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Sec. 401. Modification of limitations on new qualified plug-in electric drive
motor vehicle credit (§30D).
The provision expands the qualified plug-in electric drive motor vehicle credit under Section
30D to apply a new transition period for vehicle sales of a manufacturer between 200,000 and
600,000 electric vehicles (EVs), under which the credit is reduced by $500. The provision
replaces the current phaseout period (which begins at 200,000 vehicles) with a phaseout period
that instead begins during the second calendar quarter after the 600,000-vehicle threshold is
reached. At the start of the new phaseout period, the credit is reduced by 50% for one quarter and
terminates thereafter. For manufacturers that pass the 200,000-vehicle threshold before the
enactment of this bill, the number of vehicles sold in between 200,000 and those sold on the date
of enactment are excluded to determine when the 600,000-vehicle threshold is reached.
The provision extends the 2-wheeled plug-in electric vehicle credit through 2026. It also extends
the 3-wheeled plug-in electric vehicle credit through 2026.
Rumor has it that it will not be retroactive. So only cars sold after the law passes. This could change however since it hasn't been passed.Section on new vehicles:
If it does pass, will it apply to vehicles sold this calendar year or for vehicles after it was passed?
I do not believe there is a way for them to track these tax credits if there is an income cap. How would anyone ever know how many credits have been issued at any given moment in time? If these were rebate checks like California issues then yes there is a way to track the no of "certificates" issued. But the tax filing is at the end of calendar year and who is to say what the count is say in the month of Sept of any given year.
if my argument holds water, they can't reliably attach it to income limit and still keep a running count.
Others already pointed out the income cap is only for a new section about used vehicles. The part about extending the existing tax credit says nothing about an income cap, just extending the previous 200k unit to 600k unit (reset to when the law passes).I do not believe there is a way for them to track these tax credits if there is an income cap. How would anyone ever know how many credits have been issued at any given moment in time? If these were rebate checks like California issues then yes there is a way to track the no of "certificates" issued. But the tax filing is at the end of calendar year and who is to say what the count is say in the month of Sept of any given year.
if my argument holds water, they can't reliably attach it to income limit and still keep a running count.
How many people who make less than $40K a year buy new Teslas? If what you're saying is true, the OP headline is misleading then, the credit is not coming back to most Tesla purchasers, as most of them make more than $40K a year.Not really. First, the bill isn’t even close to law. Second, if you read it, the credit is only for lower-priced vehicles and cuts out at $40,000 income.
Politicians have never been known for pragmatism or logic, and on the left that usually manifests itself in things like this. You have a new technology which you want to encourage, but because it's new it's expensive. So, why not give a rebate only to people who cannot afford it anyways, because giving a rebate to people who can afford the new tech is not fair, right? It allows the politicians to claim they are doing good but it doesn't costs them much.It’s been in the discussion of the legislation itself, from multiple sources. One of the main criticisms of the original credit by the Democrats was that it went mainly to wealthy people. The direct quote about those income limits (which line up with the current bill’s pre-owned limits) was on CNBC.
A lot of the discussion has been at the state level:
Rebates are key to Democrats’ transportation electrification package. Paying for them is a harder nut to crack. - Virginia Mercury
The chatter has been that income limits would be a condition to bringing any credit back. Right now it does directly mention used vehicles, but individual bill sponsors have directly mentioned adding an income cap.
Lobby groups have been pushing hard to limit the credit to non-luxury vehicles: Hey Congress – please fix the federal tax credit for electric cars
By giving incentives to people who cannot afford the product anyways? What's next, solar roof incentives to the homeless? It encourages renewable energy and helps the poor homeless! Win-win all around! It sure sounds like an idea the democrats would get behind.One of the main (and disingenuous) ways that EVs have consistently been attacked by the Koch/Exxon-puppet crowd is as ‘toys for the rich’. So, the Biden admin did need to kick the legs out from under that narrative.
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Ah, you just discovered the genius of the politicians proposing it, a $7,000 tax rebate limited to people who don't pay even close to $7,000 in tax ($40K income limit). Great optics, public rejoices, politicians get votes, is costs next to nothing (and accomplishes next to nothing, but most voters won't understand it anyways).If this becomes law, Tesla's additional 400,000 limit will run out in a year or less. If they put in an income limit, it will probably be $60k to $70k a year as I believe you need to make at a minimum $51K to own $7000 in federal tax.
It looks good on paper but ultimately nobody who makes $40,000 a year can realistically afford to buy a brand new Tesla. Nor should they. So what ends up happening is that the truly wealthy people that find ways to hide/offset their actual income and show it under $40,000 even though they're grossing hundreds of thousands of dollars a year and up reaping the rewards of such a tax shelter. The people who don't know the first thing about finances rejoice in the very laws that serve to keep them down even more because they don't know any better while the rich keep getting richer. Yadda yadda yadda Biden 2024!Ah, you just discovered the genius of the politicians proposing it, a $7,000 tax rebate limited to people who don't pay even close to $7,000 in tax ($40K income limit). Great optics, public rejoices, politicians get votes, is costs next to nothing (and accomplishes next to nothing, but most voters won't understand it anyways).
the 40k income limit is for used cars. And presumably not directed towards teslas.. it's for bolts, etcAh, you just discovered the genius of the politicians proposing it, a $7,000 tax rebate limited to people who don't pay even close to $7,000 in tax ($40K income limit). Great optics, public rejoices, politicians get votes, is costs next to nothing (and accomplishes next to nothing, but most voters won't understand it anyways).
By giving incentives to people who cannot afford the product anyways? What's next, solar roof incentives to the homeless? It encourages renewable energy and helps the poor homeless! Win-win all around! It sure sounds like an idea the democrats would get behind.
It's incredibly low, if indeed the income cap is $30k as mentioned upthread, there aren't many EVs in the market that would be even in the price range of people under that cap. I know when I was making that much I had an $8,000 used car and even that was a bit indulgent as a monthly expense (but I am, and always have been, a "car guy").Finally, the tax credit is for USED vehicles, which are inherently less expensive. Though I still think the income cap is a bit too low.
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It's incredibly low, if indeed the income cap is $30k as mentioned upthread, there aren't many EVs in the market that would be even in the price range of people under that cap. I know when I was making that much I had an $8,000 used car and even that was a bit indulgent as a monthly expense (but I am, and always have been, a "car guy").
The AGI limits are only for used vehicles, not new ones.Not really. First, the bill isn’t even close to law. Second, if you read it, the credit is only for lower-priced vehicles and cuts out at $40,000 income.