Michael and Joan Thron sit in their 2009 Toyota Prius Hybrid outside their Green Bay home. They purchased the car in part because of tax incentives.
Joan and Michael Thron acknowledge they didn't need a new car, but they bought one anyway to show support for President Barack Obama's economic recovery plan.
The Throns, former University of Wisconsin-Green Bay professors, bought a Toyota Prius — a hybrid that gets 45 miles per gallon of fuel — in early March. They plan to take advantage of a tax deduction next year that is available through the stimulus plan.
"We didn't really need a new car," said Michael Thron, 72, who said the Prius they traded in was just two years old. "We felt this was a very good thing to do, to make a statement."
In a letter to their congressman, U.S. Rep. Steve Kagen, D-Appleton, the Throns pointed out that not only will they be able to claim the sales taxes when they file their returns next year, but they saved 5.5 percent off the purchase price by buying when they did.The Green Bay couple thanked Kagen for voting for the stimulus bill, which passed the House without a single Republican vote, and urged him to "find colleagues willing to lend a hand rather than show a fist, to quote our president."
In a telephone interview, Michael Thron said he and his wife voted for Obama in November and are loyal followers of the president's agenda.
"So far, we're pleased with the direction in which things are going," he said. On the stimulus package, he added, "We should go forward with it — with our fingers crossed."
Thron said that despite the crisis in the domestic auto industry, he felt no regrets about buying from Toyota, a Japanese-owned company, and that he and his wife were still contributing to the economic recovery.
"I feel a little guilty about that," he said, "but I recognize that the Prius is made in the U.S. and we're helping American workers."
Kagen said that while the Throns' show of support for the stimulus is admirable, a lot more needs to happen to turn around sagging car sales, particularly among American automakers.
Kagen said loan approvals that used to take just 15 minutes now take several hours, giving consumers time to have second thoughts.
"What they really need is a loosening of the credit in secondary markets," Kagen said.
That is the message that the National Automobile Dealers Association, representing 19,000 dealerships, conveyed in a March 2 letter to Obama. The group said access to retail credit and capital loans is paramount to the survival of the industry.
The struggles of the U.S. auto industry surfaced anew March 30 with Obama's announcement of a plan to further stimulate domestic auto sales by guaranteeing new-car warranties, and the resignation of the General Motors Co. chief executive officer, Rick Wagoner.
But some analysts doubt the tax incentives will have much impact.
Jessica Caldwell, an industry analyst at Edmunds.com, an online automotive research site, said that while consumers should appreciate any help under the current economic climate, they're unlikely to rush to take advantage of a tax incentive that doesn't kick in until next year.
"For most people, the relief is needed now, and having to wait a year is tough," she said.
The tax incentives are the work of Sen. Barbara Mikulski, D-Md. She added an amendment to the stimulus package to allow couples with adjusted gross incomes of up to $250,000 to deduct the state and local sales taxes on new car purchases. It also allows taxpayers to claim a $2,500 tax credit for the purchase of a plug-in hybrid vehicle.
Mikulski said her measure was aimed at helping both the auto industry and consumers.
"If you buy a car, someone's got to make them, someone's got to sell them and someone's got to service them," Mikulski said. "Those are jobs you are either creating or saving up and down the supply chain. So my amendment is good for the manufacturers, the dealers, the suppliers and the hard-working American families who need a car, but also need a helping hand during these tough economic times."
+ Feb.2009 Incentives: Chrysler Spents $5566 Per Vehicle
+ Feb.2009 Incentives: GM Considers New U.S. Incentive Program
+ New Toyota Incentives on Tundra Pickup Trucks
+ Honda,Toyota Bumped Up Their June Incentives
