Oprah's cars: Surprise!

[Dorian Gray]

Oprah gave a bunch of people some cars in one of her shows. First of all, she didn't pay a single cent for them. But second of all, Pontiac/GM, who gave the cars out, is paying for titles and title taxes and registrations - but isn't paying for the income tax on the cars. Remember, the cars were supposedly given out to poor people.

So basically, Oprah and Pontiac hasn't given just cars, they have given massive increases in the taxes for these people. Pontiac has literally said that if they can't afford the taxes, they should give back the cars.

This was all about Oprah's ego. What a fat piece of crap she is.

(What, did I just ruin it with the emotional appeal?)

[clk]

Originally posted by Dorian Gray
Oprah gave a bunch of people some cars in one of her shows. First of all, she didn't pay a single cent for them. But second of all, Pontiac/GM, who gave the cars out, is paying for titles and title taxes and registrations - but isn't paying for the income tax on the cars. Remember, the cars were supposedly given out to poor people.

So basically, Oprah and Pontiac hasn't given just cars, they have given massive increases in the taxes for these people. Pontiac has literally said that if they can't afford the taxes, they should give back the cars.

This was all about Oprah's ego. What a fat piece of crap she is.

(What, did I just ruin it with the emotional appeal?)

Well, nobody is forcing those people to accept the cars. They can either accept them or not. In the worst case scenario, they will leave the show just as they had come in, they won't be worse off. If GM is paying for the tax, title and license, AND they are giving these people a brand new car for no cost, what's wrong with that? I don't see how you can find fault in this.

[Cecil]

Why not sell the car and use some of the money to pay the taxes? You'll still end up tens of thousands in the black.

Or am I missing some noose in the American tax code?

[Regnad Kcin]

Originally posted by Dorian Gray
...Remember, the cars were supposedly given out to poor people."Poor people?" I was under the impression the recipients were members of her regular studio audience. Could be wrong.

As for paying taxes on the cars, seems as if this situation is no different from what would happen if you won a prize on a game show. Besides, sales tax on a $20k item would be in the neighborhood of $1,500. I'd "buy" a new car for that.

[epepke]

Originally posted by Regnad Kcin
As for paying taxes on the cars, seems as if this situation is no different from what would happen if you won a prize on a game show. Besides, sales tax on a $20k item would be in the neighborhood of $1,500. I'd "buy" a new car for that.

Sales tax is not so bad, but these weren't sales. Gift tax is higher. When I lived in New York, which I admit was 30 years ago, it was around 30%. It's probably at least as high in California. Plus, you have to pay Federal and State income tax on the original price of the car.

It's not such a big deal if you can afford to pay the taxes; it's less than the price of the car. But if you can't, you have to sell the car. Now, when you buy something and resell it like this, a good rule of thumb is that you're only going to get 60% of the original value, although you have to pay the taxes based on the new sale price of the car. So, out of the original price of the car, with your 60% return, you have to pay 30% for gift tax, or 50% of what you get for resale, so you're left with 30%. Then out of that 30%, you have to pay Federal income tax on it, which is at best about 10% of the original, so you're left with 20%. Out of that, you have to pay state income tax, which unless you live in a state without sales tax, is probably about 5% if you're poor. So, now, you have 15% left. Which at least is something, I guess.

[Regnad Kcin]

Originally posted by epepke
Sales tax is not so bad, but these weren't sales. Gift tax is higher. When I lived in New York, which I admit was 30 years ago, it was around 30%. It's probably at least as high in California. Plus, you have to pay Federal and State income tax on the original price of the car.Thanks. I wasn't aware of that, not ever having won anything of significant monetary value. (Grr.) (Or maybe not Grr, come to think of it!)

[epepke]

Originally posted by Regnad Kcin
Thanks. I wasn't aware of that, not ever having won anything of significant monetary value. (Grr.) (Or maybe not Grr, come to think of it!)

