This just amazes me.........
The current stimulus plan (adopted at the beginning of the year) provides for a tax deduction if a new car is bought in 2009. The tax deduction is for state sales tax and excise tax paid on the purchase. The result should be about $450-$650 tax savings.
Now they are considering the 'clunker' stimulus. I'm not sure if this is in addition to the existing stimulus???
Regardless: Clunker is defined as getting less than 18 mpg. I wonder if that is mpg "new" or mpg "older car". Here's a quick look at what the net has:
www.mpgfacts.com
Here's the WSJ article last week:
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CASH FOR CLUNKERS- Pending legislation
Wall Street Journal: June 13, 2009
WASHINGTON -- A program that would provide up to $4,500 in government-funded discounts to consumers who trade in an old car could provide a much-needed boost to the auto industry.
The "cash for clunkers" program, which cleared a key hurdle late Thursday, would allow consumers to buy a wide range of vehicles -- including large pickup trucks -- with the government money when they scrap an older, less-efficient model.
Congressional leaders attached legislation for the program to a must-pass bill to fund troops in Iraq and Afghanistan. The agreement came despite efforts by several Senators to require that new vehicles purchased through the plan be even more fuel-efficient.
The program still must be approved by both chambers of Congress, and voting could take place next week.
President Barack Obama has called for Congress to pass such a program to help stem a dramatic slide in auto sales.
The proposed program would subsidize the purchase of 600,000 to one million vehicles, lawmakers estimate. It closely resembles a car trade-in proposal passed by the House earlier in the week that would last a year and cost about $4 billion.
One remaining question is where the funding would come from. Lawmakers set aside about $1 billion for the program in the war-funding bill. The remaining money might come from the economic-stimulus plan.
"We cannot wait any longer to pass this legislation," said Rep. John Dingell (D., Mich.). "Every day we put it off, auto sales are depressed further."
The program was heavily supported by U.S. car makers, which argued that the Obama administration's auto-industry restructuring must include a component to lift consumer demand.
"We are at historic lows since 1937. The auto industry can only have sales down 30% for so long," said Pete Lawson, Ford Motor Co.'s top lobbyist in Washington.
Similar programs in Europe helped boost car sales. Proponents also argue the program will drastically reduce emissions of gases blamed for global warming.
Critics of the measure, including Sen. Dianne Feinstein (D., Calif.) and Sen. Susan Collins (R., Maine), contended the program could provide vouchers toward the purchase of gas-guzzling SUVs such as the Hummer H3.
But Democratic leaders came out strongly for the House bill, blunting criticism that it was the pet project of the auto industry.
Under the measure, trade-ins would have to get no higher than 18 miles per gallon and have been built in 1984 or after.
A $3,500 voucher would be issued for the purchase or lease of a new vehicle that gets at least 22 mpg. The voucher would increase to $4,500 if the new vehicle was 10 mpg higher in fuel economy than the trade-in.
Vouchers would be limited to vehicles costing under $45,000. The standards would be looser for light-duty trucks.
Write to Josh Mitchell at joshua.mitchell@dowjones.com and Corey Boles at corey.boles@dowjones.com
