Congress Considering Tax Deductions on New Cars

Senator Barbara Mikulski (D-Md.) announced that she plans on introducing a bill next week to Congress that would make the interest on car loans tax deductible. The sales and excise taxes on a new car would also be tax deductible. Under Mikulski’s proposed bill, any new car purchased before Jan. 1 2009 would be eligible.

On a $25,000 car, the tax deductions would come out to $1,553, according to Bloomberg. Combined with the massive incentives manufacturers are offering, new car buyers can get much better value for their dollar than ever before.

"Targeted, temporary and timely assistance to the auto industry makes sense,” Mikulski said. 
Congress will also be considering several different ways it could directly bailout the auto industry next week. The tax incentive would be limited to families who make less than $250,000 per year or individuals who make less than $125,000.