GOP tax reform bill would end the $7500 EV tax credit (and other tax related grousing and grumbling)

[TEG]

Form response to form

Write your congresspeople now, it only takes a minute:
Plug In America

One response from one of my representatives:

...

Thank you for contacting me regarding the federal tax credit for plug-in electric motorcycles and three-wheeled vehicles, also known as the Section 30D (g) credit. I appreciate the time you took to write to me and I welcome your thoughts on this issue.

Section 30D (g) of the Internal Revenue Code provides a tax credit for up to 10% of the cost of an electric motorcycle, with a maximum credit amount of $2,500. As you may know, our Congressional District is home to one of the world’s leading manufacturers of performance electric motorcycles, and I’ve been a strong supporter of this credit since it was created by Congress in the Recovery Act in 2009. Like many clean energy credits that were created in the Recovery Act, the Section 30D(g) credit has been allowed to expire intermittently by Congress, only to be restored retroactively. The 30D(g) expired at the end of 2016 , but it is my hope that it will be extended along with other clean energy credits either in standalone legislation or as part of broader tax reform.

Electric cars, trucks, and motorcycles will play a critical role in our efforts to combat climate change by reducing fossil fuel consumption, and I think we must ensure that the industry is commercially viable before eliminating tax credits. While the tax reform legislation currently being debated in Congress eliminates this tax credit , you can rest assured that I will continue to fight for these important tax incentives.

...

It appears that they are getting attention for the electric motorcycle credit not just the auto credit.

 

[TEG]

Also, for reference: Plug In Electric Vehicle Credit IRC 30 and IRC 30D | Internal Revenue Service

 

[Tonymil]

I'm a facts and data kinda guy. While I'm as irritated as anyone about the proposed removal of the EV tax credit, has anyone actually compared their taxes both BEFORE and AFTER the proposed bill? I did and it was significant. As a matter of fact, it would be financially smarter for me to choose the proposed bill without EV credits vs leaving things the way they are currently... PS- I still want the EV tax credit to be left intact! Maybe we could do the tax bill as is AND put the EV credit back in?

You say that you're a facts and data kinda guy, but do you also factor in costs to others? How about societal costs? Or do you only look at how a particular issue affects you? This tax bill is overwhelmingly horrible for most Americans and for the nation as a whole. Here's a little data for you to digest:
The House Republican tax bill, explained

 

[deonb]

I'm a facts and data kinda guy. While I'm as irritated as anyone about the proposed removal of the EV tax credit, has anyone actually compared their taxes both BEFORE and AFTER the proposed bill? I did and it was significant. As a matter of fact, it would be financially smarter for me to choose the proposed bill without EV credits vs leaving things the way they are currently (not necessarily due to 1 tax year of savings, but certainly over multiple). Additionally, the new tax bill would promote me to no longer itemize my return, so my taxes would also be much much simpler. So, I'd invite folks to plug their numbers in to the calculator and see the difference between current tax code and proposed and see what (if any) savings they might get.

The calculator is goofy when it comes to W2 vs K1 income.

50/50 splitting your income between W2 and K1 shouldn’t result in more taxes than just having all your income through K1, but it does.

 

[206er]

Sorry if this point has already been made, but those who are simply accepting the GOP tax plan as a done deal and are only considering how they personally will respond to the loss of the EV tax credit, might remember that, as citizens in a democracy, they have the right to participate in the democratic process. If you believe the EV credit is worth saving, you should consider contacting your representative and senators and expressing your opposition to ending this provision in the tax code. This step may be especially impactful if you live in a "red" district or state. While some may doubt it will do any good, surely the lessons of the ACA political battle of the past 9 months apply. The half million people who reserved a Model 3 might well influence the final shape of the current tax cut proposal. It is surely worth a try -- at least as worthy, and possibly more productive, than wringing of hands. Rather than wringing one's hands, try ringing your representative/senator.

Unless Russian Facebook ads, targeted hacking, and a vocal minority hijack our democratic process (again).

 

[TEG]

I can't verify if this was factual or not, but apparently Elon has been asking for the subsidies to be removed..?

If true, that is frustrating. The incentive is in part responsible for the early demand for Model 3.
Tesla didn't shy away from talking about it.
It is the first thing listed here: Tesla: Incentives

There were lots of articles talking about "The $25K Model 3":
Tesla Model 3 can now officially cost only ~$25,000 in California after incentives
You can get a Tesla Model 3 for as little as $25,000
A Tesla Model 3 in California could cost you only $25,000 - Car Keys
Tesla's Model 3 could cost $25,000 or less after tax incentives

I was noticing this from an old Tesla newsletter:

...Today we’re excited to introduce the all-wheel drive Model X 60D. Starting at $64,000 (after incentives)...

