Posted Mar 22nd 2006 7:30PM
Yachts, golf clubs and
cars with powerplants over 2 liters will be subject to new taxes in China as the country aims to For once I think the chinese government is actually helping the public. Putting all those people in huge gas sucking smog belching suvs would be a bad idea. I think we should tax large engines in the USA and spend the money to fund things other than oil.
May 06 2006 at 7:08 PM Report abuse Permalink rate up rate down ReplyTheres nothing wrong with a big engine tax. Its the same thing as U.S's luxury tax, shortening the gap between rich and poor, except better because it also reduces harmful emissions. Its not like they wont allow 2.5 L engines, you just have to pay slightly more.
If you think this is a mistake, than the US is committing atrocities.
"For extra fun, the Republicans passed another law a few years back that allows business owners to write off the cost of heavy work vehicles. Yes, this again includes anything classified as a truck."
This is nothing new. All businesses have the right to deduct expenses from their gross income so that they are taxed on net, not gross income. Furthermore, the deduction you speak of (Section 179) has been in the IRC for as long as I have been practicing tax law. The only change that the legislation you mention created was the increase in dollar limit that business equipment could be expensed, from 25,000 to 100,000. This was done to spark spending and improve the economy. (I am not saying this is good policy or not, it is a matter of fact)
Furthermore, at the basic level this is a timing issue. Instead of having to depreciate a business vehicle over 5 years they get to take it all at once. Not to mention that you neglect the fact, as do most business owners that take advantage of the sec. 179 deduction, that they will have to recognize ordinary income when they sell the vehicle. Again, it is a timing issue, I get a deduction now, but have to recognize additional income latter.
Sorry that this is off topic, but I had to clear up the misconception that a lot of people have about this so called "loop hole" in the tax code.
in essence, what it is doing, is trying to give their domestic manufacturers a competitive advantage at the expense of their transplants. GM's (chevrolets,buicks, and cadillacs) is neck and neck for being the largest manufacturers and sellers over there. the buick line is immensely popular, and they have 3.1-3.9L V6's...never mind when you look at the US models that offer 4's and 6's (say, the chevy malibu, or honda accord), the MPG penalty between the base 4cyl/auto and the V6/auto is about 1-2 mpg.
March 24 2006 at 11:01 AM Report abuse Permalink rate up rate down ReplyOutside of the US, especially in Asia, this form of taxation is common. I am actually surprised that they haven't existed in China before.
March 24 2006 at 9:13 AM Report abuse Permalink rate up rate down ReplyI now understand why European companies are so much better at squeezing out more power from smaller engines - they can't just add liters.
#8, US fuel efficiency laws have been the biggest loop hole in the last 25 years. Written in the 70's, they were intended to apply to most vehicles. An exception was made for light trucks, mostly to benefit farmers. At the time, trucks made up a tiny % of all sold (they weren't yet fashionable). Two things then happened. Our companies didn't keep up with efficiency developments so less displacement meant much less power (and FWD) and any vehicle build on a truck platform qualified as a truck.
SUVs and mini vans in the US are classified as trucks and therefor fully exempt from efficiency laws. Buyers could choose one of these or a woefully underpowered sedan or pay fees. For extra fun, the Republicans passed another law a few years back that allows business owners to write off the cost of heavy work vehicles. Yes, this again includes anything classified as a truck. US taxpayers then, directly subsidize business owners to buy SUVs above a certain weight, namely Suburbans, Range Rovers, and Hummers.
"Considering everything, might as well just keep it simple and place the taxes on fuel source itself if curbing consumption (and the pollution produced by consumption/combustion) is the goal"
Excellent idea zoom, and yet China does just the opposite. Their state co for oil is mandated to sell their oil for $45 a barrel domestically, which I suppose is why they are trying to "mandate: small engines. This policy comes with a HUGE downside--how do you now sell those cars overseas?
The Chinese car industry may be dead as a US exporter before it even began.
I have to thank Chinese officicals that made this mandate. Hopefully wiht their self restricting use of gas, I can keep enjoy my giant SUV here in the US. Long live my rumbling V8.
March 23 2006 at 4:59 PM Report abuse Permalink rate up rate down Reply"#6 ...I am dumber after reading that."
I'm glad I could help. Kidding aside, look at the acceleration times of most vehicles with an engine smaller than 2.0L. For any typical passenger vehicle larger than a small hatchback, the time would only be tolerable if you're on ether. Forced induction helps, but still burns quite a bit of extra fuel too. A hybrid system would help (instant torque, gotta love it), but that's going to hike up the prices and add even more maintenance issues. Plus, that doesn't really do much for the affordable range and means that you might as well pay the tax. Otherwise, most people might as well stick to public transit or gamble your life on a motorcycle. Considering everything, might as well just keep it simple and place the taxes on fuel source itself if curbing consumption (and the pollution produced by consumption/combustion) is the goal.
Not that I might not mind a similar tax system here...it might keep people that actually don't enjoy driving or treat it as another chore while grooming themselves or reading (saw that one again yesterday) off of the roads. Plus, a few less trucks on the road would mean that people could actually consider buying something like an Elise because there would be a chance that you wouldn't die in the smallest of accidents.
Kudos to China. I agree 100%
There's no more room for another country, to stick their fat people in more fat cars than America.