I had some friends who went on the TV show Concentration. New York show, though nationally syndicated. Maybe before your time. It involved matching tiles from a grid that were revealed two at a time. This is a common video game even now. However, the matched tiles revealed a rebus, which you would then have to guess.

They won. They wound up having to sell every blessed thing they won in order just to pay the damn taxes. These were not poor people, either--they had a weekend place in Connecticut.

[Charlie Monoxide]

Oprah? Isn't she a TV personality?

I've never seen her show, but I gather it's popular.

Like 99% of TV shows (except PBS and other non-profits), the networks are just filling in space between commercials. The other 1% of shows are those infomercials.

Charlie (turn off the TV and read a book) Monoxide

[aerocontrols]

Originally posted by Regnad Kcin
"Poor people?" I was under the impression the recipients were members of her regular studio audience. Could be wrong.

The show made an effort to seek out people who claimed to have junky cars to be the audience for that show. One presumes, then, that they were at least poorer than the average Oprah audience.


Still, it seems to me that no matter how bad the taxes are, the audience members all came out ahead.

[HarryKeogh]

this was already covered in another thread but here are the facts:

taxes are going to be around 7K

guests on stage were people in desperate need of a car

audience members in the seats were just "regular" people

oprah didnt pay anything for the car.

Oprah's followers believe her sweat, when distilled, will cure cancer.

Her viewers patiently await further instructions on what book to read next.

[Mycroft]

Originally posted by Dorian Gray
Oprah gave a bunch of people some cars in one of her shows. First of all, she didn't pay a single cent for them...

Oprah and Pontiac get together to do a good deed for people in need, and you complain it wasn't good enough.

No class.

[Regnad Kcin]

Originally posted by aerocontrols
The show made an effort to seek out people who claimed to have junky cars to be the audience for that show. One presumes, then, that they were at least poorer than the average Oprah audience.Appreciate the info.Originally posted by HarryKeogh
...guests on stage were people in desperate need of a car...Again.

Though one wonders how audience members were screened for such personal and potentially embarassing bits.

[roger]

You know, I *was* planning on giving my car to that poster Dorian Gray, because s/he seems like such a nice poster, but come then I read this thread and learned what a horrible person I would be if I did it. So, no car for you.

[Tony]

Oprah and GM did nothing wrong. The real criminal here is the government by trying to extort free citizens. If anyone else did this, they would be in jail.

[Dorian Gray]

You know, I *was* planning on giving my car to that poster Dorian Gray, because s/he seems like such a nice poster, but come then I read this thread and learned what a horrible person I would be if I did it. So, no car for you. Oprah didn't give "her" car to anyone.

It was, at best, a tainted benefit to the people in the audience. Some of them might have to sell the cars to pay the $7500 in taxes, and just like in real life, the cars depreciated in value the instant they were driven home. How much, I don't know, but there you go.

If they decide to keep the car, they have to pay the gift tax out of their own pockets. I feel that if they had $7500 laying around to pay taxes with, they would have gotten relatively decent used cars, wouldn't they?

Then, there's the fact that the whole thing was a huge and cheap infomercial for Pontiac. I imagine that Oprah, the number one show of its kind and at least one of the top ten syndicated shows in the country, commands a large sum of money for advertising time. Let's say it's $250,000 per 30-second slot. This entire show was 44 minutes long - subtract the suspense building, and it was probably about 40 minutes. Keep in mind that this is DURING the show, and doesn't include regular commercials.

Well, 80 times $250000 is $20 million, and remember, this is a conservative estimate. Pontiac spent $7 million. They saved $13 million dollars. Plus, I believe Pontiac gets to write this off since it's a "gift" or "donation". So it may not have cost them anything. In fact, if they saved taxes, that means that basically YOU AND I paid for the cars, if you think about it. But I don't remember getting any credit. You?

Also, there's the fact that there are tons of people who don't have food, or clothes, or houses, or have other situations much worse than not having a car. Plus, there are hundreds of thousands, if not millions, of poverty-level people.

