Tesla EV Tax Credits coming back?

[mwdietertg]

The Ways and Means CBO score is out


Increases in Direct Spending:

Part 4. Greening the Fleet and Alternative Vehicles		$ (in Millions)		2022	2023	2024	2025	2026	2027	2028	2029	2030	2031	2022-2026	2022-2031
Sec.	136401.	Refundable New Qualified Plug-In Electric Drive Motor Vehicle Credit for Individualsc
		Budget Authority		55	62	70	82	98	117	130	145	159	159	367​	1,077​
		Estimated Outlays		55	62	70	82	98	117	130	145	159	159	367​	1,077​

Increase or Decrease (-) in Revenue:

Part 4. Greening the Fleet and Alternative Vehicles		$ (in Millions)		2022	2023	2024	2025	2026	2027	2028	2029	2030	2031	2022-2026	2022-2031
Sec.	136401.	Refundable New Qualified Plug-In Electric Drive Motor Vehicle Credit for Individualsc		-41	-432	-506	-627	-734	-884	-1,041	-1,159	-1,288	-1,400	-2,342​	-8,115​
Sec.	136402.	Credit for Previously-Owned Qualified Plug-In Electric Drive Motor Vehicles		-33	-104	-119	-150	-166	-183	-202	-224	-247	-269	-572​	-1,696​
Sec.	136403.	Qualified Commercial Electric Vehicles		-79	-171	-235	-303	-396	-516	-624	-717	-808	-914	-1,184​	-4,762​
Sec.	136404.	Qualified Fuel Cell Motor Vehicles		-4	-7	-8	-9	-11	-4	0	0	0	0	-40​	-44​

 

[Corndart]

Thanks for the link! Am I reading it right that out of $1.199B analyzed so far, $1.164B (97% of it) will add to the deficit? That is not very encouraging for finding moderate support, especially since this has been touted as "paid for" with tax changes. :/

Not exactly.

"Budget Authority" are the costs they estimated when formulating the bill, "Deficit Impact" are the new CBO more refined estimate of the actual cost. All of the "sections" they've scored thus far have come in *under* the initial rough estimates near as I can tell.

They still haven't calculated the revenue side not tied directly to the "sections" they've scored.

Look at the bottom section of this to get an idea of that 2.2t total revenue that will offsite the spending in the top half:

What's in the House's Build Back Better Act? | Committee for a Responsible Federal Budget

2021-11-08-We have published an full estimate of the House's Build Back Better Act based on CBO's scores of the bill he

www.crfb.org

They also stated (CBO) they'll be done tonight. Assuming the numbers come in and appease the moderates, this gets passed in the House and moves on. Again as others have noted it's still not a done deal til the Senate passes, and they could still make changes.

It's also worth noting a lot of the concern has been not over the 2022-26 costs, but over the next 10 years. You'll see they gave those projections in two chunks, and again so far the CBO scores suggest there shouldn't be new concerns / issues with those numbers previously estimated. It's still only halfway scored though, it could change quickly.

 

[mmatlock]

Not exactly.

"Budget Authority" are the costs they estimated when formulating the bill, "Deficit Impact" are the new CBO more refined estimate of the actual cost. All of the "sections" they've scored thus far have come in *under* the initial rough estimates near as I can tell.

They still haven't calculated the revenue side not tied directly to the "sections" they've scored.

Look at the bottom section of this to get an idea of that 2.2t total revenue that will offsite the spending in the top half:

What's in the House's Build Back Better Act? | Committee for a Responsible Federal Budget

2021-11-08-We have published an full estimate of the House's Build Back Better Act based on CBO's scores of the bill he

www.crfb.org

They also stated (CBO) they'll be done tonight. Assuming the numbers come in and appease the moderates, this gets passed in the House and moves on. Again as others have noted it's still not a done deal til the Senate passes, and they could still make changes.

It's also worth noting a lot of the concern has been not over the 2022-26 costs, but over the next 10 years. You'll see they gave those projections in two chunks, and again so far the CBO scores suggest there shouldn't be new concerns / issues with those numbers previously estimated. It's still only halfway scored though, it could change quickly.

Hopefully the CBO meets their stated completion timeline and we see some progress tonight.

 

[Corndart]

Hopefully the CBO meets their stated completion timeline and we see some progress tonight.

