Congress Proposes Repeal of $7,500 EV Tax Credit

Jarod888 said:
I'm good with all of that except the 2nd house mortgage deduction.
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Limits for interest deductions on home loans have dropped from $1 million to $500,000. So if their combined notes are over $500K, they no longer get that break.

This will really hurt people who buy up homes cheap, mortgage them, then rent them out. I have two friends who each own over 5 homes all section 8. They are barely making ends meet with their unreliable clientele. Its harder than you think to turn a profit on a rental. They hold onto them with the hopes that appreciation, and the note pay down will pay off as passive income in retirement.

Me, I do it the old fashioned way, stuffing it away.
 
Jarod888 said:
And you people with your fucking gas-less vehicles are nearly the entire reason why the roads suck, well and more fuel efficient vehicles. What we need is to get back to mpg standards of 20 for cars and 10 to 12 for trucks and SUVs . by simply doing that, we will use more fuel and thus increase the amount of fuel tax money for road improvements.
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Not only that but these rich people you speak of don’t sell used cars at a loss broski, they hardly sell them at all, why would they? Got a 5 car garage? Stick it in the corner, pass it down to a relative, let it sit in the yard when the batteries die and it’s not worth the cost of replacement.
 
Jarod888 said:
And you people with your fucking gas-less vehicles are nearly the entire reason why the roads suck, well and more fuel efficient vehicles. What we need is to get back to mpg standards of 20 for cars and 10 to 12 for trucks and SUVs . by simply doing that, we will use more fuel and thus increase the amount of fuel tax money for road improvements.
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There are other less polluting ways of raising money for roads. No reason to be less efficient because we can't figure out another way to raise money. Also: I don't own an EV and won't in the near future. I'm mostly curious about possibly picking up a (4th) car for the wife as a backup/runabout.

Also: roads don't suck near me, but my property taxes are 2.5% (yearly -- top 20 of ~820 counties in the US) of the value of my house, my state tax just went up 67% and I pay $60-$100/month in tolls to take care of the same roads I'm paying for 2 other ways. The gas tax here is only something like $0.20(?) a gallon so doesn't do diddly anyhow.
 
Mugato said:
Not only that but these rich people you speak of don’t sell used cars at a loss broski, they hardly sell them at all, why would they? Got a 5 car garage? Stick it in the corner, pass it down to a relative, let it sit in the yard when the batteries die and it’s not worth the cost of replacement.
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I have a friend who works at an AUDI dealership and a guy just traded in a car w/ 3,000 miles & took a $30k loss in depreciation....so...yeah. Rich people don't care about depreciation.
 
Good... hope they pull the plug on all Musks's grants, tax breaks, discounted loans and environmental credits while they are at it.
 
Jarod888 said:
And you people with your fucking gas-less vehicles are nearly the entire reason why the roads suck, well and more fuel efficient vehicles. What we need is to get back to mpg standards of 20 for cars and 10 to 12 for trucks and SUVs . by simply doing that, we will use more fuel and thus increase the amount of fuel tax money for road improvements.
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There's a multitude of reasons for that, 1) the narrow mindedness of politicians for not anticipating the future, more fuel efficient vehicles were not exactly a surprise. Don't go blaming the EVs on this. 2) the idiotic nature of politicians in having a per gallon tax that can only increase revenue as the number of miles driven increases each year at a rate that keeps up with the cost of repairing said roadways. 3) The greedy nature of politicians to never want to give up a tax, they probably could do just as well by increasing licensing fees on cars, or simply consider that as part of the budget and adjust income taxes accordingly, the mentality that only people driving cars should pay for the roadways is absolutely asinine since everyone uses them in some fashion (you like to eat food don't you?). 4) If you are going to go with the "only vehicles should pay to maintain the roads" mentality then you need to have a tax that's based on the gross vehicle weight of the car, and NOT how much fuel it uses. Fact of the matter is a 80,000 lbs semi bringing (whatever) to a store is going to be doing significantly more damage to the roads than 20 4000 pound automobiles, and use less fuel than those 20 cars as well.

So a quick google shows that EVs make up about 0.7% of the auto market in the country. Blaming them for being the reason why the roads suck goes beyond stupid, it's extra chromosome time for you levels of dumb.
 
/dev/null said:
You missed the point entirely:

7500 credit = more evs. More evs = lower cost used. The Rich eat the huge depreciation (of way more than 7500) and provide us normal folks with a cheap, gasoline-less 2nd car :)
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Yes, and how long is the warranty on that EV type car? How cheap are parts? Battery replacement cost? How many mechanics can actually fix it? Are you stuck going to a dealer/approved shop with the right tools to work on the computers in said EV car?