I can just think of better uses for the money, and better uses for the publicity. I guess I like my philanthropists to be silent. Bill and Melinda Gates give out all kinds of money - but you never really hear about it. Each time Oprah, or anyone, gives out a free gift to all the people in the audience - other than a book - it's just a huge advertisement.

[Ladewig]

Originally posted by epepke
Sales tax is not so bad, but these weren't sales. Gift tax is higher. When I lived in New York, which I admit was 30 years ago, it was around 30%. It's probably at least as high in California. Plus, you have to pay Federal and State income tax on the original price of the car.

It's not such a big deal if you can afford to pay the taxes; it's less than the price of the car. But if you can't, you have to sell the car. Now, when you buy something and resell it like this, a good rule of thumb is that you're only going to get 60% of the original value, although you have to pay the taxes based on the new sale price of the car. So, out of the original price of the car, with your 60% return, you have to pay 30% for gift tax, or 50% of what you get for resale, so you're left with 30%. Then out of that 30%, you have to pay Federal income tax on it, which is at best about 10% of the original, so you're left with 20%. Out of that, you have to pay state income tax, which unless you live in a state without sales tax, is probably about 5% if you're poor. So, now, you have 15% left. Which at least is something, I guess.


Isn't there an $11,000 exclusion for gift taxes? Wouldn't the taxes be calculated on the difference between the retail value of the car and the $11,000?

[Mycroft]

Originally posted by Dorian Gray
It was, at best, a tainted benefit to the people in the audience. Some of them might have to sell the cars to pay the $7500 in taxes, and just like in real life, the cars depreciated in value the instant they were driven home. How much, I don't know, but there you go.


Hey, you forgot that these victims also have to buy insurance for these cars. Gasoline and maintenance will add up too. :rolleyes:

[clk]

Originally posted by Dorian Gray
Oprah didn't give "her" car to anyone.

It was, at best, a tainted benefit to the people in the audience. Some of them might have to sell the cars to pay the $7500 in taxes, and just like in real life, the cars depreciated in value the instant they were driven home. How much, I don't know, but there you go.

If they decide to keep the car, they have to pay the gift tax out of their own pockets. I feel that if they had $7500 laying around to pay taxes with, they would have gotten relatively decent used cars, wouldn't they?

Then, there's the fact that the whole thing was a huge and cheap infomercial for Pontiac. I imagine that Oprah, the number one show of its kind and at least one of the top ten syndicated shows in the country, commands a large sum of money for advertising time. Let's say it's $250,000 per 30-second slot. This entire show was 44 minutes long - subtract the suspense building, and it was probably about 40 minutes. Keep in mind that this is DURING the show, and doesn't include regular commercials.

Well, 80 times $250000 is $20 million, and remember, this is a conservative estimate. Pontiac spent $7 million. They saved $13 million dollars. Plus, I believe Pontiac gets to write this off since it's a "gift" or "donation". So it may not have cost them anything. In fact, if they saved taxes, that means that basically YOU AND I paid for the cars, if you think about it. But I don't remember getting any credit. You?

Also, there's the fact that there are tons of people who don't have food, or clothes, or houses, or have other situations much worse than not having a car. Plus, there are hundreds of thousands, if not millions, of poverty-level people.

I can just think of better uses for the money, and better uses for the publicity. I guess I like my philanthropists to be silent. Bill and Melinda Gates give out all kinds of money - but you never really hear about it. Each time Oprah, or anyone, gives out a free gift to all the people in the audience - other than a book - it's just a huge advertisement.

I just don't understand how you can criticize an act of charity in the way you have. Alot of people have performed charitable deeds for selfish reasons, but I don't think it's too classy to criticize them, because nothing bad is coming out of their charity. Bill Gates recently donated alot of money to India to combat AIDS, and some people say he did this because he will need the Indian government's help in the future since many of Microsoft's jobs will be outsourced to India. Even if this is true, I don't think it's fair to criticize Gates, because he is still performing an act that benefits other people.

