The Truth About Cars » Tax http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 18 Jul 2014 20:52:49 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Tax http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Cash Strapped California Exploring Vehicle Miles Traveled Tax http://www.thetruthaboutcars.com/2014/05/cash-strapped-california-exploring-vehicle-miles-traveled-tax/ http://www.thetruthaboutcars.com/2014/05/cash-strapped-california-exploring-vehicle-miles-traveled-tax/#comments Wed, 07 May 2014 18:52:33 +0000 http://www.thetruthaboutcars.com/?p=817602 Click here to view the embedded video.

California is exploring the possibility of a voluntary Vehicle Miles Traveled (VMT) Tax to help make up for the shortfall in highway funding that is derived from the increase in vehicle fuel efficiency.

The VMT was proposed by State Senator Mark DeSaulnier (D-Concord), who says that the gas tax is no longer a sufficient source of revenue for highway maintenance. Both Oregon and Washington have voluntary VMT programs, with Oregon charging 1.5 cents per mile.

The spectre of a gas tax funding shortfall was first explored by former EIC Ed Niedermeyer back in 2011. Rather than summarize Niedermeyer’s conclusions, I’d urge you to read it in full for a primer on the issue.

As it stands now, the United States has very low gas taxes relative to the rest of the world, and increasing it would be political suicide for many politicians. Americans have oriented their lifestyle towards driving long distances in big trucks and SUVs. Anyone attempting to mess with that formula is sure to have a very short political life.

The irony is that in the endless quest for fuel efficiency, gasoline consumption – and by extension, gas tax revenues – have fallen to the point where they are no longer sufficient to pay for highway maintenance and badly needed infrastructure repairs. The VMT is being proposed as an alternative in some jursidictions.

Of course, the VMT has numerous implications, including privacy concerns. The current climate is already somewhat hostile to further government intrusion, given the recent NSA spy scandal. With driving considered as one of the last activities that is largely free from data logging or excessive government oversight, the idea of tracking, via GPS technology or other methods.

Beyond that, there are likely incentives associated with a move to VMT. Will people drive less, and avoid paying the tax? Will motorists hang on to older vehicles longer, in an attempt to avoid being tracked, which in turn weakens sales of newer, fuel efficient cars? The whole thing seems like a giant Catch-22. It’s not the last we’ll hear of it.

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Hammer Time: Bankrate.com And The Economics Of Car Ownership http://www.thetruthaboutcars.com/2013/10/hammer-time-bankrate-com-and-the-economics-of-car-ownership/ http://www.thetruthaboutcars.com/2013/10/hammer-time-bankrate-com-and-the-economics-of-car-ownership/#comments Mon, 21 Oct 2013 14:08:19 +0000 http://www.thetruthaboutcars.com/?p=629138 car-ownership-costs

One thousand, nine hundred, and fifty two dollars.

That is how much the average Georgian is supposed to pay in tax, title, and registration fees every year according to Bankrate.com.

When I read that factoid, my eyebrows almost flew off my head. The amount had no cents, and the statement made no sense because I happen to be the guy who collects the taxes from my customers and sends them to the state. Only a $28,000+ car purchase every single year would make this possible, and Georgia is a notoriously poor state. Out of a population of nearly 10 million, our state registered fewer than 300,000 new vehicle sales in 2012.

I quickly concluded that Bankrate.com had done little homework except to launched a PR campaign, under the guise of a study, that was heavy on the numbers and light on the facts.

I also decided to read through the list since 49 other states were also given their daily dose of tax calculations. Immediately, I saw enough red flags to warrant a bit more detail.

 

New Jersey, my former high tax home with potholes aplenty and the infamous New Jersey Turnpike, supposedly had less than half the taxes of Georgia ($915 vs. $1952).

Really??? What else? Well, the 0% sales tax and emission-free owners in Wyoming apparently paid more in vehicle taxes and fees ($1643) than the People’s Republic of New York ($1146).

The only word that came to my mind when I want down the list of states was, “Fugheddaboudit!” As a car dealer and former auto auction owner who did business with customers in all of these states over the last 10 years, none of these findings made any sense to me. So after about 400 mainstream media outlets, from Fox to CNN, publicized the study without so much as a blink of forethought over the next 24 hours, I decided to go about the process of finding out the truth of the matter.

Little did I know that when it comes to calculating taxes, no government makes it easy.

