Leave it to the Government to screw up a great gift:
It turns out that free car wasn’t so free.
That’s because while Pontiac agreed to pay for most of the local charges — things like state sales tax and licensing fees — the recipients have to report the cars as income once tax time comes.
By adding $28,500 to someone’s income, it can push them into a higher tax bracket — which means they will have to pay about 25 percent or more of the car’s value in taxes. And for a nearly $30,000 car, that probably means, for most of the recipients, shelling out $7,125 for the “free car.”
Comments
This is a surprise? I’m kind of stumped as to why the full story was even written. Maybe next he’ll break the whole “Sun goes up in the East, but goes down in the West” story.
Jake, tell me, would you be happy to pay $7,125 for a new Pontiac? Thats a lot nicer number then $28,500, at least in my opinion. And these people NEEDED cards, or at least that was my understanding when I read about this.
But yea, taxes suck.
Not too much in life is free, really free! But getting a $28,500 car for $7,000 is a bargain. The taxes will be added on to their income after they pick up the car. If they wait until after December 31, 2004 it will buy them some time until 2006 income tax time to get the money together, sell the car or whatever. But I sure would not forfiet it. Taxes do suck, but I would have loved the opportunity to have this particular problem to deal with!
Ummm drive today taxes tomorrow,
considering all of them walked in with nothing. But left with something. What is the big deal. Even Bob Barker makes them pay taxes. So just come on down to the tax office and bid for your payments!
Yes, they walked away with a nice car, but also a $7,000 debt. Yes, it’s a good deal for the car, but needing a care and being able to afford one (even at $7,000) are two very different things.