Tax break

Tax break

While Congress is poised to debate a bailout plan for the nation’s Big Three automakers, Sen. Barbara Mikulski is planning to introduce legislation that she said is intended to save jobs and support the U.S. auto industry and consumers.

Billed as the “Auto ownership Tax Assistance Amendment,’ the legislation would give consumers a tax break if they buy a new passenger vehicle through the end of the year.

The temporary tax break is intended to stimulate demand at car dealerships across Maryland and the rest of the nation, Mikulski said. Consumers would be able to deduct the sales tax and interest paid on a car loan if a vehicle is purchased by Dec. 31. The tax break is for cars priced under $49,500.

By Mikulski’s estimate, a family that purchased a $25,000 minivan would salve $1,553. Only families earning less than $250,000 or individuals making less than $125,000 a year would be eligible for the break.

The tax breaks would be applied to all automobile manufacturers, including foreign companies, under international trade regulations.

Maryland, like other states, has seen its auto dealerships hit hard by the economic downturn. Mikulski estimates that the state has lost about 500 jobs so far this year because of automobile dealership closures.

There has been criticism in some quarters about a bailout of the auto industry. The temporary tax break being proposed by Mikulski may have a better chance at passage than some larger economic rescue plan.

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