The first step was contacting a government official who could provide me with a clear compass as to where to go.

tim

Tim Echols, a Commissioner for the Georgia Public Service Commission, turned out to be that guy. Back when I started in the auto auction business as a ringman, two of Tim’s brothers worked with me as auctioneers. Tim grew up selling popcorn and peanuts at his family’s auto auction and when it came time to ask for help, I received guidance from him within minutes.

“A lot of it is public. Google “office of planning and budget” and “georgia.” If it has to do with vehicles, the other route is asking the Dept of Revenue Commissione…. to assist.”

The Google search yielded this site and this report. It just so happened that I began my career as a financial analyst and soon, I had a short list of line items that would make for a first draft of what would become a surprisingly intricate study.

Since New Jersey was my former home with a similar sized population to Georgia, I decided to use that state as a baseline comparison. Gas taxes and government insurance fees were already calculated in the “gas” and “insurance” columns at Bankrate.com. This freed me to focus on the taxes and fees related to buying and keeping the car. Within about 30 minutes, I created a very basic spreadsheet which summarized the sales taxes, tag fees, title transfers, and annual registration costs between the two states.

New Jersey Georgia
Sales and/or Title Tax 7% 6.5%
Registration Renewal $35 to $85 $20
Emissions $20 $20
One-Time Tag Fee $0 $20
One-Time Title Processing Fee $60 to $85 $18
Tolls The NJ Turnpike Minimal to None

The chance of New Jersey having less than half the tax burden of Georgia when it came to vehicle ownership, was about the same chance of the New York Giants making it to the playoffs this year. Or in auto enthusiast terms, the same chance of Chevy retiring the Corvette nameplate and re-introducing the model as an Aveo.

At this point I had many of the right ingredients for a solid rebuttal, and it was time to gauge interest with a few media outlets.

Marty Padgett, a long-time automotive journalist and Editorial Director at High Gear Media, was interested. So was Justin Hyde, the editor-in-chief of Yahoo! Autos. After a pitch and a couple of brief Facebook conversations, I had the means to invest the time and the further analysis that this type of study would quickly require.

I decided to keep my findings open to all parties, at all times. It was the fair thing to do. I shared my work with heads of government agencies, deputy directors, and special assistants who are constantly immersed in managing the never-ending labyrinth of government data. When a certain statistic was unavailable, such as the average cost of vehicles purchased in the two states, I was either able to eventually find the right contact, or find the right data that would let me generate those numbers.

All of this research was familiar territory for me. When I helped take companies public back in my earlier days as a financial analyst, I had to do the same exact thing in the private sector. Collect data within a company and find the truth of how they were actually using those resources. This takes time and a thorough auditing of your numbers. Once the numbers were confirmed from a variety of sources, I constructed a ‘fail-safe’ simulation for the average vehicle owner. A spreadsheet that reflected the average vehicle age (11.5 years), purchase price ($8500 average in Georgia), and ownership period (6 years in Georgia).

When the numbers were in, the Bankrate.com estimate of $1,952 in annual taxes for the average Georgian turned out to be as far off as Mercury is from Pluto.

The real cost was about $115 a year in Georgia before taking into account gas taxes, state fees for insurance and other minor costs that weren’t part of Bankrate.com’s “tax” calculation. To me all those state collected revenues are nothing more than hidden taxes.  A tax is a tax in my world. But to keep this comparison consistent, I used Bankrate.com’s methodology for allocating certain taxes to other categories.

To add value for my audience,  I also reported on other hidden costs of ownership that are rarely included in these studies: emission related repairs, toll roads from private companies, road construction and maintenance, and police speed traps that to varying degrees are also part of the hidden cost of car ownership.

My findings were published at Yahoo (click it!) and covered at High Gear Media as well. However, one of the lessons I learned early on in this business is that most media outlets rarely, if ever, correct their findings if the information came directly from a third-party source. The New York Times, CNN, and hundreds of other media outlets have to deal with countless studies that are often done more for shock value than for ethics and integrity. In fact, the later are notable exceptions to the rule.

All it often takes to get a “study” out there, is good PR. Honesty is optional.

