Latest budget makes interest on American made cars fully deductible.

[ripcord]

I just read that the latest budget bill will make interest on new cars manufactured in the United States fully deductible (up to $10k per year). Combine this with the CAFE Standards fine removal and the EV subsidy elimination and how do you see this changing the new car market?

This Motor Trend article discusses all three changes.

https://www.motortrend.com/news/how-the-one-big-beautiful-bill-will-affect-car-buying-and-ownership

 

[2strokeNorthstar]

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.

 

[rijndael]

The working class won't get above the standard deduction.

The SALT cap limit may change this a little.

 

[ripcord]

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.

Let's not get too political, but I think it will get a lot of middle class family's over the standard deduction threshold.

The SALT cap limit may change this a little.

It's not a state or local tax so that doesn't factor in

 

[ctechbob]

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.

 

[rijndael]

It's not a state or local tax so that doesn't factor in

I’m was referencing their ability to get above the standard deduction. Raising the cap makes it easier for them to itemize …

 

[GON]

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.

It takes a lot of work and savviness for the majority of Americans to "beat" the standard deduction.

One example, mortgage interest was always a big deduction. So many under three percent mortgages, mortgage interest is not long a big deduction for some people as it has historically been.

 

[ripcord]

I’m was referencing their ability to get above the standard deduction. Raising the cap makes it easier for them to itemize …

Doh. You're totally correct.

 

[benjamming]

bill is encouraging more consumerism...smh

 

[Rmay635703]

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.

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

 

[MHartfield]

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

Some of these deductions are in addition to the standard deduction. I'm fairly certain there's a $1,000 charitable deduction that's in addition to the Standard deduction. This should help a lot of people, maybe only $100-$200 in tax savings, but...

 

[CKN]

You can have any amount of deduction. The down payment and the monthly payment is still cold hard cash. The only benefits will be to the rich....

New vehicles are too expensive... period.

 

[ripcord]

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.

 

[Rmay635703]

Some of these deductions are in addition to the standard deduction. I'm fairly certain there's a $1,000 charitable deduction that's in addition to the Standard deduction. This should help a lot of people, maybe only $100-$200 in tax savings, but...

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)

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.

 

[CKN]

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.

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/

 

[ripcord]

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/

Why is it in other parts of the world you can buy a $15k base model HiLux but we can't?

 

[MNgopher]

Answer to that is easy: At that price, it doesn't meet safety or emissions requirements. It's not made in the USA and gets hit with a 25% chicken tax (been in place on light truck imports since 1963) plus whatever other extra costs will be added on based on which way the wind is blowing from DC at any particular moment but suffice to say it won't be zero percent. Try to move assembly to the US and now pay us labor rates to build it and won't be sub 20k either...

 

[ripcord]

Answer to that is easy: At that price, it doesn't meet safety or emissions requirements. It's not made in the USA and gets hit with a 25% chicken tax plus whatever other extra costs will be added on based on which way the wind is blowing from DC at any particular moment but suffice to say it won't be zero percent. Try to move assembly to the US and now pay us labor rates to build it and won't be sub 20k either...

That was my point. A huge amount of the increase in costs prices of new vehicles are due to the regulatory and tax environment.

 

[GON]

That was my point. A huge amount of the increase in costs prices of new vehicles are due to the regulatory and tax environment.

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.

 

[ripcord]

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.

My question is do we really need all those expensive and often frivolous regulations and requirements?