Nov 12, 2008 11:16 pm US/Eastern
New Plan To Help Auto Industry In The Works
BALTIMORE (WJZ) ―
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Soon the auto industry may be getting a billion dollar bailout of its own, but one Maryland lawmaker says it's not enough just to help them--you need help, too.
CBS
Soon the auto industry may be getting a billion dollar bailout of its own, but one Maryland lawmaker says it's not enough just to help them--you need help, too.
Dennis Edwards has more on how consumers may also be getting a helping hand.
A new plan just launched by Sen. Barbara Mikulski to help the auto industry is in the works.
Congress gets this proposal next week. It does something American car buyers haven't seen for decades: makes auto interest and sales taxes deductable.
Katrina Hill and her son Gary could really use a new car for grocery store trips, but in this economy, a new car was out of the question until Senator Barbara Mikulski proposed making interest and sales tax on car purchases tax deductable.
"Before, I just said I would ride this thing until the end. But now if something like that is gonna happen, that would make me reconsider purchasing a car," Hill said.
She is rethinking her plans because on the average $25,000 car, Mikulski is pushing legislation that would produce a $1,500 tax deduction between Nov. 12 and the end of next year.
Mikulski's idea could be the answer to an auto industry prayer, an industry that's literally on the brink of bankruptcy.
Maryland's 14% decline in auto and truck sales is the worst in a quarter century. Nationally, Congress is proposing a $25 billion bailout for the auto industry's big three. GM lost $2.5 billion in the last quarter alone and is on the verge of running out of money.
Potential car buyers like Katrina could help turn things around if Mikulski's legislation passes.
"That would be a great deal for me," she said. "Any breaks I can get now would be real good."
Buyers are still subject to more strict credit requirements, but Mikulski is betting a tax deduction could at least get more buyers to try and buy a car. The tax deductions would not be available to households making more than $250,000 a year, though.
Mikulski says her plan is also good for the environment because newer cars are more fuel efficient. She already has support from key leaders in the Democratic party.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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