So when you read about some sensationalized statistic that is blathered about in the mainstream media, remember the age old words of Mark Twain. “There are lies, damn lies, and statistics.” That is why part of our hard work at The Truth About Cars includes a special on focus on, what I would kindly call, the lies about cars. People lie to us because there is money in doing so. There is an amazing amount of PR fed bullshit to contend with in our business that is never called out as such, and even the most brilliant and gifted writers often find themselves with muck on their shoes and sweet talkers in their ears and email boxes. So, in light of that,  if you want to bring some unique facts and experiences to the table, please don’t shy about it. Feel free to contact us.

Oh, and share how much in taxes you paid for your rides during the course of this year. I’m willing to bet that unless you bought a new car, it was nowhere near one thousand, nine hundred and fifty-two dollars…. and zero sense.

 

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Canada To End Duties On Imported Vehicles From The EU, Will Recognize EU Standards http://www.thetruthaboutcars.com/2013/10/canada-to-end-duties-on-imported-vehicles-from-the-eu/ http://www.thetruthaboutcars.com/2013/10/canada-to-end-duties-on-imported-vehicles-from-the-eu/#comments Fri, 18 Oct 2013 14:02:06 +0000 http://www.thetruthaboutcars.com/?p=626881 bmw-3-series-wagon-450x275

As part of a new free trade agreement due to be signed with the European Union, Canada will remove its 6.1 percent tariff on imported vehicles from the European Union, while the EU will remove its 10 percent duties on autos and and its 4.5 percent duty on parts.

According to The Globe and Mail, Canada will have a quota of 100,000 vehicles that can be imported, provided they are made with 20 percent Canadian parts. Vehicle with 50 percent or higher Canadian parts content will be exempt from the quota and can enter duty free. Currently, Canada only exports 13,000 vehicles to the EU, with the Eurozone exporting substantially more to Canada. If anything, the deal will result in cheaper luxury cars for Canadians, rather than a sudden rise in vehicle exports from Canada to the EU.

EDIT: Mark Stevenson at Autos.ca is also reporting that, according to a European Commission statement

Canada will recognise a list of EU car standards and will examine the recognition of further standards. This will make it much easier to export cars to Canada.

I wouldn’t be holding my breath for all kinds of Euro hot hatches and diesel wagons just yet. BUT if someone like Volkswagen wanted to import the Polo (a car that would do very well in Canada, according to VW Canada sources who have done market studies), the once prohibitively high costs of homologating the car might be reduced, or even eliminated.

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High C02 Tax May Lead To Mass Scrappage In The UK http://www.thetruthaboutcars.com/2013/06/high-c02-tax-may-lead-to-mass-scrappage-in-the-uk/ http://www.thetruthaboutcars.com/2013/06/high-c02-tax-may-lead-to-mass-scrappage-in-the-uk/#comments Thu, 13 Jun 2013 14:31:02 +0000 http://www.thetruthaboutcars.com/?p=491989 Range_Rover_front_20080331

A scheme to tax cars based on their C02 output could have the unintended consequence of causing UK motorists to scrap tens of thousands of perfectly good cars in the UK, solely because their annual tax rates, based on C02 consumption, have become too expensive for many motorists.

The increase in tax rates would hit tax brackets L and M hardest – these are typically larger engine luxury, performance and off-road vehicles that emit 226 grams of C02 per 100 km or greater. For comparison, a Toyota Prius would qualify for the “A” band (under 100 grams) and is exempt from paying road tax. A Porsche 911 falls under the highest tariff “L” and “M” bands, depending on the model.

Owners of older vehicles that consume relatively more fuel and produce greater levels of C02 could be looking at annual tax rates that amount to as much as one third of their vehicle’s value. Motorists could be eager to dump these cars, further pushing down their residual values, leading to a situation where numerous vehicles in good working order are sent to the scrap heap for no other reason than high tax rates.

Just-Auto spoke to CAP, a vehicle valuation company, regarding the scenario

“We are now in the crazy situation where perfectly good cars have become uneconomical to own because the cost of taxing them could soon approach half their car’s value.

This means more and more cars will become unsalable and will have to be scrapped long before the end of their useful life. Scrapping serviceable cars for the sake of a tax disc makes a mockery of environmental taxes as owners already tend to limit their mileage because the cars are relatively uneconomical. 

Throw in the carbon footprint of building the cars that replace those that are scrapped and the environmental justification for taxing these cars off the road collapses. The government should now consider lowering VED [Vehicle Excise Duty] rates for cars that fall into the brackets L and M after a certain age. This would prevent this potential waste of vehicles that do relatively little harm to the environment but provide cheap and comfortable transport for thousands of hard-pressed motorists in austerity Britain.”

