Wednesday, August 26, 2009

Cash for Clunkers: The Scam Exposed !

Best ye learn this lesson well, my fellow subjects...what Obama giveth, Obama taketh away. And if you think you've gotten a great deal on your "clunker", remember what mama told you about something being too good to be true?

'cause it's all about the taxes. The taxes. The taxes. To explain:

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... [it's] a $4,500 check from the government...

And while Tony Soprano may set you up to earn a nice paycheck, well - you know what he expects from you at the end of the month: a nice, fat envelope, delivered with good cheer, full of kickback cash:

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.

Oh, and the shakedown ain't over yet! Why, it's even caught on in the nation's heartland....Dispatch: South Dakota:

[Minnehaha County Treasurer Pam] Nelson adds that if you did recently purchase a vehicle, ensure your dealer gets you the paperwork in time because if they don't you could pay extra interest and penalties.

Scam-a-palozza! The taxpayer foot the bill for each $4500 clunker check, which is used to destroy cars that still have life/parts, which the dealers use to increase their profits from the buyer, who then has to pay tax once, maybe twice, and fork over penalty fees if he isn't snappy about it. And to reiterate the delicious irony of it all...his taxes paid for the $4500 rebate check in the first place!

Welcome to Obamaland!

Doug Ross has a few more thoughts:

Let's count the unintended consequences of the National Socialist Democrats' idiotic clunkers program:
- So many SUVs were purchased by consumers that even the mainstream media was forced to report that the Obama administration fudged the sales data
- Speaking of which, the program drove huge increases in sales of Japanese-made vehicles
- Best of all, consumers who used the program are going to get slammed with taxes they never anticipated!

Isn't a faceless, unaccountable, centralized government grand?

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