POLL: If the GOP tax reform kills the $7500 tax credit, will you still buy?

[McRat]

If we begin from the premise the paying taxes is a responsibility, ...

Are you sure that all the people who pay no Federal Income Tax are irresponsible? That's not what DNC says.

 

[ChadS]

If we begin from the premise the paying taxes is a responsibility, to fund the government services we demand, then rescinding a tax credit is not "pilfering." In fact, the tax credit is "pilfering" from all the people who pay taxes but cannot afford to buy a new car.
Neither you nor anybody else had a "right" to have your car purchase subsidized to the tune of $7,500 of other people's tax money.

I agree that one doesn't have a "right" to have their car subsidized (I will ignore the conflation of tax credits and subsidies), but you are making a very common mistake here.

Most people simply assume that the EV tax credit is something special and extra designed to give EVs a leg up. Legislators used the NPV of the GAO's 2008 estimate of lifetime petroleum tax credits per ICE (which was $12,000; that was only for tax credits to petroleum companies; it did not include military action, Hormuz security, or any externalities) to set the $7,500 tax credit amount. It was meant to level the playing field. This came about after the Bush administration tasked the DOE with finding cost-free ways to encourage US energy independence. The bipartisan bill that made it law was not controversial, and covered domestic fuels other than electricity.

If somebody buys an ICE instead of an EV, the same amount of tax credits are given out (actually more, but spread out over time so the amount is similar - or would be if all EV buyers could and did take the full EV tax credit, which is not the case). The EV tax credits will phase out; the petroleum credits will not. (Somebody will no doubt try to claim that there are no petroleum-specific tax credits. I will cheerfully ignore them - that has been covered in depth before, including with links to the tax code. The DOD, DOE, GAO, IMF and IEA have all put out documents discussing the huge cost and impact of the petroleum tax credits).

Rather, somebody came up with the hare-brained notion that we'd get more EVs on the road if the government subsidized their purchase at a time when demand already exceeds supply. (Same thing happened with the Prius.) If the Republicans do rescind the tax credit, it will be the first intelligent thing they've done since Lincoln freed the slaves.

This is also incorrect. The federal tax credit drives a HUGE number of purchases. See my review of studies on PEV incentive effectiveness HERE. Of particular interest are sections 3.2 and 3.2.1, beginning on page 12.

It is a little less effective on more expensive cars like Teslas (far less effective in surveys of enthusiasts like on these forums, but we are not typical buyers), and becoming less effective over time as EVs get lower prices and become more mainstream. It won't be needed forever. But for now it is still huge, and given the avoided costs of petroleum tax credits and externalities, seems like a complete no-brainer to me.

 

[Foxhound199]

If we begin from the premise the paying taxes is a responsibility, to fund the government services we demand, then rescinding a tax credit is not "pilfering." In fact, the tax credit is "pilfering" from all the people who pay taxes but cannot afford to buy a new car.

Neither you nor anybody else had a "right" to have your car purchase subsidized to the tune of $7,500 of other people's tax money. Rather, somebody came up with the hare-brained notion that we'd get more EVs on the road if the government subsidized their purchase at a time when demand already exceeds supply. (Same thing happened with the Prius.) If the Republicans do rescind the tax credit, it will be the first intelligent thing they've done since Lincoln freed the slaves.

I completely disagree. You're right that I am not entitled to that money, but you could say that about any income that could potentially be taxed. If my community passes a school levy that increases property taxes, are they raiding my wallet for that money? Well, yes! But the cause is generally agreed to be worthwhile, so it offsets the fact that we essentially monetarily penalize some to benefit others who need it.

Which takes me back to your interest in those who cannot afford the car. If the GOP was desperately searching the tax code for ways to reduce the burden on working and middle class Americans, and the chump change they could retrieve from this incentive program for some unknown reason just happened to make it all possible, I'd probably take the $7500 hit a little more in stride. But, we all know by now that the greatest beneficiaries of this plan by a wide margin will be the very wealthy and large corporations. Suddenly the justification for pulling the plug on electric vehicles seems a bit more suspect.

And you mentioned demand exceeding supply. I could walk out now and buy a leaf, a bolt, prius prime, or i3 before my lunch break is over. What you're more likely referring to is the massive lines and hype that accompanied the Model 3 reveal. I was there, standing in line at 5am. I'd like to say it was due to my fanatical devotion to Tesla, but the truth was much more pragmatic: I wanted the tax credit. The hype and enthusiasm surrounding the Model 3 was bought (but not yet paid for) in large part by the federal tax credit.

But if the Tesla credit is expiring soon and the overall cost of this program is tiny compared to the whole tax bill, why bother? If this is all part of a tax cut, why raise these taxes? Because the credit helped buy the Model 3 hype, and now Republicans are having buyers remorse. The program is on the cusp of accomplishing exactly what it was intended to do, and they're trying to torpedo the still nascent industry. It's a desperation shot that probably won't succeed, but my post was really about the determination not to let it result in one cent of my money being taken back from Tesla. If they're projecting crazy growth in all these other sectors they seem to favor over American sustainable energy technology, there's $7500 less I will be putting into the economy if this credit is eliminated. It's not a lot, but I have a feeling it's representative of the raw deals littering the effects of this abominable plan.

