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Obama throws weight behind car scrapping, new car tax incentives

 
3 4,978 views Mar 30, 2009
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The plans are intended to get buyers to the dealerships

The plans are intended to get buyers to the dealerships

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The 'cash for clunkers' type programs have proven hugely successful in Europe - particularly in Germany - and today President Obama put his support behind at $7,500 trade-in incentive for old cars. Along with the car scrapping push, Obama has also lent his support to a set of new car tax incentives designed to get people out of their mobility malaise and back into dealerships.

Both the car-scrapping and the new-car tax incentive proposals have been around for several weeks, proposed to Congress as stop-gaps against the weakening economy and car market. But with President Obama's support they are beginning to look like spokes in a wheel of industry reform and stimulus.

The basic aim of the tax incentive program, called the Auto Assistance Ownership Amendment, is to offer tax relief on the purchase of a new car - with certain limits. Those making over $250,000 per year or buying a car valued at over $49,500 won't be eligible. The savings could still total thousands of dollars, by making the interest paid on car loans and state sales and excise taxes deductible.

Car scrapping on the other hand offers a dual-pronged approach toward driving up new-car buying: by getting older cars off the streets and offering up to $7,500 in exchange, it creates demand and supplies cash. The success of similar plans in Germany has proved immense, but it remains to be seen if the idea will play out well in the much different car climate found in the U.S.



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Comments (3)

  1. ma_1965dart340 avatar 1965dart340 Posted: 3/30/2009 9:08pm PDT

    this is a retarded idea politicians do not know what they are doing this will crush thousands of cars that are part of this countries heritage and great past when this country actual made good cars.
     
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  2. By  buy cartes memoire Posted: 1/18/2010 11:52pm PST

    I think Obama is trying to bring a revolution in the Automobile industry. Hope this time he gets it right.
     
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  3. By  andy bell Posted: 10/5/2010 12:31pm PDT

    Not difficult to be charming than Leno.car-tax-online
     
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