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The Mileage Tax Cometh: The State Giveth, The State Taketh Away http://www.thetruthaboutcars.com/2013/06/the-milaege-tax-cometh-the-state-giveth-the-state-taketh-away/ http://www.thetruthaboutcars.com/2013/06/the-milaege-tax-cometh-the-state-giveth-the-state-taketh-away/#comments Mon, 10 Jun 2013 12:50:57 +0000 http://www.thetruthaboutcars.com/?p=491477  

 

“Hybrid and electric cars are sparing the environment. Critics say they’re hurting the roads,” writes Bloomberg. “The popularity of these fuel-efficient vehicles is being blamed for a drop in gasoline taxes that pay for local highway and bridge maintenance, with three states enacting rules to make up the losses with added fees on the cars and at least five others weighing similar legislation.”

According to Arizona state Senator Steve Farley, a Democrat who wrote a bill to tax electric cars, “the intent is that people who use the roads pay for them. Just because we have somebody who is getting out of doing it because they have an alternative form of fuel, that doesn’t mean they shouldn’t pay for the roads.

State and local gas-tax revenue has declined every year since 2004, falling 7 percent to $37.9 billion in 2010, this according to inflation-adjusted data from the allegedly nonpartisan research group. Institute on Taxation and Economic Policy.

That, however, is not the fault of hybrids and EVs. The market share of hybrids is pretty much stuck at around 3 percent, Hybridcars says. The market share of electric vehicles, which generate no gas tax at all, is close to unobservable, pure EVs and plug-ins together hold half a percent of the American pie.

What is true is that sales-weighted MPG of all new automobiles bought and sold in the U.S. os steadily going up. In October 2007, the index stood at 24.7 MPG. In May, all cars sold had an average CAFE rating of 30 MPG.

This is declared national policy, and automakers are working hard to meet the policy. State tax revenue becomes collateral damage.

Farley’s proposed anti-EV tax is a mileage tax. His bill wants one cent per mile driven on Arizona highways by “a vehicle that is propelled by a motor that is powered by electrical energy from rechargeable batteries or another source on the vehicle or from an external source in, on or above the street and that is not capable of being powered by motor vehicle fuel or use fuel.”

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Of course, it is highly unfair to levy a mileage tax on a plug-in only. When the systems are in place to track the handful of plug-in in Arizona, and which most likely will cost more than the tax it generates, a mileage tax for all cars is sure to follow.

In New Jersey, Democratic State Senator Jim Whelan proposed a similar bill to tax cars by mile driven. The cars would be tracked by GPS. Facing criticism, he now proposes that “owners of alternative-fuel vehicles would be charged an annual fee – about $50 per year, though that is not final” as The Atlantic City Press says.

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We’re Not Getting The Holden Ute, But Not For Reasons You’d Expect http://www.thetruthaboutcars.com/2013/06/were-not-getting-the-holden-ute-but-not-for-reasons-youd-expect/ http://www.thetruthaboutcars.com/2013/06/were-not-getting-the-holden-ute-but-not-for-reasons-youd-expect/#comments Mon, 03 Jun 2013 15:59:37 +0000 http://www.thetruthaboutcars.com/?p=490631 ge5547549213459505029

Every so often, the same tired rumor will pop up again, like a particularly resilient pimple that habitually reappears in the same conspicuous spot. Thanks to the incessant hunger for clicks among auto websites, these rumors refuse to die, no matter how asinine they are. How many times have you seen a “BREAKING” or “EXCLUSIVE” story on the next Toyota Supra or some absurd BS fabrication regarding a diesel Mazda MX-5?

The latest round of bollocks concerns the Holden Ute, another car that tickles the fancy of enthusiasts on all sides of the globe, but would be a commercial nightmare if they ever tried to export it to America. One Australian publication is now claiming that a guerilla marketing campaign showing Mark Reuss lapping the Nurburgring in a brand new Ute is part of a ploy to export the Ute to America. Of course, other car blogs have been lathering themselves up into a frenzy over the prospect of a very expensive quasi-pickup that they will not purchase once it gets here.

