-By Warner Todd Huston
Yep, you read that right. In many states car buyers that turned in their “clunkers” for up to $4,500 off the cost of a new car are finding out that they have to pay state sales tax on the $4,500 too. And still others just might find out next year that they’ll have to pay income tax on that “free” government money.
Many South Dakotans, for instance, have been shocked to find that the wonderful gift from Obama was still added in with the cost of the automobile for the sales tax calculation, so their tax went up accordingly despite that they didn’t pay the $4,500 themselves.
Some states calculate sales tax by subtracting from the total cost of a new purchase the trade-in allowance of a buyer’s old car. But in the case of cash for clunkers, there is no trade-in allowance and the $4,500 remains added to the car purchase.
Even worse, many states will charge income tax on the $4,500 because the sum will be determined to be the same thing as income to the car buyer.
There is also another interesting aspect to this cash for clunkers situation. One can be sure that many buyers did not take the time to negotiate with dealers and paid full sticker price further negating the supposed savings that they were supposed to realize from the cash for clunkers program. As Market Ticker’s Karl Denninger quipped, “Ain’t car dealers grand (several grand out of your pocket, that is!)”
____________
Warner Todd Huston is a Chicago based freelance writer, has been writing opinion editorials and social criticism since early 2001 and is featured on many websites such as NewsBusters.org, RightWingNews.com, StoptheACLU.com, TheRealityCheck.org, RedState.com, Human Events Magazine, AmericanDailyReview.com, and the New Media Journal, among many, many others. Additionally, he has been a frequent guest on talk-radio programs to discuss his opinion editorials and current events and is currently the co-host of “Life, Liberty, and the Pursuit of Conservatism” heard on BlogTalkRadio. Warner is also the editor of the Cook County Page for RedCounty.com.
He has also written for several history magazines and appears in the new book “Americans on Politics, Policy and Pop Culture” which can be purchased on amazon.com. He is also the owner and operator of PubliusForum.com. Feel free to contact him with any comments or questions : EMAIL Warner Todd Huston
Fair Use: This site may contain copyrighted material the use of which has not always been specifically authorized by the copyright owner. I am making such material available in my efforts to advance understanding of political, human rights, economic, democracy, and social justice issues, etc. I believe this constitutes a ‘fair use’ of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have expressed a prior interest in receiving the included information for research, educational, or satirical purposes. If you wish to use copyrighted material from this site/blog for purposes of your own that go beyond ‘fair use’, you must obtain permission from the copyright owner.