N A PROGRAM, OPRAH 'GIFTED' 276 CARS TO THE AUDIT, BUT EACH ONE OF THEM COSTED $ 6,000 IN TAXES

NEW YORK - Sept-14-2019 | = It's the 15th anniversary of one of the best advertising stunts on all television: the day Oprah Winfrey people giving away cars surprised an audience of hundreds of people who needed reliable transportation with the new Pontiac sedans G6, but then left them targeted by thousands in taxes that came with them.

Seven cars that killed Pontiac

The episode began with Oprah pulling out 11 seemingly random people from the audience and announcing what they all had in common: everyone needed a new car, so Oprah gave each one one. The public, suffice it to say, began to go crazy.

Then a small box was delivered to each member of the audience, and Oprah informed them that the key to a new Pontiac G6 was inside one of the boxes. One more person in the audience would join the other 11 in Oprah's big draw. It was designed by experts to mislead everyone.

When Oprah finally let everyone open their boxes, everyone found a key and everyone went crazy. It was an amazing television.

In general, the trick did not cost Oprah, or the television network, indeed anything. As has been told many times, the whole trick was part of a Pontiac marketing strategy for the Oprah faithful of America to go out and buy the new G6. Due to this, the price of the label of each car delivered by television was paid by Pontiac himself.

However, the problem for all those who obtained a car was that neither Oprah, the television network nor Pontiac represented all the taxes that the owners of new vehicles would have to pay the government, a tax on $ 28,500 (in 2004 dollars) car price

General Motors, the parent company behind the now-disappeared Pontiac, covered the state sales tax of $ 1,800 as part of the promotion, but given that the vehicles were not considered as gifts for audience members by the government, but promotional awards (How to win In the lottery, winning a car is calculated as part of a person's gross income, so it is taxed as income), the new owners of the G6 were hooked for an estimated $ 6,000 to $ 7,000 in state and federal taxes.

While it is not necessarily a bad shake to get a new car of $ 28,500 for only $ 6,000, or about a fifth of the price of the tag, Oprah's team would have specifically stacked the audience with people "in need of a car," Forbes says. . That would mean that some of these people are probably not the type of people who only have thousands of dollars out there to pay the sudden tax increase. For others, who sold the cars, it helped them with things like financing a new business.

But this was an unknown territory for a television promotion, and it was probably done completely in good faith despite being rooted in the General Motors marketing department. Still, car winners had to take the car and pay the tax, sell the car and still cover the taxes, or reject it completely.

In later promotions, Forbes notes, Oprah's team had learned their lesson, writing checks and handing them over to audience members along with expensive prizes in an effort to offset the sudden burden of a peak income tax.