<blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">I don't think so. I'm railing against giant SUV owners because they drive giant SUVs, so they are by definition all guilty. For example, I can condemn the group "child abusers" because they are all "bad apples" under the criteria I set up for evaluation. Of course, driving an SUV isn't that bad, but you get my point.<hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">IMO, that's apples and oranges my friend. Child abuse is against the law, owning and driving a SUV is not (unless, of course, you violate roadway weight limits). Until then, lumping people into a group and judging by YOUR own criteria, rather than society's legally established criteria some would argue, IS discriminatory plain and simple. SUV owners today, anybody south of the Mason-Dixon Line driving DP G35 sedans tomorrow? Of course, driving an DP G35 sedan isn't that bad, but you get my point.
The business equipment deduction did not start in 2003, it started in 1984. Since that time I have utilized the deduction numerous times. What happened in 2003 was an increase in deduction limits to an existing self-employed business expense provision. From Hot Foot's Loophole Info link: <blockquote id="quote"><font size="1" face="Verdana, Arial, Helvetica" id="quote">quote:<hr height="1" noshade id="quote">Its roots can be traced to 1984, when the Internal Revenue Service classed three-ton trucks and larger as deductible business equipment. Of course, this was back when such vehicles were, in fact, workday necessities for farmers and contractors.
In 1997, well into the SUV era, the class of "business owner" entitled to take such deductions was broadened to include pretty much anyone claiming some self-employment income. The maximum deductible amounts, however, were much lower -- $18,000 in 1997, rising to $25,000 in 2003.
That's what changed last May. The deduction limit was raised to $100,000 as a way to stimulate business-equipment sales; despite an outcry from environmental and taxpayer groups, efforts to exclude SUVs went nowhere. And so the biggest SUVs acquired yet another undeserved advantage over other vehicles -- including those that are actually used for business purposes. A self-employed consultant or small-business owner who buys a sedan or minivan or under-three-ton truck this year can write off only a little over $10,000, and has to spread the deduction over five years.
Senate committees made efforts to correct this absurdity, without avail. House Republicans refused to accept corrective language in their horrible energy bill, pledging to deal with the matter separately. <hr height="1" noshade id="quote"></blockquote id="quote"></font id="quote">It's very clear that the real problem exists because the tax code defines industrial vehicles by weight instead of function. The parameter that the vehicle must be over 6,000 pounds fit the original intent of the legislation to help small family farmers, business needing small trucks, etc. - and still does. Obviously, while there are a handful of SUV owners who qualify and claim the deduction for their SUV, any implication that the vast majority of large SUV owners are getting 'free' vehicles because of the increased limits is crazy. SUVs still have to qualify for the business use deduction...the exact same qualifications any other vehicle placed into service by businesses must meet. And, you can be certain that the IRS is taking a *very* hard look for abuse at anyone who has claimed the deduction. No doubt in my mind, claim that deduction and you WILL get audited.
In a twisted bit of irony, however, leaving it as is may actually be BETTER. If a small business owner can buy and use a SUV rather than a larger, heavier commercial truck for business, because he can use also it 49% for personal use as well, it may totally eliminate the need for another household vehicle. That conserves resources necessary to build and maintain another vehicle, surely a good thing! Speaking from the perspective of a small business owner with limited capital, I still don't think it is as big an incentive for me to rush out and buy a $45k SUV than it is to buy $100k of other business capital equipment my company may need to expand and grow.
Yes, like many tax 'loopholes', it may be considered hypocrisy and rub us wrong. Maybe it should be plugged with a change of definition in the tax code. But, IMO, much more important and long-term benefits would come from a change in the CAFE classifications. That would force heavy SUV fuel efficiency standards that are currently non-existant. Regardless, I firmly believe that the limit increase has done MUCH more good for everyone thru it's overall stimulative effect, than harm because of the SUV loophole. And yes, that WAS the original intent of the law although, once again, some of which seems to have gotten lost in the subsequent changes courtesy of our gov't politicos. So what else is new, right??
2004 | 6MTs | Diamond Graphite/Graphite
Upstate NY