Tax Bill and EV Tax Credit Discussion

[TaoJones]

Will *anyone* get the $25K model 3 ?
Tesla Model 3 can now officially cost only ~$25,000 in California after incentives

Tax credit goes away just as Tesla makes the $35K (not $49K) Model 3 available?

Sure - in about 2.5 years, there should be a handful or more of gently-used Model 3s in that price range .

And if there’s any justice in this world and the tax credit survives to live on in 2018, then it’ll be just 0.5 years until that $25K M3.

Except of course for pesky things like doc/dest fees, sales tax and/or other costs of acquisition.

I’m sure *somebody* from a sales tax-free State will order a strippie just to say they did.

What would be interesting is getting a little more than a strippie *as an inventory/showroom car* for that $25K. Less if in CO maybe.

Back to the original point - in 2-3 years when *both* M3s and MSs will be available for $25K as CPOs or similar, that monthly payment is going to make a *lot* of sense to pretty much everybody with even a moderate commute (the monthly payment being at par or better than the cost of gas, oil, and net amortized routine maintenance).

 

[bhzmark]

The bill passed by Senate in the wee hours on Dec 2 has been cobbled together and typed up and published at https://www.finance.senate.gov/imo/media/doc/12.2.17 HR 1.PDF

It does NOT include any repeal of IRC 30D -- the EV tax credit provision so it was retained in the Senate bill.

The members of congress to contact are:

GOP Reps. Kevin Brady of Texas, Devin Nunes of California, Peter Roskam of Illinois, Diane Black of Tennessee, Kristi Noem of South Dakota, Rob Bishop of Utah, Don Young of Alaska, Greg Walden of Oregon and John Shimkus of Illinois.


Democratic Reps. Richard Neal of Massachusetts, Sander Levin of Michigan, Lloyd Doggett of Texas, Raúl Grijalva of Arizona and Kathy Castor of Florida.

These are the members in reconciliation conference committee. The Senators in the committee are still to come.

 

[Foxhound199]

The bill passed by Senate in the wee hours on Dec 2 has been cobbled together and typed up and published at https://www.finance.senate.gov/imo/media/doc/12.2.17 HR 1.PDF

It does NOT include any repeal of IRC 30D -- the EV tax credit provision so it was retained in the Senate bill.

The members of congress to contact are:

GOP Reps. Kevin Brady of Texas, Devin Nunes of California, Peter Roskam of Illinois, Diane Black of Tennessee, Kristi Noem of South Dakota, Rob Bishop of Utah, Don Young of Alaska, Greg Walden of Oregon and John Shimkus of Illinois.


Democratic Reps. Richard Neal of Massachusetts, Sander Levin of Michigan, Lloyd Doggett of Texas, Raúl Grijalva of Arizona and Kathy Castor of Florida.

These are the members in reconciliation conference committee. The Senators in the committee are still to come.

Ah man, we have to rely on frickin' Nunes to represent his state's interests? Not looking good...

 

[206er]

Given how inept most people are on the subject (the threads upon threads upon threads upon threads of people not understanding how a basic damned tax credit works, for example), I have no doubt that people are going to go completely berserk and it'll be everyone's fault but their own.

Well, most of the onus is definitely on people to make informed decisions, but it does not help that Tesla, GM, and Nissan all currently market their car pricing to include federal and state tax incentives. Just look at the pricing details on Tesla's site, or any GM/Nissan dealer site - the federal credit is presented as part of or right next to the car price.

Again, I stood in line for hours early on a cold 3/31/2016 morning thinking that doing so would almost guarantee that I'd be able to snag a Tesla for the price of a decently optioned Civic. I had no clue about how much of a disaster the Model X roll out was, nor that likely production delays with the 3 could allow for a fully republican-controlled government to ax the tax credit before I had a chance to purchase the car in 2018. Heck, before I reserved and began learning more about Tesla and "Elon time", I naively thought that Model 3s would be available shortly after the first reveal. Ah, life was so much easier back in 2016... Obama was in office, clean energy development was celebrated, and nazis were forced to hide under rocks instead of holding public demonstrations in the middle of cities.

