Trump does not understand

[VitaMan]

I heard him comment at one of his podium appearances this week that the tax benefit on new car purchases is this: you get a full deduction on your tax bill with the interest you pay.


But.......not correct. You get to lower your taxable income by reducing it by the amount of interest you paid. You don't get a 1 for 1 deduction on the taxes you owe.


He keeps giving the wrong figures on tariffs. He says China and the foreign countries are bringing in money to the USA from tariffs.


But.....not correct. It the the American importers who pay the tariffs.


How does Trump get away with all this ? He insults the reporters that ask questions about it, and never answers the questions.


Side Note: Noem was being questioned at a Senate hearing last week, and didn't even address or answer the questions. A question was asked, and she would respond talking about something completely different.

[elghund]

He understands. He just will never answer a question truthfully.

elg…

[RX792P]

More on the auto loan tax deduction (not a tax credit)
i.e the deduction reduces the income that you pay taxes on, not your actual taxes.

For 2025–2028, individuals can deduct up to $10,000 in annual interest paid on loans for new, U.S.-assembled personal vehicles. The deduction, available for loans initiated after Dec. 31, 2024, phases out for incomes over $100,000 ($200,000 for joint filers) and does not apply to leases or used cars.
This deduction can be claimed whether or not one itemizes deductions.
Eligible Vehicles: New cars, SUVs, vans, or motorcycles (under 14,000 lbs) with final assembly in the U.S. Consult the vehicle's 'monroney sticker' for final assembly location.


So your Lincoln Nautilus assembled in Ontario Canada is not an eligible vehicle, but your Genesis GV70 assembled in Montgomery AL is an eligible vehicle.

OTOH, Trump also keeps saying no tax on Social Security...it does no...it is actually a tax deduction for 2025-2028 for seniors 65+ starting with the 2025 tax year, offering up to $6,000 for single filers and $12,000 for married couples.

finished preliminary 2025 tax return and guess what...I owe a bit of taxes on my Social Security (yeah, it's a first world problem)...

And the no tax on overtime only applies to the overtime premium (the half in time and a half), not the full amount received for overtime.

[ICU 812]

What ever the details are, what I get from this discussion is that there is a tax related benefit that comes into play when someone finances a car.

The intent is to incentivize folks to finance a car . . .do I have that wrong?

[Yssup Rider]

Yes.

[elghund]

If the goal is car buying, Trump is making sure to make any qualifications so difficult no one can qualify……..

Then he can brag about the overall “Hey look what I did for you” of the bill and blame y for the fact no one can qualify……

elg…….

[RX792P]

delete

[Precious_b]

Originally Posted by ICU 812

What ever the details are, what I get from this discussion is that there is a tax related benefit that comes into play when someone finances a car.

The intent is to incentivize folks to finance a car . . .do I have that wrong?

Originally Posted by Yssup Rider

Yes.

I remember during one of the Bush administrations, you could practically write off the entire cost of a business vehicle purchase.

As a buyer of a new vehicle in the 2025 tax year, I don't see any IRS breaks from such. Will know when I see the accountant.

[RX792P]

Originally Posted by elghund

If the goal is car buying, Trump is making sure to make any qualifications so difficult no one can qualify……..

Then he can brag about the overall “Hey look what I did for you” of the bill and blame y for the fact no one can qualify……

elg…….

Well, there is this that shows the 'new car interest deduction' would seem to be skewed toward higher earners.

https://www.motor1.com/news/786156/n...00000-dollars/

According to new data from Cox Automotive, consumers who earn less than $100,000 a year account for just 37 percent of new-car buyers. That number was 50 percent in 2020.

While the number of consumers making less than $100,000 a year has shrunk, the share of buyers earning more than $200,000 has increased from 18 to 29 percent. In addition to the high transaction prices, monthly new-car payments have also reached exorbitant levels. The average new payment in the United States is nearly $750 a month, while 20 percent of new-car buyers pay $1,000 or more.

Motor1’s Take: This latest data is more proof that automakers are abandoning everyday consumers to focus on high-income earners. New car prices are higher than ever, with automakers continuing to end production for affordable models, pushing cost-conscious consumers to the still-expensive used market. It’s not easy out there for shoppers.

[ICU 812]

Originally Posted by Yssup Rider

Yes.

I interpret that as a positive response and to be confirmation of my stated understanding of the "benefit" in question.

With that said then , and in reference to other more detailed posts . . . .

what is the big deal?

What is the controversy?

Sounds OK to me, whoever had done it.

[elghund]

Originally Posted by RX792P

Well, there is this that shows the 'new car interest deduction' would seem to be skewed toward higher earners.

https://www.motor1.com/news/786156/n...00000-dollars/

But forcing them to buy specific models manufacturers want them to buy….high profit cars trucks and SUV’s……not affordable ones.

elg……

[RX792P]

Originally Posted by ICU 812

I interpret that as a positive response and to be confirmation of my stated understanding of the "benefit" in question.

With that said then , and in reference to other more detailed posts . . . .

what is the big deal?

What is the controversy?

Sounds OK to me, whoever had done it.

No problem...just another Trump administration claimed tax cut for 'affordability' that is not for the lower/middle class but is biased to higher earners.

“For millions of Americans, a car isn’t a luxury, it’s how you get to work, school, and childcare,” Bessent said on X.

“This deduction helps lower monthly costs and makes car ownership more affordable when families need it most. The tax cut also supports American workers by applying solely to U.S.-assembled vehicles, strengthening domestic manufacturing.”

[ICU 812]

It seems to me that a less expensive smaller car is already "more affordable' than a more costly SUV.

[RX792P]

Originally Posted by ICU 812

It seems to me that a less expensive smaller car is already "more affordable' than a more costly SUV.

Well, I'm forced to agree that a less expensive auto is 'more affordable' than a more expensive auto. DOH...
(similarly a used auto is 'more affordable' than same new model...but not eligible for the interest deduction)

Here's a list of the ~117 autos assembled in USA that would be eligible for the loan interest deduction.
Which ones are the 'more affordable'?

https://caredge.com/guides/cars-made-in-america-in-2026


BTW
Total Revenue Loss: The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) estimate the provision will cost between $57 billion and $66 billion over a 10-year period.
Annual Impact: Estimates suggest the deduction could cost approximately $5 billion to $6 billion annually.

[elghund]

Originally Posted by RX792P

Well, I'm forced to agree that a less expensive auto is 'more affordable' than a more expensive auto. DOH...
(similarly a used auto is 'more affordable' than same new model...but not eligible for the interest deduction)

Here's a list of the ~117 autos assembled in USA that would be eligible for the loan interest deduction.
Which ones are the 'more affordable'?

https://caredge.com/guides/cars-made-in-america-in-2026


BTW
Total Revenue Loss: The Congressional Budget Office (CBO) and Joint Committee on Taxation (JCT) estimate the provision will cost between $57 billion and $66 billion over a 10-year period.
Annual Impact: Estimates suggest the deduction could cost approximately $5 billion to $6 billion annually.

Mostly all uber expensive cars directed to force anyone who wants a tax deduction to buy what they are told to buy.

I didn’t see many Chevy’s, Fords or Chryslers of medium price on that list…although I may have missed one or two…..

Just make it blanket. All American manufacturers should be included across the board.

And don’t try saying Toyota Hyundai, Nissan, Mercedes and the like are US manufacturers……they are not.

elg……