Holden claims that there will be some kind of major announcement regarding the Ute next month. I’m going to be the first to say it will not be related to any Ute exports. There are two simple reasons here: the US-Australian dollar exchange rate is abominable as far as exports are concerned, and there is likely little to no demand for a very pricey product that is neither fish nor fowl. Who is going to pay $50k for Corvette powered pseudo-pickup wearing a Chevrolet badge. Did we discuss the UAW’s reaction to an Australian built pickup, or the whole “cannibalizing GM’s new ‘lifestyle pickup’ thing “either? Both of those matter, but would require their own articles to really get into.

One thing that is not a factor is the chicken tax. Not long ago, Holden used the chicken tax as an excuse for why it’s been unable to export Utes to America. TTAC commenters soon produced plenty of evidence showing that Australian cars and “light commercial vehicles” (i.e. pickups and Utes) can be brought to America duty free. So that excuse is out. I feel for Holden though. The Australian domestic car industry is going down the tubes, their signature product is about to become just another boring front-drive appliance and all they want to do is send some good product to world markets.

The problem is nobody wants it. No matter how loud the internet cries out for it.

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Tax Saabotage: Muller And Saab Board (=Muller) Target Of Swedish Government, Paper Says http://www.thetruthaboutcars.com/2013/05/tax-saabotage-muller-and-saab-board-muller-target-of-swedish-government-paper-says/ http://www.thetruthaboutcars.com/2013/05/tax-saabotage-muller-and-saab-board-muller-target-of-swedish-government-paper-says/#comments Thu, 30 May 2013 12:17:13 +0000 http://www.thetruthaboutcars.com/?p=490015 Victor Muller - Picture courtesy gp.se

Despite Victor Muller’s assurances that he is innocent, that he has not been accused of any crime, and that Sweden’s Economic Crime Authority most likely only wants to invite him for a friendly chat, Sweden’s  Göteborgs-Posten thinks it knows who is the target of the investigation:  Victor Muller, and Saab’s board. In the end, Victor Muller was alone on board.  Says the paper:

“From what Göteborgs-Posten learned, there is a clear link between the prosecutor’s recent suspicions about crimes by SAAB Automobiles former board and how Victor Muller was paid for his work from February 2010 to the bankruptcy in December 2012.”

“When Victor Muller, a major owner of Spyker Cars which bought SAAB Automobile in February 2010, joined SAAB’s leadership as chairman of the board, there was no written contract about how and for what he would get paid. Even so, invoices started to arrive from Muller’s companies in Latin America Tug Holding on the Dutch Antilles.”

An international tax consultant tells TTAC that disputes about consultancy agreements vs. salaries are common: “If there is a dispute, they ask first for a contract. If there is none,  bad news. If there is a contract, then they look for emails in which the contract was negotiated. If the contract just appeared out of thin air, bad news.  Then they look where the money went.”

According to Göteborgs-Posten, the money did not go to the Tug company, “but to Muller’s private bank account, as the investigations of the tax authorities show.” Apparently in a letter to Muller, those tax authorities worte:

“The evidence supports the conclusion that the purpose was that SAAB should give you compensation and that you would avoid paying taxes for this.”

Until SAAB’s bankruptcy in December 2011, about $1.2 million were paid in consulting fees to Victor Muller, the paper says.

“It was only in September 2011 that Victor Muller, when he was the only person in the leadership and the crisis in SAAB was escalating, that the consulting fees were regulated in a written agreement. The payments where thereby secured. 

The Tax Authorities sees this entire arrangement with consulting fees instead of salary for the job as chairman of the board as a ploy to make Victor Muller avoid paying taxes in Sweden for his work in SAAB Automobile. In September 2012 the Tax Authorities therefore decided to demand Victor Muller pay approx. 2 million SEK ($300,000) in tax.”

The paper concludes:

“The responsibility for errors in the conduct of SAABs accounting and reporting, and that SAAB paid a consulting fee instead of salary and that a substantial tax shortfall has happened, rests with the board of SAAB.“

In the end, Victor Muller sat alone on the board. On June 23, 2011, Saab’s General Counsel Kristina Gers stepped down from the board, a week after two union representatives defected.

In the meantime, Muller said through his favorite mouthpiece Saabsunited ,  that “the contract was approved by the National Debt Office  in 2010.” According to the information given to Göteborgs-Posten, no contract existed in 2010. The Debt Office told the paper that all it had to approve whether the “compensation was reasonable,” and that how taxes are paid would be up to Saab and Muller.

