Loose Lips

I have long advised people who are able to claim generous tax breaks to be happy about that fact and keep it to themselves. Brag about something too much and sooner or later those who don't qualify for it will scream loud enough to force our rulers to scale back on the breaks. Envy, jealousy and outright hatred for anyone getting any more tax breaks than you are pervasive in this country.

This is the very reason for the 1984 luxury car rules. Before 1984, business cars of any cost could be fully depreciated over three years. Because so many big-mouths bragged about this, the backlash from those who couldn't deduct their vehicle costs was too much for our rulers to ignore. They limited the amount of a vehicle's cost that could be depreciated over five years. After adjustments for inflation, that limit currently stands at $17,410. Any vehicle costing more than that is by definition a luxury vehicle.

To distinguish between normal passenger and utility vehicles, our rulers established a break point of 6,000 pounds gross vehicle weight. Any vehicle weighing more than that is not subject to the luxury car rules and can be fully depreciated over five years. In addition, it qualifies for the immediate expensing election under Section 179 of the Internal Revenue Code, currently $24,000 per year. While I have been discussing this tax break since it as first enacted in 1984, the rest of the public didn't become aware of it until very recently as part of the open attack on SUVs and their owners by such loud mouth Socialist hypocrites as Arianna Huffington. It doesn't surprise me one bit to see editorials such as this one from the Atlanta Urinal-Constipation calling for our rulers to eliminate this lucrative tax break for evil SUVs. How long will it be before we have a repeat of 1984?

KMK

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 1/16/2003 08:53:00 PM Send this post: