Three Unintended Consequences

So I'm driving home this evening and ended up behind this beautiful new, full-sized SUV.

Let's get a little closer -- look, it's a 2010 Honda Pilot!

How much do you want to bet that a cash-for-clunkers deal was used to purchase this bad boy?

Karl Denninger has more hilarity:

...many of those cashing in on the clunkers program are surprised when they get to the treasurer's office windows. That's because the government's rebate of up to $4500 dollars for every clunker is taxable.

"They didn't realize that would be taxable. A lot of people don't realize that. So they're not happy and kind of surprised when they find that out," Nelson said.

The amusement here is how most (if not all) states compute sales tax (charged when you register the vehicle.)

When you buy a new car you pay tax on the difference between the new car's purchase price and the trade-in you present to the dealer. This is an intentional distortion in the law that is intended to favor dealers over private-party used car sales; if you sell your used car privately the new buyer pays sales tax but you do not get the offset on the purchase of your replacement vehicle - the only way to get that is to trade the car.

Dealers use this, of course, in negotiations, effectively pocketing the sales tax - and why not? It's a real difference to you!

But the "cash for clunkers" is not a trade-in... [it's] a $4,500 check from the government...

So you get nailed at least once and possibly twice. Specifically, you pay sales tax on the full vehicle price (effectively paying sales tax on the $4,500!) and what's worse [is that] those states that tax income... might wind up counting this as income for state income tax purposes too, effectively taxing you twice... and I bet the car dealers, incredibly ethical people that they are, were fully informing their suckers, er, clients of this little "feature" of that government handout too.

Let's count the unintended consequences of the National Socialist Democrats' idiotic clunkers program:

• So many SUVs were purchased by consumers that even the mainstream media was forced to report that the Obama administration fudged the sales data
• Speaking of which, the program drove huge increases in sales of Japanese-made vehicles
• Best of all, consumers who used the program are going to get slammed with taxes they never anticipated!

Isn't a faceless, unaccountable, centralized government grand?