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Tax Bill and EV Tax Credit Discussion
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Heck, in this case, no one knows what decision they even made!!!
Perhaps they are in the process of counting the potential votes for the as-is senate bill if it were to go to the house for vote, while beginning the conference process in a parallel effort?
Dr. J
Active Member
I can't seem to figure out how to edit the other post, the correct link should be to this article.
McConnell names Senate GOP tax conferees
McConnell names Senate GOP tax conferees
Here are the conferees:
Senate Republicans. Orrin Hatch (Utah), Mike Enzi (Wyoming), Lisa Murkowski (Alaska), John Cornyn (Texas), John Thune (S.D.), Rob Portman (Ohio), Tim Scott (S.C.) and Pat Toomey (Pa.).
Senate Democrats. Ron Wyden (Oregon), Bernard Sanders (Vermont), Maria Cantwell (Washington), Patty Murray (Washington), Debbie Stabenow (Michigan), Robert Menendez (New Jersey), Tom Carper (Delaware).
House Republicans. Kevin Brady (Texas), Devin Nunes (California), Peter Roskam (Illinois), Diane Black (Tennessee), Kristi Noem (South Dakota), Rob Bishop (Utah), Don Young (Alaska), Greg Walden (Oregon), and John Shimkus (Illinois).
House Democrats. Richard Neal (Massachusetts), Sander Levin (Michigan), Lloyd Doggett (Texas), Raúl Grijalva (Arizona), and Kathy Castor (Florida).
If you know any of these members of Congress or their staff, now is the time to call in your favors.
Meanwhile WSJ editorializes against the credit mentioning that Elon is against it and GM and Ford are in favor:
Killing the Electric Car Credit
Dec. 10, 2017 5:04 p.m. ET
The House and Senate are scrambling to reconcile their tax bills, and one issue is how many loopholes to kill. Here’s one that should be easy: Eliminating the tax credit for electric vehicles.
The House bill nixes the credit for plug-in vehicles, which can run up to $7,500 a car, while the Senate bill preserves the status quo. The credit is essentially an indulgence for affluent Americans who have been buying $70,000 Teslas. But even Tesla CEO Elon Musk now says he’d eliminate the credit as his company begins to roll out its Model 3, which will cost $35,000 for a basic model. The credit is capped at the first 200,000 vehicles that each manufacturer sells, and Tesla may reach its limit for customer tax credits some time next year.
Now other car makers are lobbying to keep the credit as they ramp up electric-car production to meet federal fuel-mileage standards. GM and Ford are among the most vociferous special pleaders. They make most of their money on trucks and SUVs, so they want the government to underwrite their electric car production.
Paying people to buy electric cars is a textbook example of industrial policy that subsidizes some businesses and consumers, loses revenue and complicates the tax code. The plug-in credit doesn’t cost the government too much revenue, but the political symbolism is important. If Republicans are willing to subsidize the purchases of affluent consumers like Leo DiCaprio who want to demonstrate their seeming energy virtue, they’ll subsidize anything.
The overall GOP reform is right in lowering the top tax rate for corporations to 20% in return for eliminating many loopholes. That puts all industries on a more level playing field and should be enough for GM, Ford, and Americans who want to buy electric cars.
Senate Republicans. Orrin Hatch (Utah), Mike Enzi (Wyoming), Lisa Murkowski (Alaska), John Cornyn (Texas), John Thune (S.D.), Rob Portman (Ohio), Tim Scott (S.C.) and Pat Toomey (Pa.).
Senate Democrats. Ron Wyden (Oregon), Bernard Sanders (Vermont), Maria Cantwell (Washington), Patty Murray (Washington), Debbie Stabenow (Michigan), Robert Menendez (New Jersey), Tom Carper (Delaware).
House Republicans. Kevin Brady (Texas), Devin Nunes (California), Peter Roskam (Illinois), Diane Black (Tennessee), Kristi Noem (South Dakota), Rob Bishop (Utah), Don Young (Alaska), Greg Walden (Oregon), and John Shimkus (Illinois).
House Democrats. Richard Neal (Massachusetts), Sander Levin (Michigan), Lloyd Doggett (Texas), Raúl Grijalva (Arizona), and Kathy Castor (Florida).
If you know any of these members of Congress or their staff, now is the time to call in your favors.
Meanwhile WSJ editorializes against the credit mentioning that Elon is against it and GM and Ford are in favor:
Killing the Electric Car Credit
Dec. 10, 2017 5:04 p.m. ET
The House and Senate are scrambling to reconcile their tax bills, and one issue is how many loopholes to kill. Here’s one that should be easy: Eliminating the tax credit for electric vehicles.
The House bill nixes the credit for plug-in vehicles, which can run up to $7,500 a car, while the Senate bill preserves the status quo. The credit is essentially an indulgence for affluent Americans who have been buying $70,000 Teslas. But even Tesla CEO Elon Musk now says he’d eliminate the credit as his company begins to roll out its Model 3, which will cost $35,000 for a basic model. The credit is capped at the first 200,000 vehicles that each manufacturer sells, and Tesla may reach its limit for customer tax credits some time next year.
Now other car makers are lobbying to keep the credit as they ramp up electric-car production to meet federal fuel-mileage standards. GM and Ford are among the most vociferous special pleaders. They make most of their money on trucks and SUVs, so they want the government to underwrite their electric car production.
Paying people to buy electric cars is a textbook example of industrial policy that subsidizes some businesses and consumers, loses revenue and complicates the tax code. The plug-in credit doesn’t cost the government too much revenue, but the political symbolism is important. If Republicans are willing to subsidize the purchases of affluent consumers like Leo DiCaprio who want to demonstrate their seeming energy virtue, they’ll subsidize anything.
