Electrical Golf Cart -- Tax credit ??????

westernrvparkowner wrote:

rk911 wrote:

John & Angela wrote:
Funny story. When we bought our club car in 2003 that was one of the selling points of the cart. It has signals, seat belts, highway tires, 4 wheel brakes, goes 24 MPH. Had to brake it to him that we were Canadian and it didn't do us any good. Bought it anyway, brand new 4900 bucks. Still runs great. Funny thing was he had just bought a Hummer that gave him a 100,000 dollar tax credit. That one surprised me but apparently was quite common during the Bush era tax credits. Who would have thought that someone that can afford a hummer getting 14 mpg needed a 100,000 dollar tax credit. I'm looking at this through the eyes of a foreigner. I am sure there was more to it. I just never looked into it.

you're referring to Section 179 of the tax code which has existed for some time. basically, it encourages businesses to invest in themselves by creating tax credits for certain types of equipment used to operate the business. the stimulus act of 2008 (when democrats controlled both chambers) increased the tax credit limits for a year with the idea that the credits would roll back to previous levels. in order to qualify for a tax credit on the hummer the fellow you're referring to either was able to qualify that purchase for his business or he committed fraud. if you care to learn more just google 'section 179'.

I was thinking even further in the past, back in the days of the "Investment Tax Credit". It was another example of questionable tax policies. Back then people literally bought stuff they really didn't want or need because buying a somewhat similar item they did want or need did not qualify for the credits and the item they were incentivized into did. A good example at the time was a 1/2 ton Suburban did not meet the ITC requirements, but a 3/4 ton with the bigger 454 did. The tax savings were more than the additional fuel costs so many Suburban buyers got more vehicle than they wanted or needed.
It also reminds me of another failed tax policy, the luxury tax. Remember that gem? Going to stick it to the wealthy by taxing their expensive purchases. On cars the tax was 10% on the amount over $30,000. I think boats and airplanes were the same. The effect was the civil aviation business in the US was virtually destroyed. Airplane builders either closed or downsized. Thousands lost their jobs. The US Yacht industry almost ceased to exist, and thousands more lost their jobs. The US auto industry was put into a tailspin, and development of luxury lines almost ended. The European manufacturers still had their markets, so BMW, Mercedes and some others suffered less and continued to make and improve their luxury lines. It took decades for the US market to catch back up and opened the door for the Japanese to launch their luxury lines with much superior autos. The rich still got their Yachts and jets, they just bought and flagged them outside the US. Taxing the rich seldom works. The rich themselves have the resources to avoid taxation and the unintended consequences can be devastating. Like it or not, we need rich people. Even discounting their businesses, their consumption keeps a large percentage of our economy going. The rich hire architects, they employ construction workers to build their mansions. They are the ones that buy those King crabs the "Deadliest Catch" crews catch, they are the ones who stay at the Four Seasons and buy the Prevosts and Newells. Everybody knows someone who would be unemployed if not for the items the wealthy consume.