Obama Economic Stimulus Plan May Include Help for Car Buyers

The House has already passed its version of President Obama's economic stimulus package and it was somewhere in the neighborhood of $815 billion dollars. It passed without one Republican voting in the affirmative. The Senate is having a little more difficulty, trying to cut out some of the pork and frivolous spending but have somehow managed to raise the price tag over $900 billion.

There is good news in all of this, believe it or not. Sen. Barbara Mikulski, D-Md., won a 71-26 vote to allow most car buyers to claim an income tax deduction for sales taxes paid on new autos and interest payments on car loans. This is a very significant stimulus and is estimated to be worth $1,500 on a $25,000 car. Of course, the down side is having to wait until you file your taxes next year to get the money. Getting a $1,500 refund next year would sure help to make a few payments though.

The best part of the proposal in my estimation is that the interest on the auto loan is tax deductible. It is almost like getting a 0% loan...almost. I am old enough to remember the days when interest paid on credit cards was tax deductible. Now that really helped get the big refunds!