They have been known to quote prices assuming that the customer will get incentives...

 

[deonb]

You say that you're a facts and data kinda guy, but do you also factor in costs to others? How about societal costs? Or do you only look at how a particular issue affects you? This tax bill is overwhelmingly horrible for most Americans and for the nation as a whole. Here's a little data for you to digest:
The House Republican tax bill, explained

That article is pretty biased with a bunch of untruths in there. Use the calculator and check for yourself instead.

 

[Qbenjamin]

If true, that is frustrating. The incentive is in part responsible for the early demand for Model 3.
Tesla didn't shy away from talking about it.
It is the first thing listed here: Tesla: Incentives
They have been known to quote prices assuming that the customer will get incentives...

I started doing more Google searches and noticed that there are quite a few times that Elon has been vocal about removing the tax credit. It's been mentioned that it'll have ZERO impact on Tesla sales, but I certainly don't believe that.

 

[206er]

for Elon, eliminating the tax credit would just provide a competitive edge over the other companies. I assume that he didn't anticipate the credit disappearing before a decent number of US buyers would acquire the Model 3... rather just wanted to see it go after Tesla realized their 200k limit.

Ideally, we will someday live in a world where a $20k Honda Civic will be all electric and gas stations will be as scarce as telephone booths. A little over a year ago, that world didn't seem too far away. Unfortunately with big oil calling the shots in DC, it now seems like a long way off (again).

 

[Qbenjamin]

Point is the system is broken as is. I made high 6 figures this year, and because of various state and federal loopholes and tax credits (thank you renewables, etc.) I will likely have a 2017 tax burden of less than 7%. Even I know that's not fair.

What am I doing wrong to be paying 25% then..? Maybe we need to have some kids, this DINK household is working against us.

 

[206er]

I started doing more Google searches and noticed that there are quite a few times that Elon has been vocal about removing the tax credit. It's been mentioned that it'll have ZERO impact on Tesla sales, but I certainly don't believe that.

Zero impact on sales (yeah right), yet it's a HUGE selling point advertised on their site.

I generally like Elon, but sometimes wonder if he's too far removed from an everyday "mass market" life to understand how the world works for non-billionaires.

 

[Waiting4M3]

If true, that is frustrating. The incentive is in part responsible for the early demand for Model 3.
Tesla didn't shy away from talking about it.
It is the first thing listed here: Tesla: Incentives

There were lots of articles talking about "The $25K Model 3":
Tesla Model 3 can now officially cost only ~$25,000 in California after incentives
You can get a Tesla Model 3 for as little as $25,000
A Tesla Model 3 in California could cost you only $25,000 - Car Keys
Tesla's Model 3 could cost $25,000 or less after tax incentives

I was noticing this from an old Tesla newsletter:


They have been known to quote prices assuming that the customer will get incentives...

I don't remember ever seeing Tesla referring to their M3 price after factoring in the incentives, the links are all just blogs wishful thinking.

OTOH, GM is officially touting the Bolt price after incentives:

 

[206er]

What am I doing wrong to be paying 25% then..? Maybe we need to have some kids, this DINK household is working against us.

Don't worry, they're trying to eliminate the child tax credit, too.

 

[TEG]

for Elon, eliminating the tax credit would just provide a competitive edge over the other companies. I assume that he didn't anticipate the credit disappearing before a decent number of US buyers would acquire the Model 3... rather just wanted to see it go after Tesla realized their 200k limit...

Yeah, maybe he started petitioning too soon to have it removed. He tends to be talking about things in the (somewhat far) future tense, considering what things will be like in at least a couple of years.

There was all that talk of working the system to maximize those that get the incentive...

Elon Musk on Twitter

Musk Hints Tesla Could Try To Maximize Tax Credit-Eligible Model 3 Deliveries After Credit Expires - HybridCars.com
Tesla’s new Model 3 production plan will optimize access to the federal tax credit

I have literally been waiting and saving up for over 10 years to buy my first Tesla, and if I just miss out on the incentives it means that dream may die and I give up on getting one.