In this case, the audience members can sell their cars if they can't afford the tax, and they will still get a few thousand dollars out of it. What's wrong with Oprah giving away a few thousand dollars to her audience members?

[The Fool]

Originally posted by Mycroft
Hey, you forgot that these victims also have to buy insurance for these cars. Gasoline and maintenance will add up too. :rolleyes:
What???? She's not giving them free Gas for life? Cheap Bitch......

[a_unique_person]

Originally posted by Mycroft
Oprah and Pontiac get together to do a good deed for people in need, and you complain it wasn't good enough.

No class.

I saw some of that show, the word 'class' has nothing to do with it.

[HarryKeogh]

Originally posted by Dorian Gray
Also, there's the fact that there are tons of people who don't have food, or clothes, or houses, or have other situations much worse than not having a car. Plus, there are hundreds of thousands, if not millions, of poverty-level people.

I can just think of better uses for the money, and better uses for the publicity. I guess I like my philanthropists to be silent. Bill and Melinda Gates give out all kinds of money - but you never really hear about it. Each time Oprah, or anyone, gives out a free gift to all the people in the audience - other than a book - it's just a huge advertisement.

I'm not a fan of Oprah. She basically kisses a lot of celebrity ass and puts out some crappy information now and then (pop psychology, the occassional supernatural stuff etc.)

Was it more advertising/public relations than charity? I think so. But to knock her for not giving the money to the hungry or the poor is wrong. This lady gives a ton of money to charity. All the profit from the sales of her stupid Oprah merchandise on her website go to charity. She is in a position of power and has used this to help some good causes.

I'm not going to deify her for giving away cars she didn't pay for but she still does some very good things for people who need it.

Egomaniac yes (when you launch a magazine called Oprah and have yourself on the cover of every damn issue) but there are plenty of egomaniacs (wth money) who don't do crap for anyone.

[roger]

So Dorian, imagine for a second you are famous. Now, you can use your fame to get somebody to donate a bunch of stuff, so long as you provide them free advertising via your fame. You wouldn't do it?

I can imagine you saying no, I don't consider the above unassailable, but hey, a lot of people would answer yes to the above, myself included. Car companies advertise every day, and so does Oprah. She just leveraged that fact into getting some free stuff to people who needed it. Kudos to her. It's a better way to spend that advertising dollar than some mindless 30 second commercial of a guy driving a car and picking up a babe at the side of the road, yes?

[epepke]

Originally posted by Ladewig
Isn't there an $11,000 exclusion for gift taxes? Wouldn't the taxes be calculated on the difference between the retail value of the car and the $11,000?

It depends on the state. In the anecdote I gave about the person who went on Concentration, the exclusion was $50.

[crimresearch]

Originally posted by Dorian Gray
<SNIP>
...Well, 80 times $250000 is $20 million, and remember, this is a conservative estimate. Pontiac spent $7 million. They saved $13 million dollars...

The only way Pontiac could have spent 7 million, would be if they went out and paid list price for each car...as the manufacturer, it is likely that it cost them more like 5K per car, and even if you double that to get a replacement to sell, their outlay on paper with creative accounting was more like 3 to 4 million max...and then the tax breaks you mentioned come into play...win-win for Pontiac, Oprah edges another notch closer to beatification while still living, and the audience members find out what most of us learned with our first cars....it costs more money than just the purchase price to have one.

[shanek]

Understand one thing, people: it isn't just the tax on the cars. The car's sale price is considered income, as some here have pointed out. But it's also true that a $20,000 car almost certainly would have pushed them into a higher tax bracket, which means they also have to pay additional taxes on the rest of their income for that year!

But, I guess it's okay, because now we know all about the sex life of armadillos and all new toilets only use 1.6gpf.

Oprah isn't the bad guy here, people. It's government. Oprah didn't tax anyone a cent.

[TragicMonkey]

I'm just waiting for someone to get into a wreck in their new Oprah car, and sue her for giving it to them.

