Washington, DC – The following is a written statement by Aileen Roder, Program Director at Taxpayers for Common Sense, a national budget watchdog organization on the introduction of the “SUV Business Tax Loophole Act”

Tomorrow Senator Barbara Boxer (D-CA) is expected to introduce legislation to close a glitch in the tax code that allows businesses to deduct a majority of the costs in the first year when they purchase the largest Sport Utility Vehicles (SUVs) on the market.

While most Americans are having a hard time keeping up with their car payments, the government is practically buying businesses massive SUVs.

The fact that this tax break is one of the most generous in the tax code begs the question of why a plastic surgeon should be able to take an $88,000 tax deduction for the price of a $102,000 H1 Hummer in the first year of purchase. The Boxer legislation is badly needed to correct the unintended consequences of a tax break that is supposed to help family farmers, but has been exploited by rich businessman to pad their bottom line.

The increased market for SUVs has blown a hole in the original intent of this tax break. Currently there are at least 38 vehicles that qualify for the break, the majority of which are not being used as a work vehicle – the original intention of this provision in the tax code.

If this glitch is not fixed, the Bush economic stimulus proposal will triple the benefit for businesses that purchase Sport Utility Vehicles. If the administration’s number one energy priority is really to reduce our nation’s dependence on foreign oil, we need to do away with a tax break that gives businesses an incentive to buy the biggest gas hogs on the road.

Contact: Keith Ashdown
(202) 546-8500 x110