This isn't like picking up a well made Japanese car or even a decent Big3 domestic with known tech that is cheaper/easy to fix. This is picking up a Euro status mobile off a lease and learning that they often start having expensive (even for little stuff) problems around years 3-5. Or a nice new $80k Tesla with teething problems. Welcome to alpha tester status for your nice "cheap gasoline less 2nd car".
 
Power plants are more efficient than cars, electric cars are more efficient than ICE vehicles. Anyone disputing that needs to go research a bit more. Also you can have registration and other taxes to account for roads, you don’t need a fuel tax.
 
-Strelok- said:
Also you can have registration and other taxes to account for roads, you don’t need a fuel tax.
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A fuel tax is fare. Why should a person that drives 12,000 miles a year pay the same as one that drives 75,000 miles.
 
/dev/null said:
This filters down to "normal" car buyers however when they buy that 4 year old leaf with 23k on it for 9k..
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Except most lower end buyers also tend to live in apartments with no access to power to charge an electric car.
That's one of the reasons these small used electric cars are so cheap.
 
Tiberian said:
They might as well just come out and say "We're going to repeal every fucking thing that has ever made America a decent place to live (until recently): no tax credits or deductions for anything, you pay what the IRS says you pay and that's that."

That's where they're headed so, why dick around, just get the fuck on with it.
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This NOT a deduction. This is a CREDIT. In other words, electric vehicles are being subsidized by other tax payers... or.. Part of the taxes YOU are paying are being given to those who buy electric vehicles, and YOU are getting NOTHING in return. Redistribution of wealth is great until you are the person that the money is being taken from.
 
-Strelok- said:
Power plants are more efficient than cars, electric cars are more efficient than ICE vehicles. Anyone disputing that needs to go research a bit more. Also you can have registration and other taxes to account for roads, you don’t need a fuel tax.
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Efficiency is fine in the lab, but it maters how it translates into the real world.

An electric water heater has much higher efficiency numbers than a natural gas model, but a gas water heater costs half as much to run.

Same with an electric car. In many cases it can cost more to run than a hybrid, especially with the higher purchase cost.
Even a hybrid might not be worth it for some people due to their higher costs.

Get rid of the subsidies and let the market sort it out.
 
HockeyJon said:
Tesla investors are not your average breed, that’s why it’s worth more than GM according to the market.
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Yeah, they're different in a negative way. Have you not seen the sentiment turn on Tesla? It's down 21.5% just under two months - that's a bear market for TSLA. The issued junk bonds to raise capital last quarter and already spent the ~$1.5B it raised *and have no Model 3 production to show for it*.

TSLA bulls certainly are a different breed - irrational fanboys. They have lots in common with AMD investors.
 
nutzo said:
I've already read 2 stories about how these tax cuts are bad for the middle class in high tax states like California who will actually pay more.
One of the stories then went on with an example of a couple earning $500,000 a year and how they would be paying several thousand more in taxes.
$500,000 a year income puts this theoretical couple in the top 5%. That's the very definition of rich, and way beyond middle class even for California.

The other story had an example of a family with $250,000 in income.
Again, that's still the top 10%, and is not middle class.

I live in California, and my income is lower than the average for where I live, but still into the middle of the middle class.
Based on the information released, I would see my federal taxes decrease to about half what I'm currently paying, with no need to itemize just to save a few hundred.
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I think one of the goals is to punish high-spending states but I don't think the SALT provisions will remain - they may just be a negotiating tactic.
 
viper1152012 said:
My dad's a disabled veteran who bought a Chevy Volt to escape from the costs of his v8 pickup.

The tax incentive only applies to the year it is put into service.

It only cancels out federal tax owed and does not come back as a rebate.

It applies mostly to external plug in cars..ie volt.

You cannot get the credit again.

Most people buying them are lower or middle class and don't fully utilize the credit entirely because they don't owe that much.

When I graduate from my graduate program I will likely buy one to offset my first years federal tax and get my junk car off the road.

My old car leaks, smokes, and burns fuel poorly.

The people saying it's their money is bunk. I have paid into taxes too and if the government wants to help me get out of my car and into a efficient vehicle then its my right as a tax payer.
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Different tax break - the $7500 is for manufacturers' first 200k EV vehicles produced. What this means is a Model 3 they're selling for $40k will have to sell for $47.5k for the same profit after the tax incentive expires (or is revoked).
 
sfsuphysics said:
Gotta love this board, whenever anything even remotely "green" (and yes I'll concede EV cars are debatable as green), seems everyone is a expert on everything from how taxes work to how a companies bottom line will be.

Now this is going to get messy.

