The National Automobile Dealers Association (NADA) has announced its support for proposed legislation by U.S. Sen. Barbara Mikulksi, D-Md., which seeks to stimulate the struggling economy by boosting retail automobile sales.
Mikulski proposes granting a tax incentive for consumers who purchase a new car or truck. New vehicle owners would be able to temporarily deduct sales and excise taxes as well as interest on auto loans from their income taxes.
"Credit is available again but lagging consumer confidence is still depressing new car and truck sales 25-30 percent," NADA Chairman Annette Sykora says. "Now is the time for Congress and the White House to implement a stimulus package that is focused on 'Main Street.'"
Sykora, a dealer from Lubbock, Texas, notes that since auto sales make up almost one-fifth of the nation's retail economy, a boost in new vehicle sales would create a wave of economic activity which would be felt through every level of the economy, from Main Street to the factory floor, according to a release from NADA.
"Congress and the president must consider leveraging the incredible economic engine of the automobile industry to jump-start our shaky economy," adds Sykora.
The "Auto Ownership Tax Assistance Amendment" would make interest payments on car loans temporarily tax deductible for the remainder of 2008 through the end of 2009. Congressional leaders have indicated that consideration of a post-election stimulus package is possible to provide emergency assistance to the struggling auto industry. Prior to the 1986 tax reforms, taxpayers were able to deduct auto, credit card and other types of debt from their annual tax bill.
Additionally, NADA suggests a "cash for clunkers" program to create an economic and environmental benefit by getting older model vehicles off the road permanently. Up and successfully running in several states, the initiative offers cash incentives for people to trade in older vehicles and purchase new cleaner and more fuel-efficient cars and trucks.
"With great deals and incentives on vehicles, credit is available for consumers through a network of local banks and with some of the highest quality and fuel-efficient vehicles available ever, we just need to give the consumer the motivation and the confidence to visit their local dealership to see that a new car purchase is in reach," Sykora adds.