5 Downsides to 'Cash for Clunkers'

People will not have to pay FEDERAL income tax as a result of getting money from the Cash for Clunkers program. The federal law prohibits that. However, depending upon the state where you reside, there could be tax ramifications. Access the following link for more information: http://www.snopes.com/politics/taxes/clunkers.asp

G McDevitt of WA 2:14PM September 05, 2009

Has anyone thought about the income tax implications? First you pay your income tax to the Government,,,then they give you back some of YOUR OWN MONEY,,,telling you that it's a gift from the Government, HAH! Then they turn around and tax you again (as it will be considered income) for on the money they gave back that you already had paid taxes on originally. WHAT A SCAM! Leave it to the Dems to come up with an idea to make double taxation legal.

Jimmie Wandling of AZ 9:27AM August 28, 2009

I just want to throw out some other thoughts about the Clunkers program.

The number of people put to work by the auto sales is numerous. From the factory and all those supporting it, to the drivers delivering the vehicles and the dealers selling the vehicles they are all kept working by this jump in sales. More people working means more income tax and less unemployment payments and more spending by the people getting the first wave of auto sales income. Also think of the vehicle tax and registration money taken in from the sales that will help the state and local tax revenues. Even though foreign companies as Honda and Toyota have benefited a lot by the sales, remember that they have factories in the USA and have upped their production recently along with Ford and GM. I didn't catch who but I heard that one company rehired 3,000 employees in Mississippi. Auto production is one of the few manufacturing industries that is not solely done outside of the USA so our labor helped more that most other areas of assistance.

The part about taking away used cars from possible sales seems overstated when you look at many of the vehicles turned in. I have never seen a 20 year old car on a used car lot. These vehicles were destined to be run until they die not put on a used car lot. Most used car lots have vehicles that are 3 to 7 years old.

Vehicles getting less that 16 MPG are being replaced by vehicles averaging 25 MPG. This means the demand for gas will be reduced which helps put pressure on the low side of gas prices.

There is no plan that is 100% foolproof, but I think this plan is going to do a lot more good than many say. Notice each title of the above 5 remarks use the words "could" or "might".. all to the negative and not addressing the possitive.

Rudie of CA 4:38PM August 27, 2009

Yes but... we are operating in a deficit situation. The money paid to the consumers will likely come from foreign borrowing. So we swap our oil imports from Mideast to money imports from China. Great idea? I don't think so.

Besides. If you are looking to buy a new car in today's economy, you aren't among the people that need help the most.

Larry Brewer of KS 3:21PM August 26, 2009