 

[labfm]

We all know the real reasons this on the table to be axed;

(1) Legacy auto lobby (oil, manufacturers, dealers etc)
(2) They probably ran numbers that show that the overwhelming majority of users of this tax rebate are in "blue" states or "blue" districts. No different than the removal of the state tax deduction.

 

[daniel]

…and this is why if I like a piece of art, I just buy a print. Looks the same, costs a fraction as much, works the same way.

Absolutely untrue. I own some original oil paintings and some prints. The prints only bear a resemblance to the originals. All of the texture is lost and the colors don't snap the way they do on an original. Even a high-quality giclee (which will still be very expensive, maybe 1/3 or 1/4 the cost of the original) is not the same as an original. Not to mention that while prints are available of all the really famous paintings, lesser-known artist's works are not always available as prints.

The painting I was referring to has considerable depth and contour of the paint, all of which would be lost in a print.

... If the GOP was desperately searching the tax code for ways to reduce the burden on working and middle class Americans...

In other words, if hell froze over.

... I could walk out now and buy a leaf, a bolt, prius prime, or i3 before my lunch break is over. ...

I was referring to the 2004 Prius, which got tax breaks when there was a 12-month wait to get the car, and I was referring to my Roadster or the Model S/X for which people paid $75,000 to $150,000, and the Model 3 which will not have enough supply to catch up with demand for a year or two.

If they wanted to promote electric transportation, the way to do it is not to give money to car buyers. The way to do it is to invest in battery technology and make the patents public domain. If government-funded research could cut 10% off the price of batteries it would do more good than all the present tax credits put together.

And I've made it clear many times that I oppose ALL tax breaks. I especially oppose all the subsidies given to the fossil fuel industry, not the least of which is that they don't have to pay for the downstream effects of their pollution. But I call out the people (whether they be EV enthusiasts or oil companies) who can always find reasons why the government should give them money. The government should be spending its money insuring that every citizen has access to quality health care, not making it easier for rich people to buy $50,000 cars.

I'll take all the money they'll give me, but it's just not good government policy.

 

[daniel]

Are you sure that all the people who pay no Federal Income Tax are irresponsible? That's not what DNC says.

Way to twist my words around backwards, McRat! And I don't give a rat's ass (pun not intended) what the DNC or the RNC says. They're both packs of criminals. The RNC are science-denying misogynist criminals. The DNC are just garden-variety criminals.

Anyhow, I said that paying taxes is a responsibility. I didn't say that people who don't have enough money to pay any tax are irresponsible. You, however, are indeed irresponsible for claiming I said something I did not. You have a right to your opinions. You don't have a right to misrepresent other people's opinions.

 

[run-the-joules]

Absolutely untrue. I own some original oil paintings and some prints. The prints only bear a resemblance to the originals. All of the texture is lost and the colors don't snap the way they do on an original. Even a high-quality giclee (which will still be very expensive, maybe 1/3 or 1/4 the cost of the original) is not the same as an original. Not to mention that while prints are available of all the really famous paintings, lesser-known artist's works are not always available as prints.

The painting I was referring to has considerable depth and contour of the paint, all of which would be lost in a print.

I'm also a bit of a savage, it should be noted. I have no appreciation for that level of detail in art, so for me a print loses little if anything. This is a good thing, as far as my savings and discretionary budget are concerned.

 

[Foxhound199]

If they wanted to promote electric transportation, the way to do it is not to give money to car buyers. The way to do it is to invest in battery technology and make the patents public domain. If government-funded research could cut 10% off the price of batteries it would do more good than all the present tax credits put together.

And I've made it clear many times that I oppose ALL tax breaks. I especially oppose all the subsidies given to the fossil fuel industry, not the least of which is that they don't have to pay for the downstream effects of their pollution. But I call out the people (whether they be EV enthusiasts or oil companies) who can always find reasons why the government should give them money. The government should be spending its money insuring that every citizen has access to quality health care, not making it easier for rich people to buy $50,000 cars.

I'll take all the money they'll give me, but it's just not good government policy.

Fine you think there are better ways to incentivize EVs or that you think there are more pressing issues that need funding, but this bill does none of that. Without the credits or something like them, I think the leaf, volt, and bolt all flop. The 3 gets at most half the US preorders. No one joins Tesla in the race to get EV prices down and they remain toys for the rich. The tax credits have been and will continue to work if they aren't killed.

 

[idleuser]

Hmmm if the ev tax credits are gone, 3 of my relatives are going to cancel their deposit. On the flip side, those who are waiting will get faster priority.

