Really, sometimes you just want to cry. - cathy
A Hummerdinger of a Tax Loophole?
Washington Post
By Al Kamen
Friday, September 26, 2003; Page A25
"Allow me to introduce you to a fabulous opportunity," Chris Thorpe, a
sales representative for Hummer of Alaska, writes in a promotion letter.
"A tax 'loophole' so big you could drive a Hummer H2 through it! Imagine
being able to purchase the #1 large luxury SUV in America today . . . and
receive a deduction for the entire purchase amount from your taxes this year!"
"How is this possible?" Thorpe asks. "Thanks to the Bush administration's
recent economic stimulus package, small businesses and the self-employed
are eligible to deduct the entire purchase cost of new equipment up to
$100,000 the year of the purchase." But these provisions are supposed to
help farmers and small-business owners buy equipment to transport
merchandise and haul stuff. No matter. "The Hummer H2 qualifies for this
IRS Sec. 179 deduction by its gross vehicle weight of over 6,000 lbs. Cars
and medium sized SUV's don't qualify for this deduction," Thorpe writes.
"If you are seriously considering acquisition of a new vehicle, step up to
the vehicle that can take you where you want to be, financially and otherwise."
So is this pitch working? Oh, yes. Since the letter went out in August,
Thorpe estimated his Anchorage dealership, the only one in the state, has
sold an additional 35 Hummers at $62,000 each. That's pumping serious
money into the local economy, a most substantial stimulus indeed.
Thorpe said he sold perhaps "nine in one month to doctors" who bought them
pretty much for the tax benefits. Local buzz is that they're mostly
leaving them in the garage, or their wives are driving them around.
Lawyers and small-business owners have snapped up the cars -- which get a
whopping 10 miles per gallon -- and, given Alaska's rough winters and
formidable terrain, no doubt will make great use of them this winter.
The same holds for the rugged wilds of Palm Beach, Fla., where
hard-pressed doctors and lawyers need huge gas guzzlers so they can get to
clients even during hurricanes. "When people are deciding what they're
going to take," a Hummer salesman told the Palm Beach Post recently, "they
go for the Hummer for the tax write-off."
Our deserving lawyers, doctors and small-business owners needn't settle
for a Hummer. They can shop around. Many SUV-makers -- the Big Three,
German and Japanese companies -- have similar 3-ton cars. We've been
looking at a lovely Porsche SUV, only $88,000, but may have to wait for
another round or two of tax cuts.
And energy independence from Mideast oil? So passe.
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