Some see the Cash For Clunkers program as a good thing, while others take time to read and understand what is happening.
On the outside, this plan seems like a winner for all who participate. Dealers, salvage yards, and soon-to-be new owners alike. Those looking to buy a new car or truck are given an incentive to go ahead with the purchase. New car dealers are glad to see their showrooms full of prospective buyers. Salvage yards are chopping at the bits to get their hands on the ‘clunkers’ to stock their shelves with parts.
The problem isn’t always between the lines. Unassumingly, it is right in front of your face. For those looking to see of they qualify for the program, the CARS.gov website opens your computer to the government and becomes part of their computer system, for both foreign and domestic use. It is in plain sight when you are taken to the privacy act statement.
In between the lines, you will pay for the $3500 or $4500 ‘rebate.’ Take a second and remember back when you got a ‘check’ in the mail only to later that year find out that you had to pay taxes on it. If it sounds to good to be true, it might be right? Those unsuspecting people will be faced with a large bill come tax time.
As stated in Department of Transportation Docket No. NHTSA-2009-0120, on the bottom of page 7 and continuing on the top of page 8, says: “The use of the term “rebate” in the name NHTSA has chosen for the program is not intended to have any effect on how CARS transactions are treated under State or federal tax laws. The CARS Act provides that the credit is not income to the purchaser, but does not address any other possible tax issues. NHTSA lacks expertise and authority in tax matters and makes no attempt here to provide any guidance on those matters.”
Simple put, they don’t know how to properly tax the individual. But, left to an already bankrupt Obama Administration, they know how to tax people. If they don’t know how they will do it right now, they will figure it out by the time tax season hits.
With government officials already left to scramble on their inability to loosen the housing market, few are left to wonder if this will be the final straw to the next collapse. Foreclosures were first, could repossessions be next?