The One Big Beautiful Bill Act passed the House of Representatives in May, and a new version was proposed by the Republican-led Senate Finance Committee this week. Senate Republicans aim to pass the bill to the desk of President Trump by July 4th. The bill makes a few changes to car-related policies, one of which is the tax break on loan interest for American-made cars. According to CNBC, the tax deduction for interest on loans for U.S.-built vehicles will only apply to new models.
The language in the new version of the bill states that you only get the deduction if it’s the first loan on the vehicle, and for models in which “the original use…commences with the taxpayer.” “They don’t say the word ‘new cars’ but I don’t see another way of interpreting that language,” Matt Gardner, senior fellow at the Institute on Taxation and Economic Policy, told CNBC.
According to data from Cox Automotive, the average household income for new car buyers in 2023 was $115,000, while used car buyers averaged a $96,000 household income. Critics are saying low- and middle-income households wouldn’t benefit from this new tax break, even if they shop for an American-made used car. “The more you earn, the higher the tax rate you pay, meaning the more benefit you get from this thing,” Gardner said.
The tax deduction proposed by the Senate has another catch: it has an income limit. The deduction’s value falls by $200 for every $1,000 of income over $100,000 for single taxpayers and $200,000 for married couples who file jointly. Eligible car buyers can claim a maximum deduction of up to $10,000, well above the average $1,332 paid annually in car loan interest, according to AAA.
Encouraging domestic car manufacturing has been a pillar of the Trump administration’s trade policy since his second term began in January. “So if the car is made in America, you get a loan, you can deduct the interest,” President Trump said in March when he announced the 25 percent tariff on cars imported to the U.S. “That’s a big saving.”
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“low- and middle-income households wouldn’t benefit from this new tax break”
Surprise, surprise. Pathetic.
Sure they would. They’ve been benefiting from low taxes and provided “entitlements” for decades. Pop the titty out of their collective mouths.
Unfortunately most of these on the welfare teet are skipping around working due to the lax work requirements, which if rumor has it, is also at risk at being removed. The guys who actually go out and work are the ones who are struggling right now. Many would do better walking off and joining the welfare state
At least on the bright side, reports show ¢h1n@ is reducing their prices to avoid loosing sales from the tarrifs. Looks like they’re paying the tarrifs after all.
I hate to tell you this, most folks collecting TANF or SNAP or Housing Assistance are physically and mentally disabled or children. Many are Wards of the State. Many live in CILA’s or Group homes. They can’t work. Volunteer at a facility. Go to the Salvation Army and volunteer or even stop at their thrift store. Call yourself lucky that you are able to work hard. They are dependent on our good graces and religious morals.
Yeah, kids don’t count for economic numbers. Majority of people on welfare are either too old or too young to work, but majority of those who are “of working age” and receive benefits are more able bodied than some of the people we have show up for work. If you can drive around town all day and yell at people you can drive a fork truck, hold a sign for construction work or flip a burger. There’s no excuse when there’s a couple people who limp to work where I work at because they have more integrity than some of these bumbs.
And too be clear, I’m 100% in for welfare for the aged and single parent households. I thing the Gov F###$ it up, and in a perfect world we have no income tax so organizations like the red cross and salvation army would have ample donations to take care of our poor, but that not the hand we’ve been dealt. The welfare system is what we got right now, but if you can work, shame on you for accepting welfare.
I pay a higher tax rate than Trump
You’ve seen his Returns? Your posting here will be headline news on CNBC, CNN, NBC, CBS, FOX (their news division), Politico, Huff Post, The Hill, all over BlueSky and Congress. With that being said, the fact that he hasn’t released them, says everything I need to know and you are probably correct.
And should he pay more or you less? If he paid 100%, would you be any better off? Answer is no, and his whole point in taxes, everyone should pay the same rate he and other “investment class” do. He pays more than Bezos cause he’s in real estate. We all pay more than both. Eliminate the income tax.
That means you are making a good wage. Stop complaining.
Of course it doesn’t apply to used cars. The whole point is to encourage buying a car manufactured in the US. Buying a used car doesn’t exactly boost US production and providing a tax break for that would just be a waste of taxpayer dollars.
You’re 100% correct. I understand that many in the general public can’t grasp the concept behind the tax break, but why would CNBC or any media outlet be surprised by this? It shouldn’t be so hard to understand that giving a tax break for a used car doesn’t help the automakers, their suppliers or the job market in this country. One of, if not the main reason tax breaks are given is usually to boast jobs.
And just because someone can’t afford a new car and doesn’t get this tax break, doesn’t mean they may not be benefiting from it. Many of those people have jobs with the automakers, or the thousands of companies that supply them, and this tax break might just protect those jobs or maybe even provide more jobs in the industry.
Cheaper new cars drives down the costs of old cars. Worst thing for used car buyers was COVID. Masaive drop of new vehicles exploded used car values.
Does that means that vehicules built in Mexico and Canada will also benefit from the ttttc(trumpy-trump-tariffs-turmoil-chaos) BBB. According to me geography book, Mexico and Canada are also in America(North) like the US. And or change for Mexico of America and Canada of America. America does not include only the US. The A in usa should be removed. You are not the center of the world
Interesting point but, then neither are you!
See that there was 12 negative posts, so that means that you should go back to school and get intensive courses in geography