Like a Camel Through the Eye of the Tax Code

Congress moves to close SUV-friendly tax loophole

It looks like Congress may soon close one of the U.S. tax code’s most egregious provisions (and that’s quite a distinction!). In 2003, lawmakers raised the business-equipment tax deduction to $100,000, clearing the way for a massive luxury SUV to be written off as a business expense — if it was used “primarily” for business purposes, of course, wink, wink. The American International Automobile Dealers, an industry group, claimed the tax break stimulated the economy, citing, uh, a 6 percent rise in SUV sales. Automakers, deeply aware of the injustice of it all, advocated that all vehicles be given the tax break. But consumer, tax-fairness, and enviro groups suggested that perhaps the federal government shouldn’t be subsidizing the purchase of polluting vehicles at all. In a large tax bill likely to be approved by the House and Senate by the end of the week, lawmakers reduced the deduction to $25,000. And rejected a provision that would have given tax breaks to buyers of hybrid and other clean cars. But hey: baby steps.