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U.S. Senate passes tax break for new car buyers

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The deal would allow buyers to deduct the sales tax and interest paid on new car loans

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No one at this point doubts the country's, or the world's, economic woes, most especially those within the car industry. So the passage today of a Senate bill allowing the deduction of sales tax and interest paid on new car purchases made between November 12, 2008 and the end of 2009 comes as a welcome aid.

Clearing the floor with a 71-26 majority, the bill will allow single taxpayers earning as much as $125,000 and couples with combined incomes as high as $250,000 file for the tax break, reports the AP. It is hoped that the measure will both stimulate new car purchases and, more indirectly, the economy in general.

The Senate tacked the auto loan tax cut onto the already-massive $820 billion economic stimulus packaging circulating Capitol Hill, helping to push the total estimated price tag beyond $900 billion, along with several other late additions.

Speaking on the Senate floor, advocates of the measure argued the bill would stimulate not just new car purchases, but the industry itself, serving to preserve jobs and even creating new ones.

The House has already approved an $820 billion version of the stimulus package, though a long list of further amendments are expected before a final product is reached. A version of the bill may reach President Obama's desk by week's end, provided it does not stall undergoing revision.