Tax Breaks for Car Buyers Added to Stimulus Package

Senate approves boost for auto industry as sales hit 27-year low
By Rob Quinn,  Newser Staff
Posted Feb 4, 2009 1:48 AM CST
Unsold 2008 Denali sports-utility vehicles sit on the showroom floor at a GMC Truck dealership in Littleton, Colo.   (AP Photo/David Zalubowski)
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(Newser) – A new boost for automakers and car dealers has been added to the stimulus package before the Senate, reports the Los Angeles Times. The amendment—made on the same day that US car makers reported their worst sales in 27 years—would create an income tax deduction for both sales tax on new vehicles and interest on new car loans.

Tax breaks would be retroactive to Nov. 12, 2008. A family could save about $1,500 on a $25,000 car under the plan. Critics say the proposal, which would have to pass a House-Senate conference committee even if the Senate passes the stimulus package, will encourage consumer debt and won't work to boost car sales.
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