Great News: Cash for Clunkers Rebates are Taxable

When something seems to be too good to be true, remember there are some sneaky Democrats likely behind it waiting to pick your pocket.

The Cash For Clunkers program is adding to the activity at treasurers' offices all around South Dakota. First, people were asking for proof of ownership, so they could show they owned their vehicle for a full year, allowing them to cash it in. Now, they'll be returning to register their new vehicle. And when they do, new owners need to bring every bit of paperwork provided to them by their dealer.

"That means they need their title, their damage disclosure, their bill of sale and the dealers have 30 days to get that to them," Minnehaha County Treasurer Pam Nelson said.

But many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.

"They didn't realize that would be taxable. A lot of people don't realize that. So they're not happy and kind of surprised when they find that out," Nelson said.

You've been hosed.

The amusement here is how most (if not all) states compute sales tax (charged when you register the vehicle.)

When you buy a new car you pay tax on the difference between the new car's purchase price and the trade-in you present to the dealer. This is an intentional distortion in the law that is intended to favor dealers over private-party used car sales; if you sell your used car privately the new buyer pays sales tax but you do not get the offset on the purchase of your replacement vehicle - the only way to get that is to trade the car.

Dealers use this, of course, in negotiations, effectively pocketing the sales tax - and why not? It's a real difference to you!

But the "cash for clunkers" is not a trade-in. That's a $4,500 check from the government, basically.

So you get nailed at least once and possibly twice. Specifically, you pay sales tax on the full vehicle price (effectively paying sales tax on the $4,500!) and what's worse those states that tax income (that would be most of them!) might wind up counting this as income for state income tax purposes too, effectively taxing you twice.

Via Business Insider.

Question Their Patriotism: NY Auto Dealers Pull Out of 'Cash for Clunkers' Fiasco

Damn greedy car dealers. How dare they expect to be reimbursed! Why, this is downright un-American!

A New York dealership group says hundreds of its members have left the Cash for Clunkers program, citing delays in getting reimbursed by the government.

The president of the Greater New York Automobile Dealers Association says about half its 425 members have stopped offering rebates from the program because they can no longer afford them.

Mark Schienberg says the group's dealers have been repaid for only about 2 percent of the clunkers deals they've made, leaving many short on cash.

Says so much about the future of government-run healthcare, doesn't it?

Transparency! Obama Refuses to Release Cash for Clunkers Sales Data

Considering what a robust success (cough, cough) this Cash for Clunkers program has been, you would think the bumbling Obama administration would be rushing to provide the data to the public. Of course, since we're dealing with the most incompetent presidency since James Earl Carter, that won't be the case. You know when the AP is laughing at you that the honeymoon most definitely is over.

Transportation Secretary Ray LaHood, the nation's top car salesman in recent weeks, has cited the Obama administration's best-seller list of mostly smaller, fuel-saving cars like the Ford Focus to describe the success of the Cash for Clunkers rebate program.

But what LaHood and other administration officials usually don't mention is that some trucks and sport-utility vehicles that get less than 20 miles per gallon, like the Ford F-150 truck and one version of the Cadillac SRX Crossover, also are being purchased with the new government subsidies. Both are bulky vehicles weighing more than 6,000 pounds when loaded that boast at least 248 horsepower.

Just how many consumers used the federal rebates to buy these larger, not-so-green vehicles is unclear. The Obama administration has declined so far to release detailed records of purchases under the program being compiled by the Transportation Department, listing every clunker deal requesting rebates. The Associated Press requested the data July 31.

The Transportation Department distributes regular summaries of sales from the clunkers program and has used the electronic sales information from dealers to bolster arguments that Americans are dumping gas guzzlers for gas savers. But its failure to release detailed records means the public can't verify those claims.

"Today almost 200,000 new fuel-efficient automobiles averaging 25 miles per gallon are on the road instead of gas-guzzling trucks and SUVs," LaHood wrote on his official blog just before Congress voted to spend $2 billion more for the government rebates last week.

