The bigger the toy the larger the tax break

Driving around in a gas-guzzling, oversized SUV or Hummer may make you eligible for a tax break if the vehicle is used partially for business reasons.

These Hummer H2s, costing $50-$60,000, may provide a tax break of nearly $38,000, according to the Seattle Post-Intelligencer. This is a nice little government subsidy for those who choose to purchase these humongous, ugly land yachts. If these large automobiles weigh in at 6,000 pounds or more, they qualify under the same exclusion as trucks and tractors.

This tax break was intended to help those who really need this large machinery for their work, such as farmers. Under a loophole in the legislation, small business owners and the self-employed also qualify for this tax deduction. Even those who are not farmers or construction workers qualify for this deduction if the SUV or Hummer is being used for their business more than 50 percent of the time.

Among critics of the loophole is the non-profit Washington, DC group, Taxpayers for Common Sense, who estimate that the federal treasury lost $840 to $987 million in one year over the SUV tax reward. The tax deduction is limited to the overall business income or up to $75,000; whichever is less. This is meant to pay back accelerated depreciation on business equipment. For those who use the car for business reasons, this is an extreme incentive to own one of these monstrosities.

President Bush felt the plan would help increase interest in investing in the economy and small businesses. Doctors, lawyers, independent contractors and anyone else who has their own business will qualify for the deduction. So a doctor who uses the truck specifically to tote himself around (not 30 pounds of construction equipment and four other workers) will qualify easily.

With the $75,000 limit, most SUVs can be written off completely in the first year alone. Because of this, business owners will choose the larger, less fuel-efficient vehicle over a smaller car with no tax break even if they would be more than fine using a smaller sedan or compact car for their business purposes. Unless the gargantuan size is really necessary, people do not need to drive such large vehicles.

The size of these trucks makes them difficult to see around, making the freeways even more dangerous. They contribute more pollutants to the atmosphere than smaller, fuel-efficient cars.

The gas tanks are expensive to fill, sucking up more of a non-renewable natural resource. The tax break applies only on the least fuel-efficient, largest SUVs. Tax breaks for vehicles that are better for the environment, such as hybrid cars, qualify for a mere $4,000, pennies compared to the gigantic tax break for larger cars, not to mention that this is just another tax break that benefits the rich. But watch out; the Sierra Club is urging the IRS to take aggressive action in auditing those who take advantage of the loophole. It is difficult to tell, however, because the tax write-off can be hidden in other business expenses.

Smaller cars that are environmentally friendly, emit less smog and are fuel-efficient, should get the larger tax break. This country needs to take the lead working towards protecting the little natural resources left on the planet, not ignore the problem completely, which is what these tax cuts are doing. Our country creates more pollution than any other, and yet we are the only ones who seem not to care a bit about it.

Cars that qualify include the BMW X5, Cadillac Escalade ESV, Ford F150 Styleside 4WD, Hummer H1 and H2, Chevrolet Trailblazer and the Dodge Durango. Those classified as luxury vehicles do not have nearly as generous a loophole.

Section 179 of the tax code provides more information.