August 27, 2009
Now that “Cash for Clunkers” has rolled to a stop and the dealerships are still waiting for most of their reimbursements, the consumers who rushed out to take advantage of the government giveaway got some distressing news today: Apparently the money they saved on their shiny new cars will be taxed at regular income tax rates!
So if a family’s Federal tax rate is 25% and their state tax rate is 15% they will owe approximately $1,200 if they merely got $3,000 off and about $1,700 if they got $4,500 off!
And of course the taxes will be cash, even though they just got a discount at the dealership.
Ah, well. The government giveth and the government taketh away!
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