The House has passed a bill (HR 2751) that would provide a cash voucher of up to $4,500 for anyone who trades in older gas-hogging vehicles for new, more fuel-efficient ones.

I take a really old car that’s barely running and trade it in for a hybrid that’s on sale for about $14,500. If I get the full $4,500 (there are conditions of course), and if I use this new car exclusively for business, I’ll be able to write off the other $10,000 in a few years [for depreciation]. The deduction is going to reduce my taxes by about $5,000 and so the government is paying $9,500 for my car while I’m only paying $5,500 out of pocket – after taxes.

Seems like a sweet deal to me, but where is the government getting the money?

They might get some of the money from folks who don’t use the car for business, but that’s hardly enough. I doubt if they will get much from folks who make over $250,000 a year because in a short time we won’t have nearly as many people above that income bracket. More fuel-efficient cars will result in less federal gas taxes, so that’s not a source of new money.

What else is there? Oh, Yes. I forgot. They’re going to get that money from all the folks who have huge amounts of unreported income hidden in secret foreign bank accounts.