One of them said, “it’s not worth getting if the 7500 is going away”

Keep in mind these are middle class income earners between 75,000 - 120,000 per person.

 

[coupedncal]

But the fact is that if Tesla offered a car for the price of a Leaf, it probably wouldn't be that much better than a Leaf. Quality and range both cost money.

Though i mostly agree with your general position, as a current MY17 Leaf owner, I will remind you and other EV enthusiasts the Leaf is one heck of a well engineered car. What it lacks in brand appeal, it more than makes it up with rock solid reliability and amazing efficiency. There is a good reason it sells in numbers that it does and those who picked up the gen 1 Leaf before they switched over to the new gen 2 model know well they got a LOT of a car for frankly not much money even when you take into account the lower 110 mile range.

 

[Need]

Hmmm if the ev tax credits are gone, 3 of my relatives are going to cancel their deposit. On the flip side, those who are waiting will get faster priority.

One of them said, “it’s not worth getting if there 7500 is going away”

Keep in mind these are middle class income earners between 75,000 - 120,000 per person.

Well even if the tax credit stays, Tesla only have about 50,000 cars available next year. They will probably reach that number with just MS and MX sales in about 6 months? Adding in M3.. probably will be gone by April?

 

[idleuser]

Well even if the tax credit stays, Tesla only have about 50,000 cars available next year. They will probably reach that number with just MS and MX sales in about 6 months? Adding in M3.. probably will be gone by April?

It’ll probably end in Q2’18 and further reduced by 1/2 until the funds are exhausted.

 

[Foxhound199]

Well even if the tax credit stays, Tesla only have about 50,000 cars available next year. They will probably reach that number with just MS and MX sales in about 6 months? Adding in M3.. probably will be gone by April?

That's not how the credit works. Once they reach that number, they have the rest of that quarter and the next for full credit, two more of half credit, and two more of 1/4 credit. I like how the phase out is planned, it still gives you 6 quarters of urgent customers until the money is gone, and even at the end your car's price only goes up $1875.

 

[T34ME]

but because it will be a reminder that it's me they're pilfering the money from, not Tesla. If it's their prerogative to hurt hard working taxpayers, so be it.

Always remember that when voting, whether it concerns Tesla or when it affects you personally, rather than the other guy that gets screwed.

 

[Need]

That's not how the credit works. Once they reach that number, they have the rest of that quarter and the next for full credit, two more of half credit, and two more of 1/4 credit. I like how the phase out is planned, it still gives you 6 quarters of urgent customers until the money is gone, and even at the end your car's price only goes up $1875.

Oh yeah I forgot about the phase out.

 

[T34ME]

If we begin from the premise the paying taxes is a responsibility, to fund the government services we demand, then rescinding a tax credit is not "pilfering." In fact, the tax credit is "pilfering" from all the people who pay taxes but cannot afford to buy a new car.

Neither you nor anybody else had a "right" to have your car purchase subsidized to the tune of $7,500 of other people's tax money. Rather, somebody came up with the hare-brained notion that we'd get more EVs on the road if the government subsidized their purchase at a time when demand already exceeds supply. (Same thing happened with the Prius.) If the Republicans do rescind the tax credit, it will be the first intelligent thing they've done since Lincoln freed the slaves.

I DISAGREE with almost everything in your post, I don't know where to begin. Perhaps you did not frame your premise in the manner you wished. But most of all I find offensive comparing repealing the EV tax credit with Lincoln freeing slaves, which is hyperbole in the least and gross insensitivity at the most.

 

[Jason S]

Hmmm if the ev tax credits are gone, 3 of my relatives are going to cancel their deposit. On the flip side, those who are waiting will get faster priority.

One of them said, “it’s not worth getting if the 7500 is going away”

Keep in mind these are middle class income earners between 75,000 - 120,000 per person.

California is expensive, isn't it? Those folks will be losing significant $$ if the state taxes aren't deductible from federal taxes too. Heck, they may all end up paying more in taxes next year.

 

[Jason S]

That's not how the credit works. Once they reach that number, they have the rest of that quarter and the next for full credit, two more of half credit, and two more of 1/4 credit. I like how the phase out is planned, it still gives you 6 quarters of urgent customers until the money is gone, and even at the end your car's price only goes up $1875.

Car's price "goes up" $7500 for first 6 months then $3750 for next 6 then $1875 for next 6. With current projections, if the credit stays in place, those would be the 2nd half of 2018, 1st half of 2019 and 2nd half of 2019 respectively.

If the credit goes away there is a slight possibility of an electoral wave next November where the EV tax credit comes back for 2019 in a different (or maybe just continuing) form. That would be a heck of a thing; the 2018 people all end up paying significantly more out of pocket than the 2019 people.

 

[K-MTG]

Since the sent version passes does that mean the credit stays?

 

[EVie'sDad]

Yes, always. Never ever going to buy another noisy, smelly, greasy gas-guzzling smog-producing moneypit. Electric is here to stay.