There is some confusion out there, but it appears that Cash for Clunkers is taxable. So if you make about $40,000 you only really saved $2400 or so on the max incentive, and have to pay about $1900 - $2000 you didn't expect come April.

 

Thanks Uncle Sam!

To tax them is the fair thing to do however this comes as a surprise to most people. The administration should have made this clear. The media should have as well but they were too busy cheerleading.

That is hardly the most scathing criticism you could make of this program.

 

 

There are criticisms that you would make that are not what I would make, and there are ones that you and I would agree with that are not going to be popular. This one however is one that most folks, regardless of their opinion on the concept of the CARS program, will agree with.

 

To tax them is the fair thing to do however this comes as a surprise to most people. The administration should have made this clear. The media should have as well but they were too busy cheerleading.

 

 

How is taxing money from the government a 'fair' thing to do.

 

The money comes from the Federal Budget, to then take a portion of it back into the budget later merely creates an accounting cost for the Federal Government for no reason. It should have been a lesser non-taxable amount and save at least the processing costs on paying it back. It is also a surprise which will harm the people that took advantage of it.

 

It is things like this that make a Federal Sales Tax a better option than an income tax. The Government pays its employees out of the budget and then has to process some of that money back into the budget, incurring a massive cost in the process. The government hands out benefits, and then taxes them, also incurring a massive cost. It is assinine!

The difference between the rebate and the fair market value of the clunker should be taxable income because it's essentially a gift from people who pay taxes but it looks like they'll get screwed if they make the entire amount taxable. This will be a nightmare for some people.

There is some confusion out there, but it appears that Cash for Clunkers is taxable. So if you make about $40,000 you only really saved $2400 or so on the max incentive, and have to pay about $1900 - $2000 you didn't expect come April.

 

Thanks Uncle Sam!

 

I have not heard this anywhere. Source?

There is some confusion out there, but it appears that Cash for Clunkers is taxable. So if you make about $40,000 you only really saved $2400 or so on the max incentive, and have to pay about $1900 - $2000 you didn't expect come April.

 

Thanks Uncle Sam!

 

I have not heard this anywhere. Source?

 

It's a distortion, typically created by right wing talking heads, and spread by the followers. There is no federal tax. It's a myth. They are asserting that state and local governments can tax you on the value of the car pre-rebate. So their beef is with state and local governments.

http://www.cars.gov/faq#category-01

Search for "tax' and you'll find it eventually.

This appears to be an illegitimate rumor. They are NOT taxable.

http://www.cars.gov/faq#category-01

Search for "tax' and you'll find it eventually.

This appears to be an illegitimate rumor. They are NOT taxable.

 

 

I saw the report on CNN.

 

Basically the rebate hit with sales tax (your trade in value is "$0")

It is taxable income for both dealers and consumers in states with an income tax.

It is taxable income for dealers in federal tax dollars

And their remains some confusion about it being a taxable amt for consumers on the federal level as there is no exemption

http://www.cars.gov/faq#category-01

Search for "tax' and you'll find it eventually.

This appears to be an illegitimate rumor. They are NOT taxable.

 

 

I saw the report on CNN.

 

Basically the rebate hit with sales tax (your trade in value is "$0")

It is taxable income for both dealers and consumers in states with an income tax.

It is taxable income for dealers in federal tax dollars

And their remains some confusion about it being a taxable amt for consumers on the federal level as there is no exemption

 

Yes seeing a report on TV is always helpful when it comes to showing information to people on the internets.

 

Well sales tax would be a local and state level issue, not a federal one, unless you would like the federal government to dabble in state and local level tax legislation.

 

As for it being taxable income for dealers on a federal level, I am not sure why this would be an issue since, well, it is income for them. From my understanding they will be getting that money, and would've had to pay tax on that income if it came from the consumer, or the government.

 

And maybe you could help widdle down the confusion for us by finding a source or two that all of us could access, not just some second hand encounter of a CNN story on TV?

 

This was a worthwhile topic to discuss. :confused

I saw the report on CNN.

 

Basically the rebate hit with sales tax (your trade in value is "$0")

It is taxable income for both dealers and consumers in states with an income tax.

It is taxable income for dealers in federal tax dollars

And their remains some confusion about it being a taxable amt for consumers on the federal level as there is no exemption

 

 

Yes seeing a report on TV is always helpful when it comes to showing information to people on the internets.

 

Well sales tax would be a local and state level issue, not a federal one, unless you would like the federal government to dabble in state and local level tax legislation.

 

As for it being taxable income for dealers on a federal level, I am not sure why this would be an issue since, well, it is income for them. From my understanding they will be getting that money, and would've had to pay tax on that income if it came from the consumer, or the government.

 

And maybe you could help widdle down the confusion for us by finding a source or two that all of us could access, not just some second hand encounter of a CNN story on TV?

 

This was a worthwhile topic to discuss. :confused

 

I figured that since cnn was 3 letters you might be able to type it in somewhere.

 

Here is a write up that took me all of 20 seconds to find:

 

searching is fun!

 

 

Also, I am looking for a transcript of the broadcast but CNN is not as assidious as putting up their shows' transcripts as Fox is.

 

Insofar as sales tax being on the state and local level, that is not relevant because the rebate could have been listed as a 'trade in value' which would have prevented that.

 

If it were a trade in value, then it would not be income for a dealer, the selling of the trade in is. Even still, you have cash businesses still waiting for money from the government, which is causing them a significant burden. If they took your car, the would turn it around at the auction for cash right away or add it to their inventory. With clunkers they can do neither.

 

This program is proving to not only be bad for the taxpayer, but likely to be bad for the dealers and potentially difficult for the buyers.