Latest budget makes interest on American made cars fully deductible.

That was my point. A huge amount of the increase in costs prices of new vehicles are due to the regulatory and tax environment.
It's not THAT friggin huge. A $15k truck costs $40k here because we can charge it and people pay it. Toyota of North America loves the price delta. Mercedes of North America got us the "25 year rule" back in the 1980s to squash parallel imports, like service members bringing slightly used cars back from Germany.

TPMS "was" a huge regulatory expense when it came out, now sensors for my car are four bucks apiece, batteries included.

Crash testing? Engineers and computers set up the body structure and they use it world-wide.

Auto braking? Who asked for this? Why can't we be asked to pay attention to the road? Yet once they come up with a system it'll be scalable across the fleet-- it's a software thing on top of a couple cameras, radar sensors, and existing ABS module.

Go look at worldwide vehicle taxes and report back; the US is pretty easy as far as sales, excise, use taxes are concerned.

How is an American car defined? Crown Vics were Canadian. Parts Percentage labels indicate some surprises-- BMWs and Hyundais from the South have pretty good percentages.

Then there's the moral hazard that if you subsidize something it'll get pretty much that much more expensive all over again.
 
Well, "we" as in "I" would kinda like one of those ubiquitous and (relatively) cheap HiLux trucks you probably see driving all around the Philippines.
I thought "we" might mean lobbyists, barriers and restraints to trade, regulations that stifle competition. Select people and organizations have made wealth beyond belief by regulations and requirements.
 
Allow a partial deduction including rent and insurance and you could get over the hump, over half the population can’t legally itemize so most of these changes are gimmicks
Why should rent be deductible but not a mortgage payment? Anyone can legally itemize...it just doesn't make financial sense in many cases but the option is there.
 
I haven't been able to get above the standard deduction for years now. Maybe with the OT thing and car interest I can get there. We'll see.
Same boat, and our property taxes are reasonably high (PA). We don't have rental properties. We are buying an American car and it costs double what the last one did in 2011. But we're not borrowing money. Some of these so called "benefits" encourage spending and where. While it's not a bad thing to steer folks into buying American products, it is a bad thing imho to entice them into over spending, because that's not really hard to do. When one really thinks about it, why is buying an American car like asking an 8 yo to eat a Caesar salad?
 
Why should rent be deductible but not a mortgage payment? Anyone can legally itemize...it just doesn't make financial sense in many cases but the option is there.

does the owner pay tax on rent received? (it's tax free where I live, but not deductible by the renter).
 
Quote-
But the ugly undertone to this business has now surfaced in the form of 72- and 84-month payments, with an average retail price for vehicles pushing $50,000. And even more alarming? One in five new car buyers have signed up for $1,000 per month payments. Is this sustainable? No, of course not.

https://www.autoextremist.com/

Many people are impulsive and don’t care or think about their terrible spending habits.

Lots of cash poor people on social media trying to be someone they are not.
 
The question that come to mind is how is domestic auto manufacturing compete with nations that have different rules?

If the US has a regulatory manufacturing rule, environment rule, etc--- then the US should only allow importation of products that are manufactured under the same circumstances.

US should not put a domestic regulation in place for manufacturing, unless requiring imported products be manufactured under the same regulations.

What's good for the goose is good for the gander.
Yes. But you just blew up global trade if you do. That’s mostly the point and always has been.

No payroll taxes off-shore either.
 
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A little, apparently only 9% of the population has itemized starting in 2020, so things have REALLY changed since I last looked.

A very soft glove analysis (below) finds that due to the bills direct nature of passing many formerly subsidized costs directly to individuals the net affect could be meh for most and the bonus amounts are mostly eroded by increased costs (most not shown in chart) that are considered necessary to life.
The later analysis I could find (June 28) looked even worse but were not nice and tidy for presentation.

EX: A family of 4 could be on the hook for up to $10k a year extra costs depending on where they live and their income bracket. (And that isn’t the worst case presented by egg heads)

View attachment 288616

My guess is the bill will end up being exactly what it was proposed as being, a large cost of living increase on most by 2028, with a tax cut that slightly reduces the hit, with unknown/unexplored funding cuts, it will take months before better numbers are ran.
Because states pile on in random ways the federal element will have downstream affects on local and state taxes as well that won’t be understood until budget cuts fed to states start to show up in peoples state taxes.

2017-2020 my actual taxes paid went up every year. I don’t expect this time to be any different.
I have seen your chart and it’s politically baked. Notice it says “and transfer income” The bottom two quintiles are loosing welfare and Medicare benefits. So it’s really a different issue. It’s not about tax deductions - those two quintiles pay virtually no income tax.
 
