The shortages in barrels of oil available…..along with our great reduction of refining capacity…….along with growth of “Emerging Markets – China and India”….along with lack of Regulations regarding major Public Transportation vehicles……along with aging non-fuel efficient Airplanes, Trucks and Rail vehicles, along with speculation in the Energy Markets on the various Stock Exchanges around the world……have united into the perfect storm which almost guarantees $6 dollar a gallon gasoline and $8 dollar a gallon diesel fuel.
So, what does this all mean? The price of Airline tickets will double very quickly. The price of transportation across our nation will double. The cost of goods and services will skyrocket by a minimum of 33% across the board. Add to this the Public Bankruptcies to come i.e., Vallejo, California and the continued slide in Real Estate values around the country…..and we are talking a serious hit on Public Services and Safety budgets.
So, who is at fault? President George Bush? Not exactly! The Congress? Not exactly! The Capitalistic System? Not exactly! The unplanned expansion of of Third World countries? Not exactly! No, we can blame the Oil Companies, we can blame the Oil Producers, we can blame each other….but all of that will do us no good. Should we blame those that didn’t want to use “Alternative Fuels” 20 years back? Not if you look at the Global effect the use of Ethanol is now having on the World Food Supply. So, what should the Energy Piglets of the United States do now?
Well, we need to take serious action! We need to ban those “Gas Guzzling SUV’s”! No more sold in the United States ever! No more “Gas Guzzling” 3/4 Ton Monster Pick-ups except for Commercial use that requires NO personal use….ever! We need to Regulate Energy Companies to sustain affordable energy for residential customers! This should be a Federal Mandate! Everyone in the United States should have the ability to pay their electrical or heating bill…..every month! Water, Electricity, Gas and Roads should be the perview of either Cities, Counties, States or the Federal Governments. We need a base to grow from…and without controls and regulations on these markets….everyone will soon be priced out of the market. This is except those few rich people that are left. By the way, if you want to buy an SUV that is banned: Sure, go right ahead: but pay an 100% Energy Tax! Used SUV’s should be charged three times the normal License fee until they are 10 years old or older. The same goes for the Monster Pick-up Trucks used for personal use!
We need a new CARB (California Air Resources Bureau) Rule which says: Any NEW car sold in the State of California must get 50 Miles Per Gallon or more beginning immediately!
The time has come to crush our SUV’s….and move on to a new world of technological demands for Automobile Manufacturers around the world.
I don’t agree with getting rid of the SUVs because when you haul a lot they are way more efficent than driving two or three cars.
But, I don’t agree with the special depreciation allowances for them. I can’t tell you how many people have called me about the special depreciation allowances for vehicles that weigh more than six thousand pounds.
As you know, I am genetically green so I would always say, “you know, depreciation is a timing issue only. You will spend more on gas than you will gain from early depreciation.” The response is always the same, “I don’t care about the price of gas, I want my tax deduction.”
My current Kipplinger Tax Letter says that a bill currently in Congress would limit first year write-off’s for heavy SUVs. Even if it does pass, which I doubt, the new law would give a write off of $11,260. This is still almost 400% of the first year depreciation limit for a fuel efficient vehicle.
Andy Favor, CPA
73rd Assembly District Candidate
*Andy,
Thanks for your interest in saving America for
the Oil Barons and Sheiks of the Middle East.
Just kidding…however, remember when the Russians
had to go through “Shock Economic Therapy”…right
after Democratization? Well, we are afraid taking
a “measured response” at this time is going to be
too little and much too late to do much…in fact it might do irreparable harm. We have to get on with it. If we can switch from Analog to Digital TV’s in one felled swoop….we need to do the same with the Big Escalades, Tundras or Navigators…et al! No vehicle should exceed 4000 pounds…none of them!
To the Orange Juice readers,
Does anyone have any strong opinions on switching the preferential depreciation that currently favors SUVs? (Currently if you buy a SUV you can take $25,000 plus I think about $12,000 in bonus depreciation. Below 6,000 pounds, first year auto depreciation is about $3,000 or so.)
I would not be opposed to allowing vehicles that use some high percentage of carbon fiber to get the accelerated depreciation. That way we would have an incentive for auto manufacturers to get the weight down below the 4,000 pounds that Ron and Anna mentioned above.
This is not really a big issue for my State Assembly race. But, I would like to know people’s opinions on vehicle preferences and carbon fiber.
Well Andy, you libertarian CPA, you’re way over my head but you make that sound pretty sensible. Just don’t touch my social security!
Just to give an example of how big of an incentive the special preference is. Several years ago a neighbor of mine told me that all the partners in his law firm were given Cadillac Escalades as year end Christmas bonuses. I would bet that the partners would rather have had BMWs. But because the Escalades weighed over 6,000 lbs they would be written of. That was before the above $25,000 and $12,000 bonus limitations were put in place. There are some personal use of the vehicle issues that would limit the full write off, but this preference does encourage a lot of people to get a bigger car than they truly need.
If you don’t like these things, the only time you can get the politicians attention is at election time. So hammer them. Endorse the the Libertarians. Hammer Larry for endorsing Diane Harkey.