Model 3 buyers who are employees (of Tesla, SpaceX, Solarcity, ...), their family members, certain "VIPs", and people who already bought previous Tesla vehicles may get the last of the incentives and it looks like the "line waiters", many of which who were waiting for the "affordable Tesla", won't get the incentives because Elon says we don't need them?

Tesla is leaving us hanging by a thread still showing a December first delivery window, but based on all the delay news, it doesn't sound at all likely that we will be getting a Model 3 this year.

I am seriously considering getting a Bolt now instead so that I still qualify for the incentive while it still exists.

 

[gregincal]

While it won't be zero impact to Tesla, the impact could be limited. It pretty much only matters for 2018 sales, and they are working through the backlog of reservations during that time anyway. The overall success of the Model 3 will be how many they sell over the next few years, when they wouldn't have the tax credit no matter what. As people said, during the years after 2018 the elimination is an advantage to Tesla, where other manufacturers could introduce new EVs and gain a temporary advantage to build market share.

 

[Krazaak]

I started doing more Google searches and noticed that there are quite a few times that Elon has been vocal about removing the tax credit. It's been mentioned that it'll have ZERO impact on Tesla sales, but I certainly don't believe that.

My understanding is that Elon was referring to the CARB credits, not the tax credit for purchases.

It'd definitely be to Tesla's advantage if the tax credit was killed after it phased out for Tesla, but it certainly drives demand today. How much that actual benefits Tesla is up for debate, since they're typically production constrained, not demand constrained

 

[Trips]

I'm a facts and data kinda guy. While I'm as irritated as anyone about the proposed removal of the EV tax credit, has anyone actually compared their taxes both BEFORE and AFTER the proposed bill? I did and it was significant. As a matter of fact, it would be financially smarter for me to choose the proposed bill without EV credits vs leaving things the way they are currently (not necessarily due to 1 tax year of savings, but certainly over multiple). Additionally, the new tax bill would promote me to no longer itemize my return, so my taxes would also be much much simpler. So, I'd invite folks to plug their numbers in to the calculator and see the difference between current tax code and proposed and see what (if any) savings they might get. Maybe it takes a few tax years, but if you got the equivalent of the EV credit, you may have options. Since I'm only a single data point, please share any results/findings you discover.
Here's the calculator

PS- I still want the EV tax credit to be left intact! Maybe we could do the tax bill as is AND put the EV credit back in?

2016 Tax Burden: $9,851
Proposed Tax Burden: $10,288
Tax Increase: $437
- Single, No Kids, "Middle Income", Homeowner (<$500k value but $9k/year in property taxes) with Student Loans

 

[insaneoctane]

You say that you're a facts and data kinda guy, but do you also factor in costs to others? How about societal costs? Or do you only look at how a particular issue affects you? This tax bill is overwhelmingly horrible for most Americans and for the nation as a whole. Here's a little data for you to digest:
The House Republican tax bill, explained

Yup. Facts and data. I am not asking how squishy the proposed bill makes you feel, I am asking if it reduces your tax burden. Period. And by the way did you really ask me "Or do you only look at how a particular issue affects you?" in response to a post where I literally asked others how it affects them??? "So, I'd invite folks to plug their numbers in to the calculator and see the difference between current tax code and proposed and see what (if any) savings they might get."
Amazing.

 

[McRat]

It's a huge chunk of discretionary spending, which the chart should have been clear about. It looks smaller when you compare it in combination with healthcare and social security, a tactic the Right uses to cover up their excess spending on military. It will look even smaller as deficit and interest on the debt balloons further under Republican leadership that doesn't know how to properly cut spending before cutting taxes. This is an area that the Republicans are supposed to be good at, so I'm very hard on them for it.

Military spending is one of the few areas our government is mandated to spend funds on per the Declaration of Independence and the Constitution.

All people have inalienable rights—among them, the right to life, liberty, and the pursuit of happiness. To secure these rights, the U.S. Constitution creates a government of the people to “establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity.” - Heritage Foundation

It is not partisan. You might have noticed there was military spending during the last administration. And all others.

 

[insaneoctane]

2016 Tax Burden: $9,851
Proposed Tax Burden: $10,288
Tax Increase: $437
- Single, No Kids, "Middle Income", Homeowner (<$500k value but $9k/year in property taxes) with Student Loans

Just to be fair, the site I linked to also offers to calculate 2017 taxes based on the current law. Did you plug the same numbers into that for a true comparison of the same tax year? We don't want to compare last year's taxes with proposed next years.