I think it's ideological. Some people don't like the idea of government influencing economy and therefore don't like to think of themselves as being influenced by government policy. So they view the tax policy of the EV tax credit as "keeping my money" vs. tax, energy, economic, national security government policy.
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Tax credit ≠ subsidy
- Thread starter Swampgator
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I think it's ideological. Some people don't like the idea of government influencing economy and therefore don't like to think of themselves as being influenced by government policy. So they view the tax policy of the EV tax credit as "keeping my money" vs. tax, energy, economic, national security government policy.
JeffK
Well-Known Member
The argument stems from some people calling tax incentives 'gov't handouts' as if they are food stamps or something. Whereas if we didn't work the gov't wouldn't get the 7500 anyway, just as Nevada wouldn't get anything is Tesla didn't have the gigafactory in that state.
The tax incentives are really an exchange for other benefits such as the portion of the gigafactory workforce who are Nevada residents who will make money, pay income tax, and likely spend their money in Nevada.
Likewise, more EVs on the road have considerable benefit for our future.
The tax incentives are really an exchange for other benefits such as the portion of the gigafactory workforce who are Nevada residents who will make money, pay income tax, and likely spend their money in Nevada.
Likewise, more EVs on the road have considerable benefit for our future.
Tax credits are just like food stamps. We call them "hand outs" when poor people get them, we call them "tax incentives" when oil companies get them. Food stamps are actually a subsidy for US ag business run by Ag. Dept and one of many tax subsides we use as agriculture policy just as the EV tax subsidy is part of energy, environmental, economic and national security policy.
jelloslug
Active Member
Since that's not how it works, that irrelevant. The facts are that if I buy an EV I get to keep more of the money I earned, end of story.
jelloslug
Active Member
How is someone getting to keep the money they earned the same as giving someone money for free?
They are getting tax dollars they would normally owe. That is why it is correctly called a TAX credit. It is, in every sense, a spending of tax dollars by the taxpayer on something that is deemed in the national interest, a good use of tax dollars. Same as farm subsidies where we give money to farmers (ag susidies) or to those consuming ag products (food stamps). It's all use of tax dollars for actions we deem in national interest. There's no such thing as "free money". Those receiving, farmers for example, receive it for specific actions they must take and have regs to obey. The money has to be paid for by taxation.
It's all good. Taxes are the price of civilization and we are represented in government that does the taxing.
To this point, the $7,500 we hope to receive for purchasing T3's is paid for by tax dollars. I would like to see the amount increased and applied to all zero pollution vehicles with no production limit until we achieve our purpose, replacing all ICE cars and light trucks, eliminating oil imports, cutting green house gases, reducing our oil related military budget (about $600B a year), eliminating US military operations in Middle East that spawn terrorism as we support extremist religious or military dictatorships in exchange for oil.
Since it is a political decision in a presidential year, we have an opportunity to vote for the EV tax credit or against it in Federal elections.
jelloslug
Active Member
It's still not the same thing. Subsidies happen after the taxes are collected and then they are doled out of a budget. The money I get to keep is never in a budget to begin with because it was never "theirs" at all. Furthermore, if it were like a subsidy, you would be able to collect it all regardless of your tax liability which is not the case with this credit.
The EV $7,500 tax credit is a subsidy. We are taking money that was paid in taxes and returning it to people or corporations to spend on a very specific purpose. In the case of tax credits, you must owe the money in taxes in order to get the money returned to you or deduct it from your tax bill if it is not deducted during the year. You have to owe the tax in order to get a credit for taxes paid or owed.
We do this to subsidize a particular action, in this case to purchase an EV which has many benefits for US.
It sounds like you don't want to be known as someone getting tax dollars that others will have to make up...you are. It's OK. We've all voted on it and have approved it.
jelloslug
Active Member
Having a tax liability is not the same thing as tax revenue that is already collected. Look at your tax liability before your personal exemptions, that is not revenue that has to be replaced.
It is indeed revenue that must be replaced, tax deductions, tax credits are all part of taxes. We subsidize parents, home mortgages, charities, oil companies, farms and EV buyers with tax dollars. They are all ways of spending tax dollars on things we deem important or worthwhile.
ucmndd
Well-Known Member
It's a financial incentive provided by a government to stimulate a market. Of course it's a subsidy. Why all the mental acrobatics to make you feel better about taking one?
To make one feel better about getting tax money from the government otherwise...one would be as bad as...as....all those "government welfare queens".
116,099 plug in EV's were sold in the US in 2015. A paltry number. While all did not get the full $7,500, using that number the government subsidy for EV's would be $800M dollars. Increasing that number to 11 million (80% of cars light trucks sold in 2015) and increasing the government tax subsidy to $10,000 per vehicle would cost $110B. That would be enough to cut US oil imports by 50%, eliminate $400B a year in oil import trade deficit and enable US to reduce oil related military spending by $600B. An investment of $110B for gain of $1T is a good investment of US tax dollars.
