Archive for February 17th, 2009

the_royal_scam_album_coverI was listening to outtakes from Steely Dan’s Royal Scam while reading the economic news and more details on the “787 Bill.”

It turns out that lawmakers added tax breaks for motorcycles to the stimulus package to help home-state industries.  Tax deductions were added to the $787 stimulus bill after senators (Bob Casey, D-Pa; Christopher Bond, R-Mo; Russell Feingold, D-Wis; Herb Kohl D-Wis) lobbied hard during 11th hour negotiations to obtain federal tax breaks on motorcycle purchases.

I’m sure there is a sound bite in one of the local newspapers evangelizing how motorcycles of tomorrow are now ensured to be built by Americans, for Americans…  Under the stimulus legislation, purchasers of new motorcycles (or new cars, light trucks, RVs) will be able to deduct the sales tax they pay through the end of this (2009) year.  Automobiles and light trucks were previously included in the bill, however, the addition of motorcycles and RV’s added another $100M to the estimated $1.7B cost of the tax break to consumers.

It’s unclear if the bill has an engine displacement size constraint.  States without a sales tax and the stimulus bill will have no effect on purchases are — Alaska, Delaware, Montana, New Hampshire and Oregon.  Arizona has a transaction privilege tax (TPT) that differs from a “true” sales tax in that the tax is levied on the gross receipts of the vendor and is not a liability of the consumer.  However, most vendors do pass on the tax to consumers.

Does this represent a new beginning for motorcycle sales or a last gasp?

Photo courtesy Steely Dan.

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