 

[206er]

Cannot fathom how GM, Ford, Nissan, and other companies that manufacture electric cars are not hounding the representatives from states with their manufacturing presence. This loss hurts them far more than Tesla.

A bolt with guaranteed 7500 tax credit is in play against a base model 3 without.
A bolt without has no shot, or a greatly reduced chance.
Same goes for Leaf and other similar cars.

Hmm... if electric cars become less feasible to purchase and own, who wins? Big oil and all who peddle to and benefit from it.

 

[Merrill]

We as a country should be the leader in the green sector, just look at what China is doing. If we do not get our butts in gear we could be the most polluting country in the world.

 

[K-MTG]

I would have voted if I knew trump was gonna take away my $7500....but Cali is democratic anyways. Who knew a different president would cost me $7500....

 

[bro1999]

So what are the odds of the fed tax credit surviving the process of turning the House/Senate bills into 1? I'm curious if the GOP senators in Georgia (home of the Nissan Leaf factory) or Tennessee (home of VW's future EV factory) would support the final bill if the EV credit is axed.

 

[bhzmark]

what are the odds of the fed tax credit surviving the process of turning the House/Senate bills into 1?

I think slightly in favor since Senate was more recent bill and Senate is harder to please with close vote margin. Someone in the Senate specifically took it out of their substitute bill and didn't allow flake's amendment putting it back to see a vote. So that suggests the EV credit has some friends amongst the Rs in the Senate. But still significant risk of being repealed.

curious if the GOP senators in Georgia (home of the Nissan Leaf factory) or Tennessee (home of VW's future EV factory) would support the final bill if the EV credit is axed

Good point. constituents should contact them and let them know.

 

[ohmman]

If there were plans to replace the tax credit with a better structured incentive, I'd be fine with eliminating it. I don't think it's well structured as it is, since it does in fact benefit those who pay more taxes (read: wealthier) and provides less benefit to those without a great tax liability.

Of course, I'm of the mind that there should be no incentive to purchasing an EV - there should instead be appropriate costs placed upon all energy sources. That will more effectively align the financial incentives with the true societal costs of each type of vehicle, and EVs would become instantly more attractive from that standpoint.

Side note: I moved this thread into Energy, Environment, and Policy instead of Model 3 as it seems more appropriate. And I'm not a moderator here.

 

[206er]

Who knew a different president would cost me $7500....

Um... I did.

 

[run-the-joules]

So what are the odds of the fed tax credit surviving the process of turning the House/Senate bills into 1? I'm curious if the GOP senators in Georgia (home of the Nissan Leaf factory) or Tennessee (home of VW's future EV factory) would support the final bill if the EV credit is axed.

Pretty small odds, I'd say. I'll be fairly surprised if it survives, to be honest, and a small bit of me will be disappointed if it does.

 

[Dr. J]

The bill passed by Senate in the wee hours on Dec 2 has been cobbled together and typed up and published at https://www.finance.senate.gov/imo/media/doc/12.2.17 HR 1.PDF

It does NOT include any repeal of IRC 30D -- the EV tax credit provision so it was retained in the Senate bill.

The members of congress to contact are:

GOP Reps. Kevin Brady of Texas, Devin Nunes of California, Peter Roskam of Illinois, Diane Black of Tennessee, Kristi Noem of South Dakota, Rob Bishop of Utah, Don Young of Alaska, Greg Walden of Oregon and John Shimkus of Illinois.


Democratic Reps. Richard Neal of Massachusetts, Sander Levin of Michigan, Lloyd Doggett of Texas, Raúl Grijalva of Arizona and Kathy Castor of Florida.

These are the members in reconciliation conference committee. The Senators in the committee are still to come.

May seem counter-intuitive, but I think the Democrats on this (House) list are far more important to the EV tax credit than the Republicans.