On top of the $1T in cost reductions to US, a huge economic stimulus, we would cut greenhouse gas emissions by close to 30% toward the goal of 80% reduction by 2050 set forth by our climate scientists to mitigate global warming which has huge costs associated with it.
Added to that would be the millions of jobs and increased tax revenues from worker and corporate income taxes and in 21st century technology and jobs.
A good investment of $110B in tax payer dollars to help make that happen. Now where to get those tax dollars to incentivize the EV purchases? The $150B per year we spend on overseas military bases would be a logical choice. We don't need them and elimination of oil imports cuts US military costs.
Fun part for us, Tesla 3 buyers, is we are doing our part, pushing EV sales to 500,000 a year in 2018 and getting a great car made in US.
I see the tax credit is simply an incentive to go with a newer technology that may need a push for some people to jump into. Of coarse you need to have an income and pay taxes to take advantage of it or it doesn't do you much good.
I don't think the credit is the only reason 500,000 placed deposits on a M3 though. I took a 7.5k credit on our Leaf purchase a few years ago and don't expect I'll see one this time around- the previous incentive got me to try the technology and get comfortable with it before upping the bet on a more expensive vehicle in all likelihood.
This is much different than a handout that some folks get, so I agree with Swampgator on his thoughts.
I don't think the credit is the only reason 500,000 placed deposits on a M3 though. I took a 7.5k credit on our Leaf purchase a few years ago and don't expect I'll see one this time around- the previous incentive got me to try the technology and get comfortable with it before upping the bet on a more expensive vehicle in all likelihood.
This is much different than a handout that some folks get, so I agree with Swampgator on his thoughts.
ccutrer
Active Member
I just want to clarify how tax credits work in federal budgeting. Sure the government can't spend the tax revenue that they never collect (except when they do 
), but when they create the tax credit you better believe they're budgeting for less tax revenue, and have a cost associated with the credit. This also doesn't mean that the government has to collect $7,500 in tax from someone else. It's not like they're gonna go to my neighbor and say "tough luck bud; your neighbor bought an EV so we're going to assess you an extra $7,500 in your taxes this year." It's all part of the budget. They're already expecting ahead of time to not get that tax revenue. And either they're assuming they're "spending" that tax revenue for this specific societal benefit, or they have raised taxes elsewhere somehow, or they're just planning on using debt spending to keep other services.
), but when they create the tax credit you better believe they're budgeting for less tax revenue, and have a cost associated with the credit. This also doesn't mean that the government has to collect $7,500 in tax from someone else. It's not like they're gonna go to my neighbor and say "tough luck bud; your neighbor bought an EV so we're going to assess you an extra $7,500 in your taxes this year." It's all part of the budget. They're already expecting ahead of time to not get that tax revenue. And either they're assuming they're "spending" that tax revenue for this specific societal benefit, or they have raised taxes elsewhere somehow, or they're just planning on using debt spending to keep other services.In zero based budgeting, they indeed do have to come up with more revenue to pay for the tax credit given out. They could cut spending elsewhere, raise taxes or borrow it but someone has to pay the $7.500 loss in tax revenue. Other taxpayers, are paying for our $7,500. We are EV "welfare queens", no doubt about it.
Eagles,
I'm not sure what your income is, but I can guarantee you I have NEVER voted to pay $35,000 in tax per year. I'll bet if you excluded the 49% of Americans who pay ZERO income tax and let the rest of us vote, you would see some changes happen in short order.
I also hate the phrase that "Taxes are the price of civilization" That is such a load of crap, and the same thing tyrants have been telling the sheeple since the days of Rome (and before)
100% of the money I earn belongs to me. Period, end of story. The government takes what they want from me and I either choose to comply, or I'm put in a cage.
Democracy is nothing more than mob rule, where 51% of the people may take away the rights of the other 49% (TJ)
Now that this has gone political I think it's probably time to retire this thread
I'm not sure what your income is, but I can guarantee you I have NEVER voted to pay $35,000 in tax per year. I'll bet if you excluded the 49% of Americans who pay ZERO income tax and let the rest of us vote, you would see some changes happen in short order.
I also hate the phrase that "Taxes are the price of civilization" That is such a load of crap, and the same thing tyrants have been telling the sheeple since the days of Rome (and before)
100% of the money I earn belongs to me. Period, end of story. The government takes what they want from me and I either choose to comply, or I'm put in a cage.
Democracy is nothing more than mob rule, where 51% of the people may take away the rights of the other 49% (TJ)
Now that this has gone political I think it's probably time to retire this thread
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