by Canuk » Wed 06 Aug 2008, 14:09:11
$this->bbcode_second_pass_quote('MrBill', 'A')ny government subsidy that favored domestic versus foreign imports would in any case fall foul of WTO obligations triggering tit for tat tariffs on US exports that are currently at record levels due a weak US dollar. Any subsidy paid to American car makers for small cars at the exclusion of foreign automakers - $2000, $5.000, $10.000 - would get capitalized into the price of US made small cars. That would benefit car makers at the expense of taxpayers. There is no way the car makers will pass along that windfall except in rebates that narrow the price difference between domestic made cars and similar imports. I can see the car companies working on those spreadsheets right now.
Light Trucks which includes SUV's have been subsidized for years.
They have been shielded from foreign competition by tariffs and subsidized by various loopholes in the tax laws and environmental regulations.
There are many articles on the 25% tariff, here's one that explains the histroy of it:
link$this->bbcode_second_pass_quote('', '
')The big exception is the "light truck." The 25 percent tariff on pickups went on in 1930, fell to 8.5 percent, went back up and is still at 25 percent today. Virtually all other cars -- from SUVs to sedans, golf carts, and sports cars -- have a 2.5 percent tariff. (Buses and tractors are minor exceptions, with tariffs of 2 percent and zero.) Why the anomalous treatment of pickup trucks? This stems from a trade dispute of the 1960s. The European Community, the six-nation ancestor of today's 25-country European Union, had blocked American chicken sales. The Johnson administration responded by raising the pickup truck tariff from 8.5 percent back to 25 percent. Ducking each of the big trade agreements since the 1960s, the pickup tariff has stayed there ever since.
$this->bbcode_second_pass_quote('', 'T')he total cost of the loophole hasn't been calculated by the government, but Taxpayers for Common Sense, a non-partisan Washington watchdog group, estimates the SUV tax loophole could cost taxpayers between $840 million and $987 million for every 100,000 vehicles sold to businesses...
...There are long-standing limits on deductions to prevent taxpayers from subsidizing luxury-car purchases. But the limits do not apply to 38 light trucks that weigh 6,000 pounds or more, including the Cadillac Escalade, Dodge Durango, Excursion and Lincoln Navigator.... Tax experts say the light-truck tax loophole was originally targeted for farmers...