The Ichabods in Congress should pass bills to stimulate car purchases as follows. First, set aside sales tax on all the big-three new car sales for the next two years. This could be extended if necessary. Second, set license fees at $200 the first year, $400 the next, then $8, $16, and $32 for the first owner. When a car is resold, the fees would repeat, starting at $200. All car sales could go tax-free after two years if the program needs to be extended. Sales tax would be reimbursed to the state at the going rate plus 1 percent. Third, the big three must file for chapter 11 bankruptcy to get the stimulus.
This is only a rough draft but it’s better than what Congress is doing now.
This article appears in Mar 12-19, 2009.