Even the Top 10 list of mostly smaller, fuel-efficient cars that LaHood has cited as evidence of the program's success is being questioned. A different Top 10 sales list produced by Edmunds.com, an auto consumer Web site, from dealer sales data shows fewer small cars and more large vehicles like trucks and utility vehicles make up the best sellers.

Both lists of top sellers include, for example, the fuel-saving Toyota Corolla, and the clunkers program by its definition is encouraging consumers to dump older, less fuel-efficient cars for new, more efficient models.

But the program, now expanded to $3 billion and offering rebates of up to $4,500, isn't limited to the best gas savers on the market. And that's good news to Beny Ledesma, general sales manager at Williamson Cadillac-Hummer in Miami.

The dealership has sold three 2009 Cadillac SRXs — the six-cylinder engine model — through the clunkers program, he said, and is finishing paperwork on two more. Ledesma hopes to sell the other 14 at the dealership, along with some of the Hummer H3Ts on the lot that are eligible for clunker rebates.

Both vehicles get about 18 mpg, considerably less than the 25.3 mpg average that LaHood has attributed to new cars purchased under the clunker program.

"The Cash for Clunkers is definitely generating traffic for Cadillac and Hummer," Ledesma said.

More Misinformation From The White House Dept of Information

Which vehicles are Americans buying in the Cash For Clunkers program? It depends on who you rely on for your information, the White House Office of Dis-Information or a private, and probably evil, automotive company, Edmunds.com.

The White House list had only small vehicles, thereby boosting their claims that given a chance Americans would buy their planet loving, global saving, little cars, but it turns out that was due to some creative bookkeeping.

The discrepancy is a result of the methods used. Edmunds.com uses traditional sales measurements, tallying sales by make and model. The government uses a more arcane measurement method that subdivides models according to engine and transmission types, counting them as separate models. For example, the Ford Escape is available in six different versions including two- and four-wheel drive and hybrid versions. The government counts each version as a different vehicle using guidelines from the Environmental Protection Agency.

Compare their list to what Edmunds has as the most bought vehicles.

1. Ford Escape
2. Ford Focus
3. Jeep Patriot
4. Dodge Caliber
5. Ford F-150
6. Honda Civic
7. Chevy Siverado
8. Chevy Cobalt
9. Toyota Corolla
10. Ford Fusion

Yup, folks still like their pickups and SUV's and I would like to think that the presence of so many Ford vehicles on the list is due to the fact that they didn't take any government, (taxpayer) money, even though they still remain under the thumb of UAW, and Americans are showing them a little love.

Cash For Clunkers In The Crapper

Well that didn't take long. A program to buy back old energy inefficient vehicles has apparently run out of money 4 days into a program that was supposed to last until October. You got to love government efficiency.

Transportation Department officials called lawmakers' offices earlier Thursday to alert them of plans to suspend the program as early as Friday. But a White House official said later the program had not been suspended and officials there were assessing their options.

These folks want to control your healthcare. This administration is posting one failure after another. The stimulus package that didn't stimulate, a cap and trade policy that right now is capped in congress, and an attempt at card check that got checked at the door.

This morning Libertarian Party former presidential candidate, Wayne Allyn Root, was participating on a panel discussion on Fox and Friends talking about the near beer BS session last night and he brought up the case of the Mustang Ranch in Nevada.

The Mustang Ranch was a highly successful brothel in Nevada, that is until the owner got caught for not paying taxes, and since he wasn't an elected official, got sent to jail. The government took over control of the enterprise and within a year the ranch was out of business. How bad do you have to be to go bankrupt running a whorehouse??

Anyway there are reports all over the place of dealers not being able to get reimbursed from the government for car deals they have already made, that had been approved and now with word that the entire program may be out of money I hope y'all are enjoying all this hope and the change in your pocket.