American government grants tax deduction on Hummers
- The following article, attributed to David J. Cieslak of the Arizona
Republic, appeared on pages A1 and A2 of the thursday, January 1, 2004
edition of the Arizona Republic. The Hummer is the civilian version
of the HumVee, an armoured personnel carrier used in both wars against
Iraq. I suppose it could have some advantage in civilian life over
ordinary cars in traversing the mud and snow of unpaved and poorly
maintained rural roads, and its armour would be of some use against the
gun battles that sometimes occur in American cities. For most of their
owners, however, the Hummer is a status symbol--conspicuous consumption
of both money and petrol. Now, for some strange reason, the federal
government is allowing the purchase of a Hummer to be a tax write-off.
Why subsidize such wasteful use of petrol? Perhaps they want to create a
market for the surplus HumVees that may soon be on the market after the
American troops are forced out of Iraq :-)
TAX BREAK HAS HUMMERS ROLLING OFF LOTS
Here's the perfect way for a Valley business to truly ring in the new year:
Buy a shiny new Hummer or a fully loaded Cadillac Escalade, then get a hefty
tax deduction on the monster vehicle, all compliments of Uncle Sam.
Dozens of wide-eyed customers packed into the Valley's Hummer and Cadillac
dealers on New Year's Eve to take advantage of a federal tax windfall allowing
them to buy the oversize gas guzzlers and deduct the purchase from their 2003
Dealers said they were selling more than double the average daily number of
the specialized vehicles, with much of the rush coming as their doors were
set to close.
"We're selling a ton of cars, and everybody's having fun," said Bob Monahan,
sales manager for Lund Cadillac Hummer Saab in Phoenix, who watched 35
Hummers and Cadillac Escalades roll off his showroom floor Wednesday.
"It's been great for everybody," said Monahan, who esstimated his average
daily sales at 15 vehicles.
The deduction for business owners, approved in May by President Bush as part
of his federal tax-cut package, gives a deduction of up to $100,000 for new
or used vehicles that weigh more than 6,000 pounds [2730 kg]. Aside from
Hummers and Cadillacs, the choices ranged from the Dodge Durango and the
Ford Expedition to the Lincoln Navigator and the GMC Yukon.
Dealers across the Valley pledged to stay open late on New Year's Eve to
handle the rush of customers, many of whom came straight from their
accountants' offices after receiving advice about the tax deduction.
"Most of these people have done a lot of research to make sure they qualify
for the program,a nd now they're coming back and buying the vehicles,"
said Eddie Espinosa, general manager for Kachina Cadillac Hummer Saab in
Phyllis Tsai, 27, drove to Scottsdale from Snowflake to buy a new Hummer H2.
Tsai, whose boyfriend owns a motel in the northern Arizona community, said
they jumped at the chance to own a Hummer after realizing the 2003 write-off
deadline was wednesday.
"To me, a vehicle is a vehicle, but my boyfriend was really excited about it,"
said Tsai, whoo was the last customer at Kachina before the dealership closed
shortly after 8 p.m.
But to Dave Bresnahan, the Hummer is much more than just a vehicle. In the
eyes of his three sons, buying the "sunrise" orange Hummer for $55,000 made
him the hippest dad in the Valley.
"I bought it mostly because my boys think it's cool, and I'm a boy who
thinks it's cool, too," said Bresnahan, 42. "It's awesome. I feel like a
king." [Quite a self-damning statement from a moronic American consumer
Bresnahan, vice president of Lex International, which sells customer-
retention products to car dealerships, said he knew about the tax
deduction for six months but didn't make a decision until New Year's Eve,
when he drove by the Kachina dealership in Scottsdale.
"I didn't go in thinking I was going to buy anything, but I walked out with
one," Bresnahan said.
The windfall doesn't come without a price for the government. One expert
estimated that if 100,000 people utilize the loophole, it will cost the
country about $1.5 billion in tax revenue.
Lawmakers earlier this year upped the deduction amount from $25,000 in the
hopes it would encourage businesses to invest in new equipment sooner.
The deduction is available for tax years 2003, 2004 and 2005.
Dealers say the tax break encourages people to buy cars, which contributes to
a healthy economy.
"Our customers are speaking to their accountants and making a good business
move at the end of the year," said Greg Schamp, new car sales director of
Coulter Cadillac and Oldsmobile in Phoenix. "It's a good time to be a
"The enemy is at home."