[BPSCG]

Could somebody please get me the names and addresses of all these unfortunate people being burdened with these new cars? 'Cuz I could go and steal them for them and they could claim a casualty/theft loss on their taxes to offset the income...

I'd perform this service free of charge for them, as long as they agree not to press charges. 'Cuz if they did, I'd feel honor-bound to return the cars to them and they'd be stuck paying all them dreadful taxes all over again.

BTW, I think Oprah is pure evil. Who does she think she is, giving all these poor people cars they didn't want? Some nerve.

GM, too.

[epepke]

Originally posted by shanek
Understand one thing, people: it isn't just the tax on the cars. The car's sale price is considered income, as some here have pointed out. But it's also true that a $20,000 car almost certainly would have pushed them into a higher tax bracket, which means they also have to pay additional taxes on the rest of their income for that year!

Yup. You've got that right.

[Number Six]

When you add up all the plusses and minuses the people do get a net benefit, so Oprah did facilitate Pontiac giving to the audience. (Oprah herself didn't give anything...she let her show be used, but that simply results in good PR and higher ratings, which is the purpose of her show, so in that sense, Pontiac and the audience gave something to Oprah).

But the problem is that the whole thing was deceptive because they gave the audience members and the TV audience the impression they were giving X when in fact they were giving Y. Instead of telling the audience they were getting free new cars it would have been more accurate to say something like, the audience members were given a choice between buying a new car at a discount or else taking some cash (the amount of which was considerably less than the cost of a new car).

Sure, the audience should have known better and when they heard "free car" they should've thought "there must be some taxes involved...will Oprah/Pontianc pay them too?" But in that setting people don't think like that. The video of the ecstaticly happy audience played on news clips across the country but those people wouldn't have been as ecstatically happy if they knew what the end result would be.

[Tmy]

So they get a new car worth $30k and boo hoo they have to shell out about $7k to the state. I'd gladly take that deal.

[Regnad Kcin]

Originally posted by Tmy
So they get a new car worth $30k...The new G6 by Pontiac is the replacement for the Grand Am and being positioned as a competitor of the Honda Accord and Toyota Camry. It's likely a 22-24k car.

[Tmy]

They were fully loaded. And with the title and tax fees that ARE being picked up by Oprah and comany that would drive you up to $30K.


Is that $7k number even accurate? Wouldnt it depend on their income bracket and whatever deductions are available?

[Number Six]

I think they'd have been doing these people more of a favor if they had gotten a cheaper car but paid all of it. If I were poor I'd rather have a 20 K new car for nothing than a 30 K new car for 10 K. For that matter, I'd rather have a 10 K used car for nothing and 10 K in cash than a 20 K new car for nothing.

[Ladewig]

Originally posted by epepke
It depends on the state. In the anecdote I gave about the person who went on Concentration, the exclusion was $50.

The $11,000 exclusion refers to federal taxes. I think the information you are referring to is very much out-of-date.

[Mycroft]

Originally posted by Number Six
I think they'd have been doing these people more of a favor if...

No matter what the deed, there will always be a way to make it "more of a favor" by essentially giving away more. In the end, any action that benefits others is worth doing, and criticizing it is pointless.

[Number Six]

Originally posted by Mycroft
No matter what the deed, there will always be a way to make it "more of a favor" by essentially giving away more. In the end, any action that benefits others is worth doing, and criticizing it is pointless.

I didn't suggest they give away more. I suggested they give away the same amount in a more helpful way.

And I'm not ciriticizing them giving something away. I'm criticizing them mannipulating data and people for their own ends.

And they aren't really "giving" anything away unless they got nothing in return. In fact, both Oprah and Pontiac got lots in return.

[epepke]

Originally posted by Ladewig
The $11,000 exclusion refers to federal taxes. I think the information you are referring to is very much out-of-date.

It could be. After all, I did describe this as having to do with the Concentration television show which hasn't been on for decades. And I said that it was in New York City.