Why would there be a tax break on the Chevy Volt? (maybe you mean Bolt? The Volt is a hybrid similar to the Prius). Either way if you're going to give a tax break for having an electric car why should it matter what car that is?


Hint, you aren't. The taxes you pay to the government is not based on the number of subsidies there are out there. Your taxes will not go down when/if this subsidy is repealed. Congress will continue to overspend whether it's a subsidy today, or some earmark bill for a toy wooden bow & arrow production plant in Fuckitall Kansas.


I believe there was an article to basically to the effect, that this is in fact not true. Power plants have much higher efficiency ratings at converting fossil fuels into usable energy, hence pollute less per Joule of energy made than a gas powered auto.


How about the unlisted subsides? Like how many billions (trillions?) have we spent projecting our military presence in order to try to keep stable the source of said fossil fuels? Do you think we would give two fucks about what happens in the Middle East unless we got something from them. And here's the kicker, we don't get that much oil from that region anyways! So we are effectively paying for military presence of the oil companies to sell oil/fuel to other countries, some not even US companies!



Because long ago we figured that having those of greater means supporting those of lesser is ultimately better for our country. Otherwise more of a persons ability to live gets taken away, this is the whole idea behind the standardized deduction, although it works very poorly considering the cost of living from region to region in the country. I think the average person pays about $9k a year, that's IRS income divided by number of tax payers, someone making $10k a year should only keep $1k because it's fair? Hey welcome to india


And way pray tell did you last have a say in how "your money" is spent if you ignore who you vote into congress? At the federal level we vote for representatives who we hope will keep fight for our interests, but we in no way have the ability to decide where and how money spent, and honestly thank fucking god for that.
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This guy mocking peoples' knowledge on taxes then gets it totally wrong. We do pay for those subsidies. Our government spends money it doesn't have and we, as tax paying citizens, are responsible for each dollar they spend. They can't cut taxes more because they need the revenue to pay for all the bullshit they spend on. The less they spend, the more likely we get to pay less taxes. Look at the taxes in CA and tell me their spending doesn't affect CA residents' taxes.
 
Improving the process is one thing, but to drop support for future industry altogether? That's unfortunate, but probably not the end of the world, probably translates to more sales in richer states and abroad, leaving the usual areas a bit more behind again on progress, ala internet and cellphone service in the past.

I assume future cars will come from China eventually, but this kinda makes their job easier when we don't even try to compete.

 
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Tyns said:
Different tax break - the $7500 is for manufacturers' first 200k EV vehicles produced. What this means is a Model 3 they're selling for $40k will have to sell for $47.5k for the same profit after the tax incentive expires (or is revoked).
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WAT

Are you telling the goverment gives car companies a $7500 tax break for each electric car the sell????

Pretty sure its what OP said, you can write off $7500 of federal taxes for the year you bought the car.

His gripe is, if you didnt have $7500 in fed taxes, you can not claim the full $7500.
 
Tyns said:
This guy mocking peoples' knowledge on taxes then gets it totally wrong. We do pay for those subsidies. Our government spends money it doesn't have and we, as tax paying citizens, are responsible for each dollar they spend. They can't cut taxes more because they need the revenue to pay for all the bullshit they spend on. The less they spend, the more likely we get to pay less taxes. Look at the taxes in CA and tell me their spending doesn't affect CA residents' taxes.
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You know it's considered common courtesy to only quote the part of the reply that pertains to what you are ranting on about, especially when it's a post that is replying to multiple other posts.

That said, yeah we do pay for those subsidies but there isn't a line item on our taxes for it, we pay a particular amount of taxes period. Congress passes a budget, period, the budget they pass does not always (usually doesn't) correlate with the amount of taxes that are collected on a federal level. Yes we are responsible for every dollar spent, but when are we actually going to be responsible for the dollars spent? They never get a budget UNDER budget, they always over spend, and they just raise the debt ceiling, and yeah I agree it's going to come crashing down some day, but currently if we cut $1 million dollars in one program, some fucker is going to see that as "Hey we saved a million bucks!!!! now lets spend $2 million"
 
Ranulfo said:
Yes, and how long is the warranty on that EV type car? How cheap are parts? Battery replacement cost? How many mechanics can actually fix it? Are you stuck going to a dealer/approved shop with the right tools to work on the computers in said EV car?

