Wednesday, September 22, 2004

Oprah Creates Conservatives

Undoubtedly you heard last week about the Oprah show where she gave all 276 people in her audience brand new, fully-loaded Pontiacs. The news was saturated with video clips of their wild celebrations at their newfound good fortune.

But according to the Chicago Sun Times, an unpleasant reality is beginning to set in for these Oprahphiles:
It turns out that free car wasn't so free.

That's because while Pontiac agreed to pay for most of the local charges -- things like state sales tax and licensing fees -- the recipients have to report the cars as income once tax time comes.

By adding $28,500 to someone's income, it can push them into a higher tax bracket -- which means they will have to pay about 25 percent or more of the car's value in taxes. And for a nearly $30,000 car, that probably means, for most of the recipients, shelling out $7,125 for the "free car."
Fortunately, however, they'll have some time to try to scrape together the money to pay off Uncle Sam's cut of their "gift":
Some recipients are going to wait a few months before actually picking up their cars so they can figure out how to pay for the taxes.

"We have to pick the car up between Oct. 1, 2004, and Feb. 28, 2005," said Nelson. "We've decided that we are going to wait until the first of the year so we can have all of 2005 and the first four months of 2006 to figure out how to pay for this."
But it's worth it for those soccer moms, I'm sure. I mean, what's the hardship in scrounging together seven grand next to the failed, one-semester education it will buy for some lucky Washington D.C. public school student or the six months of Social Security checks it'll provide for the old guy parking his Cadillac over at the country club?

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