As far as I am concerned, any tax break is a good tax break.  The German’s must share my views since their recent stimulus plan includes tax breaks on cars.  The New York Times is reporting that:

The package, which amounts to about 2 percent of Germany’s gross domestic product, includes tax breaks on purchases of cars, loans to small and medium-size businesses and money for roads.

Some are saying that the German plan is not aggressive enough to affect the economy but I tend to disagree.  Germany has taken the very wise step of reducing taxes to fuel economic growth instead of simply throwing money at the problem.  You only need to look at the American school system to realize that throwing money at problems does nothing to solve those issues.

Tax breaks should encourage people to buy new cars, just as the GM employee discount fueled some new buying in America.  Lower the price and sales will go up, it is simple economics.  That said I hope that America will look at what Germany is doing and follow suit.  I think in these hard times, no one wants to see their taxes increased, and hopefully no one wants to see anyone else’s taxes increased.  We will have to wait and see the numbers over the next quarter as to the impact of the tax breaks…stay tuned.

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