I was wondering about this when I heard about Oprah’s car giveaway show. The story goes that she prescreened an audience to get only people that desperately needed a new car. She then proceeded to give away a new car to each and every member of that audience. The only problem is that the cars, like any other prize, need to be declared as income. The $28500 cars could carry a tax bill as high as $7000 (though I suspect most of these people are in lower tax brackets). I also suspect, though, that most of these people can’t afford a $7000 tax bill… why else would they not be able to afford a new car on their own?

The good news is that if they sell the car, they can pay the bill on the income and buy a new car that’s at least as expensive as my Matrix. I think they won’t be able to keep their Oprah car, but will get a new car anyway.