Congress Proposes Repeal of $7,500 EV Tax Credit

Discussion in 'HardForum Tech News' started by Megalith, Nov 4, 2017.

  1. 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.
     
  2. Mugato

    Mugato Muh Feelz!

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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.
     
  3. /dev/null

    /dev/null [H]ardForum Junkie

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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.
     
  4. /dev/null

    /dev/null [H]ardForum Junkie

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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.
     
  5. Evil Scooter

    Evil Scooter [H]ard|Gawd

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    Good... hope they pull the plug on all Musks's grants, tax breaks, discounted loans and environmental credits while they are at it.
     
  6. sfsuphysics

    sfsuphysics I don't get it

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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.
     
  7. Ranulfo

    Ranulfo [H]ard|Gawd

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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".
     
  8. -Strelok-

    -Strelok- [H]ardForum Junkie

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    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.
     
  9. Jim Kim

    Jim Kim 2[H]4U

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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.
     
  10. nutzo

    nutzo [H]ardness Supreme

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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.
     
  11. cyclone3d

    cyclone3d [H]ardForum Junkie

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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.
     
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  12. nutzo

    nutzo [H]ardness Supreme

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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.
     
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  13. Tyns

    Tyns Limp Gawd

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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.
     
  14. Tyns

    Tyns Limp Gawd

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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.
     
  15. Tyns

    Tyns Limp Gawd

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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).
     
  16. Tyns

    Tyns Limp Gawd

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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.
     
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  17. Wierdo

    Wierdo [H]ard|Gawd

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    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.

     
    Last edited: Nov 6, 2017
  18. nightanole

    nightanole [H]ard|Gawd

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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.
     
  19. sfsuphysics

    sfsuphysics I don't get it

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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"
     
  20. /dev/null

    /dev/null [H]ardForum Junkie

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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...
     
  21. /dev/null

    /dev/null [H]ardForum Junkie

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    I don't think this is limited to "low end" buyers...
     
  22. Jagger100

    Jagger100 [H]ardness Supreme

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  23. Jagger100

    Jagger100 [H]ardness Supreme

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    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.
     
  24. HockeyJon

    HockeyJon [H]ard|Gawd

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    Traditional metrics are being thrown away all over the place in favour of speculation, unfortunately. Tesla is just one example.
     
  25. jcollett69

    jcollett69 Limp Gawd

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    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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  26. nightanole

    nightanole [H]ard|Gawd

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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.
     
  27. Lizard Testes

    Lizard Testes Gawd

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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.
     
  28. mope54

    mope54 [H]ardness Supreme

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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.
     
  29. ep0x73

    ep0x73 2[H]4U

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    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,
     
  30. nightanole

    nightanole [H]ard|Gawd

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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.
     
  31. mope54

    mope54 [H]ardness Supreme

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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.
     
    Last edited: Nov 6, 2017
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  32. Guarana [BAWLS]

    Guarana [BAWLS] [H]ard|Gawd

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    No, we really don't. This has been proven to be verifiably false in every possible way.
     
  33. mope54

    mope54 [H]ardness Supreme

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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.
     
  34. Dr. Righteous

    Dr. Righteous 2[H]4U

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    THIS--->

    The fact that it took tax breaks and incentives to encourage people to buy EV cars says a whole lot.
     
  35. lcpiper

    lcpiper [H]ardForum Junkie

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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.
     
  36. lcpiper

    lcpiper [H]ardForum Junkie

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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?
     
  37. nutzo

    nutzo [H]ardness Supreme

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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.
     
  38. mope54

    mope54 [H]ardness Supreme

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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.
     
  39. nutzo

    nutzo [H]ardness Supreme

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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.
     
  40. mope54

    mope54 [H]ardness Supreme

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    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.