(10-12-2024, 10:53 AM)StroudCrowd1 Wrote: Rich people have car loans now. You can't hate CBS enough.

https://twitter.com/CBSNews/status/18448...qP-8w&s=19

(10-12-2024, 04:31 PM)americus 2.0 Wrote:

(10-12-2024, 12:16 PM)WingerDinger Wrote: I don't understand how CBS can come up with a headline like that. I would think most rich people purchase their vehicles outright to avoid unnecessary fees and interest payments. You don't stay rich with needless spending.

This is from the article:

If the plan mirrored the mortgage interest deduction, car owners would need to itemize their borrowing costs — making it a tax benefit that would mainly help high-income Americans, tax experts said. That's due to Trump's Tax Cuts & Jobs Act, which greatly expanded the standard deduction starting in 2018, which in turn limited write-offs for millions of low- and middle-income Americans.

Currently, only about 1 in 10 taxpayers itemize, the majority of whom are high-income earners. For instance, more than 60% of people earning over $500,000 itemize, versus 4% of those earning between $30,000 to $50,000, according to the Tax Policy Center.

For deductions, you need more than the standard deduction to make itemizing worth it. Tax credits would be different.

Most people already don't pay any taxes. They already get tax credits that are more than they pay in throughout the year.


So the impact is higher for high income earners. High income earners don't always pay cash, it depends on rates and market returns. A lot of the time, you could make more on the money in the market.

Tax credits or deductions would have $0 impact on poor people, unless they make it a refundable credit. I doubt that would happen but who knows. It would open it up to tons of fraud. You are going to have car lots taking the credit from the person, applying it to the loan, and then reducing the monthly cost. They could then increase the loan, increasing the interest, file and get the credit, give the person 50% as a monthly deduction, etc.

I would prefer it as a credit to tax liability but that doesn't get the sound bits or affect most people.

Sent from my SM-T970 using Tapatalk

---