(Hat tip to a friend in  Sweden for a translation better than Google Translate.)
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Tax Saabotage: Swedish Economic Crime Authority To Question Muller http://www.thetruthaboutcars.com/2013/05/tax-saabotage-swedish-economic-crime-authority-to-question-muller/ http://www.thetruthaboutcars.com/2013/05/tax-saabotage-swedish-economic-crime-authority-to-question-muller/#comments Wed, 29 May 2013 13:29:39 +0000 http://www.thetruthaboutcars.com/?p=489944 Victor Muller - Picture courtesy coolbrandsstories.wordpress.com

Former Saab Chairman Victor Muller “will be called in to answer questions related to a Swedish inquiry into alleged tax offenses at the bankrupt carmaker,” Sweden’s  Economic Crime Authority told Reuters.

When news spread last week that Muller will be called on the carpet, Victor took to his favorite mouthpiece, Saabsunited, and said it is not true:

“Nobody from the Swedish Authorities has ever tried to get in touch with me and I am sure they have my number so if they had wanted to, they would have certainly been able to do so.”

Katinka Wall, a spokeswoman at the Swedish Economic Crime Authority, told Reuters that Muller would be summoned as part of the wider investigation and that he is not being served as a suspect.

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Tax Saabotage: Victor Muller Named As Suspect http://www.thetruthaboutcars.com/2013/05/tax-saabotage-victor-muller-named-as-suspect/ http://www.thetruthaboutcars.com/2013/05/tax-saabotage-victor-muller-named-as-suspect/#comments Thu, 23 May 2013 07:43:12 +0000 http://www.thetruthaboutcars.com/?p=489341

Muller and lawyer Geers in court – Both are suspects of tax evasion

As suspected, the Swedish Saab scandal  over avoided taxes grows wider.  Yesterday, it reached the failed takeover artist Victor Muller. “Muller prime suspect in Saab tangle,” headlines Swedens Svenska Dagbladet, The paper obtained court documents that say Muller is wanted for questioning.

“Victor Muller is going to be called into the Financial Crimes Unit,” Chief Prosecutor Olof Sahlgren told the paper.  Says Reuters:

“Prosecutors are looking into allegations that executives at Saab, which collapsed in 2011, obstructed proper tax checks over the years 2010 to 2011, a turbulent time for the company, when it was sold by General Motors to small Dutch sports car maker Spyker, and when problems which led to its collapse emerged.”

While Saab continued losing all the money given to Muller by shady Russian financiers  and the European Investment Bank, and while therefore no taxes on profits were due, the Swedish government wanted its rich share of payroll taxes and social contributions. As suspected by TTAC commenter Piffpaff, the Muller case appears to focus on consulting payments made to Victor Muller’s  Latin America Tug Holding NV (later renamed to LAT Management NV), based in the Netherlands Antilles, Svenska Dagbladet says.

According to the files and the Stockholm paper, some $540,000 were invoiced by Muller’s tugboat company in the tax haven. The prosecutor thinks Saab’s management should have paid taxes and social security contributions on Muller’s compensation. Invoices from entities in tax havens are a favorite tool for tax avoidance.

Prosecutor Sahlgren told the Dagbladet that Muller has not been formally charged with a crime. However, by law, Muller “is responsible for the company because he has been a director, president, and later CEO of Saab.”

The scandal could widen. According to the prosecutor, more people could come under suspicion. The matter also is likely to involve generous bonus payments made to Victor Muller when Saab was going down the drain. Unusually high payments to the boss, especially before a bankruptcy rarely fail to attract the attention of the prosecutor.

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Tax Saabotage: Three Former Saab Execs Arrested, Victor Muller’s Offices Searched http://www.thetruthaboutcars.com/2013/05/tax-saabotage-three-former-saab-execs-arrested-victor-mullers-offices-searched/ http://www.thetruthaboutcars.com/2013/05/tax-saabotage-three-former-saab-execs-arrested-victor-mullers-offices-searched/#comments Tue, 21 May 2013 15:15:27 +0000 http://www.thetruthaboutcars.com/?p=489134 Kristina Geers and Victor Muller Picture courtesy stureplan.se

During better times:Kristina Geers and Victor Muller

Key members of the board of bankrupt carmaker Saab were arrested yesterday on suspicions of tax evasion.  Former Saab General Counsel Kristina Geers, former CFO Karl-Gustav Lindstrom, and former CEO Jan Åke Jonsson spent the night in jail. After a serious grilling, the three were released today. At the same time, the offices of  Spyker in Zeewolde, Netherlands, were searched by police at the request of Swedish authorities, Z24.NL reports.