Let's assume the conference committee makes decisions on each point of contention (differences b/w the two bills) by majority vote (I have no idea if this is true, but it's not a terrible working hypothesis). The House Republicans are essentially representing the House bill, and the Senate Republicans are representing the Senate bill (note: no Democrat in either chamber voted for their chamber's version of the bill). On any point of difference, the committee Democrats represent the swing vote, if they are at all united. The EV credit is probably the single point of difference between the two bills where this unity among Democrats is most likely. (If that's not obvious, I can explain.)

Of course, maybe the Republicans from the House and Senate meet in a conference room and don't tell the Democrats about the meeting. I don't know how they do business, but since this conference committee process represents "regular order," they've probably all forgotten how it works anyway.

A useful strategy might be to contact Democrats on the list that you have some passing connection to (the Rep. is from your state, a neighboring state, whatever) and encourage their support of the Senate's viewpoint on this particular issue. There are many reasons, as amply discussed here, but an important one is: taxpayers made plans, automakers made plans, the plug-in vehicle credit already has a phase-out schedule, and the cost to the Treasury is insignificant in the scheme of this bill. And it promotes clean air, etc.

 

[Mordoch]

I would note that in particular, while the factory is not actually in her district, Diane Black's (R) Tennessee district is close enough that voters' jobs in her district are dependent on that Nissan plant which builds Nissan Leafs. If anyone is in her district (or you even know someone who is who would be willing to call the Congressman's office to express his/her concerns noting this issue in particular, this certainly could potentially be productive.)

While you can never rule out anything and it would not hurt to contact them, I would not overrate the likely impact of Democrats on the committee. In practice, key negotiations are going to happen outside of committee meetings as Republicans try to make sure there will be enough votes to actually pass the bill. (It is not going to be all about outright committee votes on particular issues.) This means even if Republican Dean Heller of Nevada for instance is not on the committee, he can still have a big impact by threatening to vote against the final bill if the electric vehicle tax credit repeal is in it.

 

[SlicedBr3ad]

I'm really torn. As a future m3 owner, I want the tax credit which will benefit me. But as Tesla stockholder, I want the tax credit gone because that will help Tesla and it's stock. It will help stock because without tax credit, competition will be losing money even more on every car they sell.

However, if the credit goes away, the biggest loser is environment and all us living on this planet as I anticipate it will allow other companies to rethink their initial plans to enter electric vehicle market. let's keep the credit!

 

[bhzmark]

The EV credit is probably the single point of difference between the two bills where this unity among Democrats is most likely. (If that's not obvious, I can explain.)

Do explain. I would have thought the repeal of the individual health insurance mandate in the Senate bill that was not present in the house bill was the biggest difference where the Democrats were united on not including the repeal of the individual mandate.

I suspect the Republicans will not be disagreeing too much but will just search for common ground that the Republican leadership in both the house and the Senate can support. That's what the Republican majority in the conference committee will report out.

I don't think they will allow Democrats to settle the differences between the Republicans. But the Democrats will technically be in the room and will technically if not substantively have a voice and can express their views.

 

[T34ME]

The EV credit is probably the single point of difference between the two bills.

I disagree. Repeal of the EV tax credit is small potatoes compared to repeal of the individual health mandate and repeal of the SALT deductions. This is where the battlefield will be. There are demonstrations all over the US today with regards to these two repeals. How many demonstrations about repeal of the EV tax credit? NADA! Big oil and US legacy automakers want this tax credit axed. They are the ones with lobbyist money!

 

[Dr. J]

@bhzmark and @T34ME: OK, OK, you got me there!

 

[Chris P]

Hopeful sign - I am currently attending a tax conference and according to one of the speakers the current word is that reconciliation between the House and Senate versions may not be a reconciliation at all but rather a full adoption of the Senate version.

 

[Dr. J]

Hopeful sign - I am currently attending a tax conference and according to one of the speakers the current word is that reconciliation between the House and Seante versions may not be a reconciliation at all but rather a full adoption of the Senate version.

Interesting, but they don't have to go to conference committee to achieve that: the House could adopt the Senate version now and be done with it. I bet they at least correct the corporate AMT oversight in the Senate version: the fact that the corporate alternative minimum rate is the same as the top corporate tax rate of 20%.