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This would affect many of us with old iron no matter how many wheels it has
Tim
Senator Eyes Collector Cars as Revenue Source
New York Times article Mar.28, 2011
Auto Enthusiasts who dodge taxes are in Schumer's crosshairs
Washington, D.C. - AP. Senator Charles Schumer (D-NY) held a press
conference today in the Capitol's rotunda and stated that he is in the
process of drafting a bill that will create a federal tax on all
collector, antique, historic, special interest, hot rods and race cars.
"This country is operating at a huge budget deficit," said Senator
Schumer, "thanks to the previous administration's failure to seek new
sources of revenue. We can no longer continue to just raise the taxes we
already have. We are reaching the point of diminishing returns. We must
find new sources of revenue. "There are more than one million collector
cars in this country,"said Schumer, "and many of them are unregistered
and untaxed. These vehicles represent sometimes sizeable assets which
often appreciate from sale to sale. Much of these capital gains remain
untaxed. It's about time these collectors—all of whom are rich—begin to
pay their fair share. I've never heard of a poor person owning a
Corvette, Ferrari, Deusenberg or Cobra." Citing the results of this
year's automobile auctions in Scottsdale, Arizona as an example,where
reported sales were in the tens of millions of dollars, Schumer said,
"We're not talking about rusty old clunkers, here. Some of these cars
represent the pinnacle of automotive history. Collectors who buy and
sell them often do so privately. Some transactions are in cash and
others include trades. All of these are under the Internal Revenue
Service's radar. Well, that will soon end."Each state has different laws
and requirements for collector cars. Those which tax them as personal
property often use outdated values. An owner can pay taxes on a car the
state determines is worth $5,000 and then turn around and sell it for
$100,000 or more. Until now, all of this has been the purview of each
state. Schumer's law will sidestep all state laws by levying a federal
tax in addition to anything the individual states do. This new federal
tax will be similar to the present federal tax on gasoline, which is in
addition to whatever a state assesses. Part of the Schumer law includes
the IRS opening up a special department to deal with collector cars.
Values will be calculated annually and owners will be required to list
all cars they own on their 1040 tax form. Because not all vehicles are
registered, and thus may not be known to the individual states' motor
vehicles departments—especially race cars which are not driven on public
roads—the IRS will make use of the existing network of individual
collector car enthusiast organizations across the country. Many of these
car clubs maintain accurate registries which detail each car by its
vehicle identification number and present or last known owner and their
location. Assembling an all-inclusive federal database in conjunction
with these registries will be one of the first steps in implementing the
new law. Once the database of owners is cross-referenced with an annual
index of current collector car values, every collector or race car in
the country can be taxed at a fair rate. Initially, Schumer says, it
will be 10% but that would rise depending on the type of car, number
produced and condition. "Collectors are willing to pay more for certain
cars," said Schumer, "because of their history or the small number that
were produced. These factors increase a vehicle's worth to buyers, so
why should these cars not be taxed at a higher rate? It's no different
than our current progressive income tax rate." It is estimated that an
annual 10% tax on all collector cars presently owned by American
taxpayers—at their prevailing market value—would be more than
$250,000,000. In four years the coffers of the federal government could
be fattened by a billion dollars. "That's only a conservative estimate,"
said Schumer. "Nobody knows exactly how many collector cars are out
there. But by this time next year, WE will know. Owners of these cars
will finally have to pay up.Their free ride—on the backs of the poor—is
over."
Tim
Senator Eyes Collector Cars as Revenue Source
New York Times article Mar.28, 2011
Auto Enthusiasts who dodge taxes are in Schumer's crosshairs
Washington, D.C. - AP. Senator Charles Schumer (D-NY) held a press
conference today in the Capitol's rotunda and stated that he is in the
process of drafting a bill that will create a federal tax on all
collector, antique, historic, special interest, hot rods and race cars.
"This country is operating at a huge budget deficit," said Senator
Schumer, "thanks to the previous administration's failure to seek new
sources of revenue. We can no longer continue to just raise the taxes we
already have. We are reaching the point of diminishing returns. We must
find new sources of revenue. "There are more than one million collector
cars in this country,"said Schumer, "and many of them are unregistered
and untaxed. These vehicles represent sometimes sizeable assets which
often appreciate from sale to sale. Much of these capital gains remain
untaxed. It's about time these collectors—all of whom are rich—begin to
pay their fair share. I've never heard of a poor person owning a
Corvette, Ferrari, Deusenberg or Cobra." Citing the results of this
year's automobile auctions in Scottsdale, Arizona as an example,where
reported sales were in the tens of millions of dollars, Schumer said,
"We're not talking about rusty old clunkers, here. Some of these cars
represent the pinnacle of automotive history. Collectors who buy and
sell them often do so privately. Some transactions are in cash and
others include trades. All of these are under the Internal Revenue
Service's radar. Well, that will soon end."Each state has different laws
and requirements for collector cars. Those which tax them as personal
property often use outdated values. An owner can pay taxes on a car the
state determines is worth $5,000 and then turn around and sell it for
$100,000 or more. Until now, all of this has been the purview of each
state. Schumer's law will sidestep all state laws by levying a federal
tax in addition to anything the individual states do. This new federal
tax will be similar to the present federal tax on gasoline, which is in
addition to whatever a state assesses. Part of the Schumer law includes
the IRS opening up a special department to deal with collector cars.
Values will be calculated annually and owners will be required to list
all cars they own on their 1040 tax form. Because not all vehicles are
registered, and thus may not be known to the individual states' motor
vehicles departments—especially race cars which are not driven on public
roads—the IRS will make use of the existing network of individual
collector car enthusiast organizations across the country. Many of these
car clubs maintain accurate registries which detail each car by its
vehicle identification number and present or last known owner and their
location. Assembling an all-inclusive federal database in conjunction
with these registries will be one of the first steps in implementing the
new law. Once the database of owners is cross-referenced with an annual
index of current collector car values, every collector or race car in
the country can be taxed at a fair rate. Initially, Schumer says, it
will be 10% but that would rise depending on the type of car, number
produced and condition. "Collectors are willing to pay more for certain
cars," said Schumer, "because of their history or the small number that
were produced. These factors increase a vehicle's worth to buyers, so
why should these cars not be taxed at a higher rate? It's no different
than our current progressive income tax rate." It is estimated that an
annual 10% tax on all collector cars presently owned by American
taxpayers—at their prevailing market value—would be more than
$250,000,000. In four years the coffers of the federal government could
be fattened by a billion dollars. "That's only a conservative estimate,"
said Schumer. "Nobody knows exactly how many collector cars are out
there. But by this time next year, WE will know. Owners of these cars
will finally have to pay up.Their free ride—on the backs of the poor—is
over."
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