According to Saab fanzine Saabsunited,  the trio was booked on suspicions “of trying to seriously make accounting too complicated and difficult for the tax-authorities.” That alone does not justify an  arrest. Later, it was reported that the matter was about paying people as independent consultants instead as employees. This is a popular strategy to minimize tax and social security payments in many countries. It  usually starts a long discussion with the auditors, but no mass arrests, and no internationally coordinated raids. Someone seems to be fishing for more than confusing book entries.

Saab declared bankruptcy in late 2011. Their 2010 and 2011 books were audited, a normal procedure in most European countries after a company goes bust. During the bankruptcy, many suppliers were stiffed, however, the biggest loser was the Swedish government. It had guaranteed a $500 million loan by the European Investment Bank.

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Demise Of Kei Cars Predicted http://www.thetruthaboutcars.com/2012/11/demise-of-kei-cars-predicted/ http://www.thetruthaboutcars.com/2012/11/demise-of-kei-cars-predicted/#comments Mon, 12 Nov 2012 12:28:49 +0000 http://www.thetruthaboutcars.com/?p=466608

Japan’s minivehicles or “kei” cars could lose their (next to their cuteness) biggest attraction: The tax benefit. The Japanese government is thinking about charging the same tax for regular cars and mini vehicles alike, The Nikkei [sub] writes.

An end to the favorable kei car tax treatment could be the price to pay for a new car tax system demanded by the Japanese automaker association JAMA. Japanese pay a multitude of taxes on their cars, and with the consumption tax doubling to 10 percent in 2015, automakers complain about double taxation.

An end to the favorable tax treatment of keis would please the Japanese auto importer association JAIA and the American Automotive Policy Council (AAPC) which demanded an end to the preferred tax treatment of keis.  Japanese automakers already say that an end of the tax treatment also would mean an end of the keis.

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Ford Could Boost Displacement Of Ecoboost 3-Cylinder http://www.thetruthaboutcars.com/2012/11/ford-could-boost-displacement-of-ecoboost-3-cylinder/ http://www.thetruthaboutcars.com/2012/11/ford-could-boost-displacement-of-ecoboost-3-cylinder/#comments Thu, 01 Nov 2012 15:50:45 +0000 http://www.thetruthaboutcars.com/?p=465614

The 3-cylinder Ecoboost engine developed by Ford won’t necessarily stay at its current displacement of 1.0L. According to the Blue Oval, there’s a fair bit of power – and displacement – left on the table.

In world markets where vehicles are taxed on displacement, the 999cc engine is a boon to buyers who can buy something like a Mondeo-sized vehicle while avoiding the steep levies of a relatively larger powertrain. But Andrew Fraser, Ford’s head of gasoline engine development, told AutoExpress that as the regulations vary by country, so can the engine’s displacement.

“We have a maximum capacity per cylinder of 500cc, so a 1.5-litre engine is certainly possible. In growing markets there are incentives for certain sizes of engines, so in Brazil they want a 1.0-litre engine, in India it’s 1.2 and in China it’s 1.5 – the EcoBoost engine could be all of those.”

Fraser cited 200 horsepower as a possible figure for the larger displacement motors. The 1.0L engine in maximum tune can put out as much as 220 horsepower when pushed to its limits.

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San Francisco Begins Investigating Cost-Per-Mile Driving http://www.thetruthaboutcars.com/2012/07/san-francisco-begins-investigating-cost-per-mile-driving/ http://www.thetruthaboutcars.com/2012/07/san-francisco-begins-investigating-cost-per-mile-driving/#comments Tue, 24 Jul 2012 15:45:49 +0000 http://www.thetruthaboutcars.com/?p=453997

The San Francisco Bay area will investigate a proposal to implement cost-per-mile driving, as a way to raise money for public transit and road repair while reducing pollution and congestion.

MercuryNews.com reports that

“…drivers could be required to install GPS-like odometers or other devices in their vehicles and pay from less than a penny to as much as a dime for every mile driven. The idea could take a decade or more to be launched.”

