See Section 179 for a FREE SUV!

A tax loophole to encourage small businesses is being abused at the expense of taxpayers and the environment.

The government has given business owners the chance to receive free luxury sport utility vehicles at the expense of taxpayers. Because of a tax loophole, any SUV weighing more than 6,000 pounds is eligible as a tax deduction (for up to $100,000) to any small business owner. This abuse allows 56 luxury SUVs – including H1 Hummers – to be purchased for less than the price of one economical car or truck.

As word of this loophole spreads, accountants, car dealers and automobile manufacturers are encouraging abuse of this legislation at taxpayers’ expense. For every 100,000 individuals who take advantage of this loophole, it costs the U.S. Treasury an estimated $1.4 billion. This misplaced funding places heavy burdens on younger generations who hold the responsibility of today’s poor investments.

With good intent, the bill was designed to encourage small-business growth by providing tax relief on the purchase of necessary service vehicles and equipment.

By classifying a business vehicle by weight and carrying capacity alone, anything from a Cadillac Escalade to a Mercedes G-class SUV can be considered necessary “equipment” for a small business. The title of “small business owners” not only includes the intended farmers and contractors but also doctors, lawyers, consultants, venture capitalists and real-estate brokers.

This loophole not only poses a financial burden on our nation, it also encourages a “bigger is better” mentality among auto dealers, manufacturers and the buying public. Automakers such as Subaru and General Motors are unveiling new, heavier versions of their luxury vehicles so they are eligible for this tax break. For example, Buick (GM) introduced a new luxury SUV for 2004 that weighs 6,001 pounds fully loaded, just heavy enough to take advantage of Section 179.

With fuel economies in the range of nine to 15 miles per gallon, SUVs are some of the highest-polluting vehicles on the road and contribute heavily to the greenhouse effect. Yet this legislation encourages their purchase over smaller and more fuel-efficient cars.

As students, this affects each and every one of us. That money is no longer only coming out of your parents’ pockets; it is coming straight out of yours. The funding for this tax loophole is draining our nation’s finances, increasing the national debt exponentially. We are the ones who will have to carry the burden of replacing the money that the government is so carelessly wasting.

The government is also, in allowing the tax loophole to stand, showing no regard for our environment. We have the technology to make fuel-efficient, environment-friendly SUVs, but this loophole pushes the market toward larger, more environmentally destructive vehicles. Whether you’re concerned with salvaging your paycheck or your environment, it is easy to see why we, as students, need to take action.

Abuse of Section 179 can only increase in the upcoming years, as word of this tax loophole spreads. In order to prevent further squandering of taxpayers’ money in the next fiscal year, please visit to contact your representative and express your support of closing the SUV tax loophole. Do you want your tax dollars going toward the purchase of someone else’s luxury SUV?

This opinions piece was drafted by Sonya Khan, Ellen Wheeler, Ronald Stimmel, Matthew Schick and Kristen Wayne at Georgetown University. Send comments to [email protected]