This isn't like picking up a well made Japanese car or even a decent Big3 domestic with known tech that is cheaper/easy to fix. This is picking up a Euro status mobile off a lease and learning that they often start having expensive (even for little stuff) problems around years 3-5. Or a nice new $80k Tesla with teething problems. Welcome to alpha tester status for your nice "cheap gasoline less 2nd car".
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Well when your EV (looking at leaf) new is $31k-$7,500 = $23,500 and 3 years later and 21k miles later the trade-in is 8k, you just depreciated $15,500. From what I've read an entire new battery pack is only 6k...
 
nutzo said:
Except most lower end buyers also tend to live in apartments with no access to power to charge an electric car.
That's one of the reasons these small used electric cars are so cheap.
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I don't think this is limited to "low end" buyers...
 
Honestly it should be a ramp out, even if its just 4 months. People will stop buying in the huff of having missed. Then rebound to where they should be. For something as capital intensive as car making, that would be devastating.
 
Tyns said:
Yeah, they're different in a negative way. Have you not seen the sentiment turn on Tesla? It's down 21.5% just under two months - that's a bear market for TSLA. The issued junk bonds to raise capital last quarter and already spent the ~$1.5B it raised *and have no Model 3 production to show for it*.

TSLA bulls certainly are a different breed - irrational fanboys. They have lots in common with AMD investors.
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Traditional metrics are being thrown away all over the place in favour of speculation, unfortunately. Tesla is just one example.
 
I could be wrong, but I believe the federal tax credit is only available on the first 200,000 EV vehicles produced by a given manufacturer. I believe Tesla has passed that mark, so Tesla purchases would not receive the credit.
 
jcollett69 said:
I could be wrong, but I believe the federal tax credit is only available on the first 200,000 EV vehicles produced by a given manufacturer. I believe Tesla has passed that mark, so Tesla purchases would not receive the credit.
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They were at 75k in jan, and shipped 50k additional cars this year. As of the model 3 "launch" production is down tremendously since the beginning of the year.

Most est put the 200k mark as mid next year for tesla. Considering most manufactures only sell 10k-20k per year, thats pretty dam good.
 
nutzo said:
I live in California, and my income is lower than the average for where I live, but still into the middle of the middle class.
Based on the information released, I would see my federal taxes decrease to about half what I'm currently paying, with no need to itemize just to save a few hundred.
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I very much doubt it, and if so you're an edge case that just happens to have the exact right tax situation where you get the maximum benefit from all the changes.

Californians on average are going to get reamed the hardest due to no longer being able to deduct SALT.
 
nightanole said:
They were at 75k in jan, and shipped 50k additional cars this year. As of the model 3 "launch" production is down tremendously since the beginning of the year.

Most est put the 200k mark as mid next year for tesla. Considering most manufactures only sell 10k-20k per year, thats pretty dam good.
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What are you talking about? Asian importers sell around 150K per month while domestic manufacturers sell around 300K per year. LMFAO, that's about 10K-20K vehicles per day, not per year.

Regardless, the tax credit phases out it doesn't just stop. After the initial 200K sold, any more in that quarter and possibly the following quarter still receive the full credit. Then the credit amount drops each consecutive quarter. Ideally, Tesla won't hit 200K until after the first quarter of 2018, which would give buyers full credit for a good portion of the year while they ramp up production even faster and customers would end up getting some credits until 2019.
 
If you have the $$ and want a EV then buy it but you should not get any tax break incentive to do so.
Let the market dictate,
 
mope54 said:
What are you talking about? Asian importers sell around 150K per month while domestic manufacturers sell around 300K per year. LMFAO, that's about 10K-20K vehicles per day, not per year.

Regardless, the tax credit phases out it doesn't just stop. After the initial 200K sold, any more in that quarter and possibly the following quarter still receive the full credit. Then the credit amount drops each consecutive quarter. Ideally, Tesla won't hit 200K until after the first quarter of 2018, which would give buyers full credit for a good portion of the year while they ramp up production even faster and customers would end up getting some credits until 2019.
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Ummm.... I just said that tesla wont hit 200k till mid 2018, you just said tesla wont hit 200k till mid 2018.

We are talking about cars for the $7500 credit. Americans are not buying 10k-20k ev cars a day.
 
nightanole said:
Ummm.... I just said that tesla wont hit 200k till mid 2018, you just said tesla wont hit 200k till mid 2018.

We are talking about cars for the $7500 credit. Americans are not buying 10k-20k ev cars a day.
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I said Tesla customers would continue getting the credit until mid-2018 and that comment was based on Tesla's projected ramp-up and hitting 200K in the first quarter of 2018. If Tesla doesn't hit 200K until mid-2018 then customers will still get the full $7500 credit until the first quarter of 2019.

The way it works is once the 200K car is delivered, the full credit is available for the rest of that quarter and through the next quarter. Then it goes down by half for 6 months and then halved again for another 6 months. In Tesla's case, customers could get some of the credit well into 2020.