The proposed mileage-based revenue collection would add an estimated $15 million per day to Bay Area coffers. Other proposals, like road tolls, HOV lanes and expanded public transit in suburban counties.

Before the Bay-Area stereotype diatribes begin, it’s worth noting that Atlanta has already investigated cost-per-mile driving…as well as locales in Oregon and Washington. Concerns about privacy and government monitoring were denied by one transit official, who was quoted by MercuryNews as stating “the last thing we’re interested in is where you go and what you do…”, but that’s unlikely to soothe any concerns about unnecessary surveillance.

As unpalatable as cost-per-mile driving is, this won’t be the last we hear of it, and it won’t be for the purposes of reducing greenhouse gas emissions - how do you think our roads will get repaired if people start using EVs or alternative fuel vehicles, and gas tax revenues plummet?

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Georgia Enacts Speeding Ticket Tax http://www.thetruthaboutcars.com/2010/01/georgia-enacts-speeding-ticket-tax/ http://www.thetruthaboutcars.com/2010/01/georgia-enacts-speeding-ticket-tax/#comments Wed, 06 Jan 2010 14:45:22 +0000 http://www.thetruthaboutcars.com/?p=340885 The fourth or fifth oldest profession (courtesy:rootsweb.ancestry.com)

Drivers in Georgia were hit for the first time last Friday with a new tax on speeding tickets designed to raise between $25 and $30 million in annual revenue for the general fund. The plan was modeled on the driver responsibility taxes in states like Michigan, New Jersey, New York and Texas. A similar plan in Virginia was so unpopular that legislators repealed the tax within six months and refunded all of the money that had been collected under the program.

Governor Sonny Perdue sold the plan as a tax that only hits “Super Speeders.” The levy first proposed by state officials, however, would have been imposed upon anyone who receives a citation that carries license points — no matter how minor — as is the practice in the states with so-called driver responsibility fees. For now, the legislature decided to limit the tax to those accused of driving over 85 MPH anywhere in Georgia or over 75 MPH on a two-lane road.

Those accused of such “super speeding” offenses will pay a hefty fine to the jurisdiction where the violation occurred. Within thirty days, the state’s motor vehicle department will mail a bill demanding a separate $200 payment. This secondary punishment must be paid within ninety days of conviction, as those who cannot afford the fee will have their license automatically suspended. Those who fail to receive the bill or suspension notice in the mail are out of luck because the new law does not require any effort on the part of the state to ensure the letter is actually received.

“No other notice shall be required to make the driver’s license suspension effective,” Georgia Code Section 40-6-189 states.

License suspension under the new law become even more lucrative by imposing a $100 “restoration fee” for license reinstatement. The bill also ups the reinstatement fee for other offenses to as much as $400. In Texas, for example, the speeding ticket tax generated over 1.5 million suspended licenses. Lawmakers in the Lone Star state were disappointed, however, by the amount of revenue this generated. It turns out that only about one-third of fee recipients were able to pay to regain their licenses. The remainder simply drove without a license or insurance.

View a copy of the law in a 75k PDF file at the source link below.

Source: PDF File House Bill 160 (Georgia House of Representatives, 5/5/2009)

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New Stimulus Package: Tax Deductions for Car Loans and Sales Tax http://www.thetruthaboutcars.com/2009/02/new-stimulus-package-tax-deductions-for-car-loans-and-sales-tax/ http://www.thetruthaboutcars.com/2009/02/new-stimulus-package-tax-deductions-for-car-loans-and-sales-tax/#comments Wed, 04 Feb 2009 00:52:00 +0000 http://www.thetruthaboutcars.com/?p=238322

The Detroit Free Press reports that Senator Barbara Mikulski (D-MD) has added some car dealer-friendly provisions to the proposed $43g (gazillion) economic stimulus package.

Mikulski’s proposal would grant a tax credit for vehicles bought between Nov. 12 of last year and Dec. 31 of this year. The tax break would only go to families making less than $250,000 a year, and would only apply to interest on loans up to $49,500.

“Everyone wants to save auto manufacturers, but no matter how much government aid we give to the Big Three auto makers, they can’t survive if consumers don’t start buying cars,” Mikulski said.

True dat. HOWEVER, this is like putting a band aid on an arterial wound. Until the U.S. housing market recovers, car sales will not come back. And maybe not even then, for a while anyway. How Congress/the feds do that remains to be seen. Later.

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