Consumer Preferences vs. Tax Breaks

Joe Raedle/Getty Images Ford F-150 pickups on a sales lot in Florida.

In a recent column, George F. Will suggests that consumer preferences are always going to win out over big government’s finger-wagging and incentives to do whatever it is liberals claim is the right thing. Prognosticating about the future of the Affordable Care Act, universal preschool and a possible minimum wage hike, he extrapolates from the auto market:

Have consumers thanked [Barack Obama] for trying to wean them from their desire to drive large, useful, comfortable, safe vehicles that he thinks threaten their habitat, Earth? The 2013 numbers tell the tale of their ingratitude. In 2013, for the 32nd consecutive year, the best-selling vehicle was Ford’s F-Series pickups. This supremacy began, fittingly, in the first year of Ronald Reagan’s deregulatory presidency.

Today’s consumers, who cannot get it through their thick heads that they are supposed to want wee vehicles such as Chevrolet’s Volt, bought 763,402 F-Series trucks. That is 740,308 more than the number of Volts General Motors sold.

He adds that the government’s “incentive for Volt buyers is a tax credit up to $7,500,” but it is no match for the public’s preferences for big, all-American trucks.

There’s just one problem with this argument: The government also offers a major tax incentive to buy trucks.

Taxpayers often buy vehicles and claim them as business expenses so they can deduct the cost of the purchase. There are limits to how quickly the value of the vehicle depreciates for tax purposes. But trucks and heavy S.U.V.’s get preferential treatment â€" meaning that you can take a larger deduction for big, gas-guzzling vehicles â€" which is why your accountant might suggest that your next business-related vehicle purchase be a Ford F-Series.