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insaneoctane
Well-Known Member
TaoJones
Beyond Driven
Not so much an issue for Tesla, whose tax credit will be over and done with by eoy 2019, more or less (death by natural causes).
I don’t expect much from this Congress, and even less from the GOP insofar as their collective efforts for tax sabotage ^H^H^H reform.
With midterm elections now just 12 months away, expect the practical, realized damage to be minimal. Things like the EV tax credit aren’t shiny object enough to mess with.
I don’t expect much from this Congress, and even less from the GOP insofar as their collective efforts for tax sabotage ^H^H^H reform.
With midterm elections now just 12 months away, expect the practical, realized damage to be minimal. Things like the EV tax credit aren’t shiny object enough to mess with.
Between this concern and the loss of most of the 401K deduction, several folks may feel like doing less spending...
Yes, and if tax reform prematurely kills the EV tax credit before Elon delivers me a 3, I’m canceling and going with a Honda.
I waited in line for hours on the morning of day 1 with the expectation of being able to secure a $35k Tesla for the price of a decently optioned Civic, which would be made possible with the full $7,500 tax credit.
I waited in line for hours on the morning of day 1 with the expectation of being able to secure a $35k Tesla for the price of a decently optioned Civic, which would be made possible with the full $7,500 tax credit.
T34ME
Active Member
The oil industry spent a lot of money to elect the political climate we see now. They would love to see EV incentives and compliance cars go away, so would the legacy automakers. No matter to me. I will be purchasing a model 3, tax credit or not. It IS the future of personal transportation.
You couldn't pay me $7500 to forgo a Tesla and drive a Civic!
Before I was exposed to modern EVs, I would have been fine with something basic like a Civic or some other reliable gas car. I'm not going back to gasoline now, though.
insaneoctane
Well-Known Member
FlatSix911
Porsche 918 Hybrid
Agreed. The $7,500 tax credit will be phased out long before any real tax reform is passed and in effect
Sunshine State
Automotive Enthusiast
The flat $7500 didn’t make sense in the first place, it should have been a percentage with a cap. I did take advantage of it a couple times just because it was offered and I could. After the last 8 years of reckless spending I hope now they rethink everything but passing common sense reforms are difficult with the opposition to ending any handout.
1.5+ billions is chump change compare to the corporate/wealthy hand out
Sunshine State
Automotive Enthusiast
The entitlements will never end, that’s a huge moral problem. It’s also not just one program like EV credits, it the combined load. I’m not really sure what the "wealthy handouts" are, where does that money come from.
whitex
Well-Known Member
Yes, the tax incentives helped motivate me to buy my first Tesla, since it was a new technology and therefore a higher risk, so I saw the tax incentives (federal and state) as a way to offset the risk and get into a Tesla instead of another Lexus. There is a good chance that if it wasn't for that, I wouldn't have bought the first one, which lead to more Tesla's and effectively converting us to EV only. The incentives helped with the other Teslas as well, heck, the reason to getting the second one so soon was due to expiring state tax incentives, but the first one was the key. Had I not purchased my first 60 (it was a 60 to minimize the risk, I figured least depreciation on lowest model in case this whole EV experiment was to blow up on me), I would probably be driving a Lexus, a Porsche, or a BMW.
So yes, the incentive did its job - switched my family over to EV's, probably for good.
Another way to look at it, the difference between 60 and 85 in the past was $8K. If you think $7.5K doesn't make a difference to anyone buying a $75K car, then nobody would have bought the 60, everyone would have just paid for the 85, and yet they didn't, so obviously it did make a difference to them. Notice btw that Tesla is also in a very unique position where people stretch their budgets to get into an EV. Tesla is often the most expensive car they ever bought. Why? Because they have been the only practical EV available. Had there been a Model 3 for $35K, guaranteed a large percentage of people would have bought it instead of the Model S. To those people, any incentive helped.
Extremely low chance it will end to effect tesla buyers at the 7500 level. Very weak chance it will be removed and effective at some time when Tesla's level of credit has already started to taper off.
But then at that point it would do more damage to other car manufacturers who still have a longer runway on their use of the credit and they would cry foul because that would give Tesla advantage of having fully exploited the credit while they have not fully exploited the credit. Strongest chance that it just remains in place.
Although as a competitive matter Tesla might even prefer that it go away since now that they have almost fully exploited it having it go away would just harm their competition who would have an upcoming advantage of being able to market their cars with the full credit while Tesla would not have that advantage.
But then at that point it would do more damage to other car manufacturers who still have a longer runway on their use of the credit and they would cry foul because that would give Tesla advantage of having fully exploited the credit while they have not fully exploited the credit. Strongest chance that it just remains in place.
Although as a competitive matter Tesla might even prefer that it go away since now that they have almost fully exploited it having it go away would just harm their competition who would have an upcoming advantage of being able to market their cars with the full credit while Tesla would not have that advantage.
I don’t want another ICE, trust me, but my wife is really doubting that the 3 will ever arrive and only desires reliability, safety, and heated seats in a car. If we miss out on the full tax credit, I’m certain a decently optioned Honda for around $30k is what we’ll end up with. Also not helping my case for the 3 is her new mom’s group friends all deciding that buying an SUV or minivan is critical when you have a baby. We’re the only family left with a sedan... c’mon, Elon!
The tax credits on PEVs will phase out anyway so it'd be easier for all the politicians who privately support it to set a hard expiration date like 12/31/2019 to keep the base quiet and to stop money going to foreign laggards.
More likely to lose the state sales tax deduction (or at least a significant portion of it), I think. It's been a long-time target due to the fundamental irrationality of it, it'd suit Republican politics (because the prime target would be wealthy blue states) and it'd raise tax revenue by an amount that dwarfs the PEV tax credit.
More likely to lose the state sales tax deduction (or at least a significant portion of it), I think. It's been a long-time target due to the fundamental irrationality of it, it'd suit Republican politics (because the prime target would be wealthy blue states) and it'd raise tax revenue by an amount that dwarfs the PEV tax credit.
Just a handful of topics that are open questions:
1) MACRS or even CAPEX expensing for tax purposes in a single year, as proposed;
2) Carried Interest;
3) Estate tax repeal (only applies to estates above $10mm anyway);
4) Sub S cessation of personal rates but allowing new corporate rate of proposed 20% to apply (that one will reduce taxes fro only the top 3-5% of Sub S owners, mostly already very wealthy real estate and professional services firms).
It does go on. My US federal tax rate will drop to nearly zero if these go through. Great for me, sad for the vast majority of US taxpayers, especially those who have state and local income taxes. We who pay tax in Florida really win.
The US still taxes global income of nonresidents which makes most of us who, like me, live outside the US, to establish US residency also so as to minimize the impact of FATCA.
It seems to be the tax credits for EV's will probably be eliminated once they figure out how to do that. Still, by the time that happens it's quite likely that Tesla, Nissan and GM will already have used all their credits. Clearly I don't think they'll get around to this one this year or even next year.
Whatever happens it will be quite surprising if any significant Federal tax modifications actually happen this year. I think it is much more likely that they'll succeed in reducing the IRS enforcement budget even further. As it is enforcement has already been shifted to be highly regressive.