I always wonder why I continue to do this, however.

So what is the in-date information for state gift taxes, then? What's your estimate for the amount of taxes that they would have to pay total on a gift car in Nu-Perfect America?

[Chanileslie]

Originally posted by HarryKeogh
this was already covered in another thread but here are the facts:

taxes are going to be around 7K

Actually, I believe the 7K quote was the absolute highest that anyone would be hit on the taxes, the rest depends on the person's income level and other factors.

gOriginally posted by HarryKeogh
uests on stage were people in desperate need of a car

audience members in the seats were just "regular" people

oprah didnt pay anything for the car.

Oprah's followers believe her sweat, when distilled, will cure cancer.

Her viewers patiently await further instructions on what book to read next.

Does it matter that Oprah didn't pay for the cars? She helped facilitate the people, some of which desperately needed a decent car, to obtain a car for a minimal price. Heck, even if everone of these people had to pay $7,000, they couldn't have bought a decent used car for such a good rate.

Also, many of the Oprah Book Club picks are pretty good, and when I am at a loss for something decent to read and have already broused the book store and haven't found something to read, I will often fall back on OBC pick.

And as if you need Oprah's sweat to cure cancer! Heck, everyone knows you just need Oprah to give you the 'look' to cure cancer.

[TragicMonkey]

Originally posted by Chanileslie
Also, many of the Oprah Book Club picks are pretty good, and when I am at a loss for something decent to read and have already broused the book store and haven't found something to read, I will often fall back on OBC pick.

I wonder if Oprah gets a kickback from the publishers and authors when she recommends a book? It would be a fantastic way to guarantee sales, and if I were the publisher or author I'd be willing to cut her in on it.

[Ladewig]

Originally posted by epepke
So what is the in-date information for state gift taxes, then? What's your estimate for the amount of taxes that they would have to pay total on a gift car in Nu-Perfect America?

I may be terribly worng, but I think that Illinois no longer has a state gift tax. Gifts beyond the $11,000 deduction (Illinois copies the federal level) are eligible for state income tax (3% for Illinois). So receiving a $28,500 (stiker price for the version given away) car would mean $28,500 minus $11,000 times .03 or a total of $525 in state taxes. Federal taxes would be $28,500 minus $11,000 times that person's tax rate (which may be part of a higher bracket).

==========================


As for criticizing Oprah, if you can't find 200 things in this world to more upset about than how Oprah gives away cars, then you are just not paying attention.

[HarryKeogh]

Originally posted by TragicMonkey
I wonder if Oprah gets a kickback from the publishers and authors when she recommends a book? It would be a fantastic way to guarantee sales, and if I were the publisher or author I'd be willing to cut her in on it.

this author hated the idea...

http://www.complete-review.com/quarterly/vol3/issue1/oprah.htm

A book was selected for Oprah's Book Club -- The Corrections. This book is what should be the center of attention. Instead, attention is focussed on two personalities and on what they say and what they represent. There are accusations and labels: elitism, snobbery, the "high art literary tradition", populism, implied (and actual) endorsements, and much more.
The books benefits: people hear about it, people buy it (though some react by also making a point of not buying it). Maybe people actually read it. But the argument -- the many confused arguments -- swirl elsewhere.

Jonathan Franzen walks around with his foot apparently firmly lodged in his mouth. Oprah Winfrey doesn't deign to comment.
The book continues to sell; perhaps that is all that matters. It seems there really is no such thing as bad publicity. Intentionally or not, Franzen hit the mother lode.
But there are costs and consequences. Not for Franzen: despite the stink around him he can laugh all the way to the bank. He never has to write a word again, never has to worry about money. And if he does want to write another novel, every major publisher would want a chance to publish it. Unassailable Oprah, too, isn't much affected by these events; indeed, there has hardly even been a word of criticism regarding her actions.

[TragicMonkey]

Originally posted by HarryKeogh
this author hated the idea...

Good heavens. He seems very full of himself.