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Well to do people buy new cars. I think this is kinda axiomatic. That still is good for everyone else, though. More new cars American made cars means more wages for auto workers and bigger 401k's for the rest of the country and a bigger supply of used cars.
Most of the new cars that I used to see on base (and in my apartment complex/neighborhood) were bought by people who weren’t well to do. They were the least able to afford them but they bought them because “they could make the payment”.

Really well to do people lease, because their company pays for it, or they buy used cars - in some circles, an old Volvo wagon or classic Mercedes is a status symbol.

Most new cars are bought by the middle class, not the wealthy.
 
Why is it in other parts of the world you can buy a $15k base model HiLux but we can't?
Because in other parts of the world many people pay cash or you have to be very well qualified for a loan if that is even possible.

Bottom line, mostly only in America are people like rats, willing to enslave themselves with 5,6,7,8 year loans for stuff they should not buy and these loans are now at around $1000 a month and 7 plus years. Its amazing.
They cannot resist saying no to options and the manufacturers give them what they want at a massive markup.

Its a corporate world, they got the masses brain figured out on how to get them to buy (that is a truthful fact)
 
The NEW standard deduction is well above our itemized, especially with the senior boost.

YES. I've no need to yank out more than $150K (well less plus income) and RMD is moving out.

I only have one word for this: WINNING.
 
Depends on how it works. Hope it's not another Tax break for the rich/mildly rich. The working class won't get above the standard deduction.
My takeaway (from Kiplinger newsletter) is that the new vehicle interest deduction is applicable without Sched A itemization. My family's Married Filing Jointly senior citizen Std Deduction has increased to $46,700. for TY 2025, I hope to advantage that. Recall that the WH statement "No Tax on Social Security" is NOT TRUE. Effectively paying no tax on benefits and the elimination of the Provision Income calculation for those retired and collecting benefits is not be conflated.
 
I can't help but think this won't make a push into the same arena that it did for college's with student loans (Yes I know its not 1:1 but I think the incentives are misaligned ... personal opinion). I.e. car prices being subtly pushed up withe the loan deduction making more people believe they can "afford" a new car or larger car.
 
Because in other parts of the world many people pay cash or you have to be very well qualified for a loan if that is even possible.

Bottom line, mostly only in America are people like rats, willing to enslave themselves with 5,6,7,8 year loans for stuff they should not buy and these loans are now at around $1000 a month and 7 plus years. Its amazing.
They cannot resist saying no to options and the manufacturers give them what they want at a massive markup.

Its a corporate world, they got the masses brain figured out on how to get them to buy (that is a truthful fact)
It is rather unique to buy something with cash and to be reprimanded 😂

For example, why would anyone have cash when it’s only earning 3.6%? Putting the funds in the stock market makes way more then 4.09% which is a car loan at our CU today.

I don’t do that because it’s leverage. Just like I don’t think savings should be spent on a luxury car. Winnings are for a luxury car. So the 2007 and 2025 new cars are from stock market gains. Leverage when I was single made me feel really good on up days, and really bad on bad days. Shorting which I did try and is a never do that, was like skinning one’s knuckles. Very exciting, and very stressful.

There are also necessities. If someone said they got an entry level car, bought a Chevy or Ford, financed it, by all means deduct the interest it’s a good gesture to allow it. No biggie but don’t borrow based on a change to the tax code imho

Lastly I thought leasing meant you can pretty much drive a car you might not be able to afford easily, for a low monthly. Our new car on the website is showing as $1500+/mo with an ultra low mileage lease. How does that make any sense. I’m thinking in this case, unfavorable terms can’t be disguised. I’ll get a screenshot and edit and add a pic

Edit without changing anything, here is our exact build, and what shows up on the Chevy website for finance and lease. Also expanded to show the lease assumptions


IMG_0377.webp

IMG_0378.webp
 
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Most of the new cars that I used to see on base (and in my apartment complex/neighborhood) were bought by people who weren’t well to do. They were the least able to afford them but they bought them because “they could make the payment”.

Really well to do people lease, because their company pays for it, or they buy used cars - in some circles, an old Volvo wagon or classic Mercedes is a status symbol.

Most new cars are bought by the middle class, not the wealthy.
I am not saying this is good thinking-but here is the rationale for what your are seeing-
"I'm am never ever going to be able to afford a home, because the prices are through the roof. In some cities you can't qualify for an average home if you make a $150,000/year. So-I might as well drive a nice vehicle. That's my splurge."
The guys on here who say-"just get a second job" to afford a house are beyond delusional.
 
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