of challenge to make America what it ought to be. We have an opportunity to make America a better nation." - Martin Luther King, Jr.