The overall GOP reform is right in lowering the top tax rate for corporations to 20% in return for eliminating many loopholes. That puts all industries on a more level playing field and should be enough for GM, Ford, and Americans who want to buy electric cars.
I think the small, but rather important, piece of information they miss about Musk's opinion on the tax credit, is that he wants a carbon tax and the removal of all subsidies.
Foxhound199
Member
I think he is sick of hearing everyone say Tesla exists entirely due to tax payer subsidies. That's not true, but there is equally no doubt that federal credits have been helping level the playing field for Tesla, and are probably a huge part of the reason we saw lines for the Model 3.
JenniferQ
Active Member
WSJ just had an opinion piece on why the tax credit should go away. No mention of all the fossil fuel subsidies of course!
Killing the Electric Car Credit
Killing the Electric Car Credit
That's the article I posted above. Which by the way the whole latter half of my post is from The Wall Street Journal and not me. I should have made that more clear that I was quoting the article. Of course I don't agree with the article at all..
JenniferQ
Active Member
Dr. J
Active Member
This editorial is all about hating the right people--although surely they could have found a less sympathetic figure than DiCaprio to demonize. I also appreciate the non sequitur earlier in the piece: the credit is an indulgence for the affluent, but when more than one car company begins rolling out more affordable EVs, it must be killed.
BTW, I haven't seen anything about Ford advocating to keep the credit; quite the opposite. This is typical WSJ editorial board know-nothingism. You can't keep a simple credit for people cluttering the tax code when you create tons of preferences and loopholes for corporations and pass-through entities.
For those interested (take with a grain of salt):
"SCOOP: Tax credit for electric vehicles, wind energy safe in compromise tax bill, per Republican familiar with negotiations."
Ari Natter on Twitter
"SCOOP: Tax credit for electric vehicles, wind energy safe in compromise tax bill, per Republican familiar with negotiations."
Ari Natter on Twitter
Saw this from Bloomberg: Tax Compromise Keeps Wind and Electric-Car Credits, Source Says
Seeing as we are in California and might get whacked badly on state/fed income tax credit, and that we have a reservation for a M3, this would be welcomed news.
Seeing as we are in California and might get whacked badly on state/fed income tax credit, and that we have a reservation for a M3, this would be welcomed news.
Reciprocity
Active Member
Depends on how much you make. With the much larger standard deduction and better child tax credits, most everyone making under a certain amount, roughly 200k will not need to itemize. For example, I made to much to take the child tax credit, now if you pay any tax, you can offset that with the child tax credits. Certainly high tax states will be worse off then low tax. I am in IL, which is not as bad as NY or CA, but about 10x worse with property taxes which probably makes me one of the only people in the US not getting a tax cut. Well me and all the people who dont pay any Fed taxes anyway. Dont feel to bad for me though, I bought an X and an S and Solar so its about 25k total saved last year and this year.
I could be wrong, and am not a tax accountant or lawyer or anything, but the $7500 tax credit is not a deduction, and I don't think you have to itemize deductions to claim it. There's a separate form (IRS Form 8936) you lodge as an addition to the main form.
If you believe fossil fuel subsidies are so high why are their net profit margins lower than most other industries? It seems they must be passing the savings along to their customers. Even when oil prices were over $100 per barrel the net profit margins for Exxon and Chevron were under 11%. Last year Chevron's net profit margin was negative and Exxon's wasn't much better. Here in California the total gasoline tax is around $.76 per gallon or about 24 % of the cost. Doesn't seem like much of a subsidy.
SageBrush
REJECT Fascism
You do not have anywhere near enough information to reach your conclusions. I suggest staying with the facts, which is simply the subsidy amounts which come in multiple forms:
Direct tax credits and deductions
Externalized costs like pollution
Externalized costs like the military and resource wars
Externalized costs like foreign aid to certain countries to keep petroleum flowing and "friendly" dictators in power
Externalized costs like International terror control
Externalized costs like the flow of Dollars out of the country
Reciprocity
Active Member
Never said it was.. It's a direct tax credit. The holy Grail of tax benefits. If you owe $10,000 or paid $10,000 in Federal taxes from your pay check, you can get $7500 of that back. A deduction only lowers your taxable income, which saves you 12-30% or so of what ever the deduction is. Let's say you have mortgage interest on $10,000. You don't get to take $10,000 of the taxes you pay, you lower your income by $10,000 which saves you more like $1000-3000 in taxes depending on your tax bracket. Solar and EV credits are huge because they directly lower how much tax you pay, but with EV tax credit, you can't carry it over. You must have enough income/taxes owed to offset or you lose the extra. So if you paid or owe $6000 for the year you would owe 0, but you lose the offer $1500. I believe the unused solar credits can be carried over to the next year, but I could be wrong.
Edit: the original response was related to a post about ca and losing state and local deductions where you can deduct what you pay on state and local taxes from your fed return. Again, not a tax credit but a simple deduction. That is going away, it's gone. A big Fu to high tax blue states. The child tax credit is a tax credit and now more accessable because anyone who pays taxes can yet it where before you could only use it if you didn't make much money and the credit is larger. This is a big Fu to people without children and don't pay taxes anyway.
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SageBrush
REJECT Fascism
This is correct, but there is more to it. It is a bigger Fu to every affluent state with a high cost of living since taxes paid are a function of taxable income * rate. That loud sucking sound you hear is more money flowing from the affluent to the poor states.
Irony, no ? Don't worry though, the truly rich are protected. The middle class will pay the bill. I wonder if Trump and his army of despicables and losers will succeed in trashing the technological powerhouses that have been the backbone of those states' affluence.
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