Fair point regarding me taking your other comments out of context. My apologies, I get annoyed when people do that, too.
 
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Guarana [BAWLS] said:
No, we really don't. This has been proven to be verifiably false in every possible way.
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I don't want to get too hung up on this, but we actually *do* have the highest "effective" rate but corporations don't pay the effective rate so I'm not sure why it's called that.

That's what has been proven so you're correct that corporations don't pay that tax rate but laypersons would understand "effective rate" to be the rate someone pays according to how I've always used the term "effective" but that's not what it means in this context.
 
Tiberian said:
They might as well just come out and say "We're going to repeal every fucking thing that has ever made America a decent place to live (until recently): no tax credits or deductions for anything, you pay what the IRS says you pay and that's that."

That's where they're headed so, why dick around, just get the fuck on with it.
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I'm fine with it, it was bullshit to begin with. Tax credits for purchasing items that are too expensive to purchase because of the high manufacturing costs. As far as I am concerned, if the technology is so expensive that you have to get a government credit to make the purchase, the technology isn't ready for the market yet. I know, the hope is that if you can propel the production/sales number up that volume will drive lower manufacturing costs. But that's wishful thinking. I know it can happen but this is an excessive gamble without guarantees.

Anyone have the numbers? Why are the prices so high that they needs this level of government subsidy to become viable?

Why is a leaf so cheap that with the incentives, it's virtually free, but some Teslas are so expensive that the $7,500 tax credit amounts to giving the buyer a free option package on their new car?

And as I type this I see DigitalGriffin's post and I was thinking the exact same thing, right on brother.
 
BHenry said:
You already pay for everyone else's gas powered car, so why not pay for electric powered cars too? https://en.wikipedia.org/wiki/Energy_subsidies
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So, these subsidies are not leveled at the purchaser of vehicles, they are levied on the commercial energy infrastructure of the country, to the benefit of the majority of consumers to include people paying for natural gas to heat their homes. Apple sand oranges mate, apples and oranges. Paying into these subsidies isn't the same thing as paying in so people who buy EVs can get a break for their choice of car. And as I said earlier, unless you can show that increased sales will drive down costs to levels that make the subsidies unnecessary, what's the point?
 
Lizard Testes said:
I very much doubt it, and if so you're an edge case that just happens to have the exact right tax situation where you get the maximum benefit from all the changes.

Californians on average are going to get reamed the hardest due to no longer being able to deduct SALT.
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Only Californians that are going to get reamed are the people with high mortgages (well over $500K), and high property taxes (well over 10K)
Since you need to be making over $170k to even qualify for a mortgage that high, I don't think too many middle class are going to be affected. ($170K is over twice what I make and not really middle class)

Bought my house years ago, so I barely have enough interest and property taxes to itemize, even with significant charitable donations.
Under the new plan, the standard deduction (married) will be higher than I my itemized deductions, which means I'll pay lower taxes.
 
nutzo said:
Only Californians that are going to get reamed are the people with high mortgages (well over $500K), and high property taxes (well over 10K)
Since you need to be making over $170k to even qualify for a mortgage that high, I don't think too many middle class are going to be affected. ($170K is over twice what I make and not really middle class)

Bought my house years ago, so I barely have enough interest and property taxes to itemize, even with significant charitable donations.
Under the new plan, the standard deduction (married) will be higher than I my itemized deductions, which means I'll pay lower taxes.
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That's what I've been trying to explain to my friends. My wife and I have three properties and last year, since one purchase was in the middle of the year, we didn't have enough deductions to justify itemizing. It might make sense this year but we'll be doing better with a doubled standard deduction. There's no way my single friends with low mortgages/property taxes are going to benefit from itemizing even under the old system, let alone a doubled deduction. The problem is everyone seems to have had ownership == tax deductions drummed into their heads from birth so everyone assumes that's how it works when they buy a house.

If they were buying in SF/LA/SD then there'd be a different discussion, but as you point out they wouldn't qualify for a $500K+ mortgage anyway. I'm also going to save about $500 doing my own taxes.
 
mope54 said:
If they were buying in SF/LA/SD then there'd be a different discussion, but as you point out they wouldn't qualify for a $500K+ mortgage anyway. I'm also going to save about $500 doing my own taxes.
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I live south of LA, and houses in my track are running around $800k-$900k. No way could I qualify for a mortgage to buy my house today, even with 20% down.
Other than the people that are selling their old home & rolling their gain into a new house, I don't see how people can afford to buy.
 
Programs for first time home buyers are 3%. My wife and I just closed with 5% down, but we have multiple properties and stellar credit.
 
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