They blogged that they'll be done today, a day earlier than previously expected.

 

[rishid]

It has been announced vote will be happening tonight. Probably around 8:00pm.

 

[mjatx]

So, the final score was a net deficit increase of $367B excluding tax enforcements. They did estimate that the IRS enforcements would bring in an additional $127B. Meaning the total deficit increase would be about $240B. Dems seem to be ok with the difference being in the IRS enforcement amount that the White House estimated to be considerably higher.

If anyone rationally looked at the 8.1B for new vehicle EV tax credits they would realize that estimate is way too low.

8,115,000,000 estimate / 8,000 per vehicle credit = 1,014,375 vehicles over 10 years

I guess it is good in terms of inclusion in the bill, but it is going to go way over budget.

 

[Bosco33]

So they're moving forward with the vote on the bill as-is because moderate democrats wanted to confirm it was deficit neutral. CBO confirms it's not with $367B in deficit spending. So... how's the vote going to go?

 

[Corndart]

So they're moving forward with the vote on the bill as-is because moderate democrats wanted to confirm it was deficit neutral. CBO confirms it's not with $367B in deficit spending. So... how's the vote going to go?

There is another $207b in unscored revenue associated with IRS collections that would bring the deficit to ~$160b.

 

[ElectricIAC]

There is another $207b in unscored revenue associated with IRS collections that would bring the deficit to ~$160b.

What’s that thing about counting chickens that haven’t hatched?

 

[Corndart]

What’s that thing about counting chickens that haven’t hatched?

That's pretty much every revenue projection in the scoring exercise, isn't it? ;-)

 

[ElectricIAC]

That's pretty much every revenue projection in the scoring exercise, isn't it? ;-)

One bird strike away from losing our last engine and they’re squabbling about the window shades.

 

[PineNut]

There is another $207b in unscored revenue associated with IRS collections that would bring the deficit to ~$160b.

I wonder if this $207b is related to the last minute inclusion of raising the SALT tax deduction from $10K max to $80K max?

The House is expected to vote this week on President Joe Biden's Build Back Better legislation. The social spending bill includes investments in clean energy and affordable child care - but it also includes a $285 billion tax cut that would almost exclusively benefit high-income households over the next five years.

The measure would allow households to increase their deduction from state and local taxes from $10,000 to $80,000 through 2026, and then impose a new deduction cap through 2031. It's the second-most expensive item in the legislation over the next five years, more costly than establishing a paid family and medical leave program, and nearly twice as expensive as funding home-medical services for the elderly and disabled, according to an analysis by the Committee for a Responsible Federal Budget.

SALT Tax deduction increase

 

[Corndart]

I wonder if this $207b is related to the last minute inclusion of raising the SALT tax deduction from $10K max to $80K max?



SALT Tax deduction increase

Nope, unrelated, the 207b is going after tax cheats basically.

 

[cusetownusa]

I wonder if this $207b is related to the last minute inclusion of raising the SALT tax deduction from $10K max to $80K max?



SALT Tax deduction increase

Raising the SALT tax cap will lower tax revenue by giving the “rich” more tax deductions. Unless that is what you are implying.

 

[PineNut]

Raising the SALT tax cap will lower tax revenue by giving the “rich” more tax deductions. Unless that is what you are implying.

I agree raising the SALT cap within the BBB bill will lower tax revenue. If tax revenue is lower, then couldn't that make the BBB bill under funded? I don't know if this late change has been reviewed by the CBO yet. The article stated this change to SALT would reduce revenue by $285 billion.

I'll disagree with the article that the SALT change "almost exclusively" helps high-income earners, but the article didn't define the term "high-income earner". I think it would affect a lot of middle income earners in a state like NJ where they have huge property taxes which is part of SALT.

My question was if this late change to the SALT deduction were not included in the BBB bill, then would the CBO have found the bill revenue neutral?

 

[cusetownusa]

I agree raising the SALT cap within the BBB bill will lower tax revenue. If tax revenue is lower, then couldn't that make the BBB bill under funded? I don't know if this late change has been reviewed by the CBO yet. The article stated this change to SALT would reduce revenue by $285 billion.

I'll disagree with the article that the SALT change "almost exclusively" helps high-income earners, but the article didn't define the term "high-income earner". I think it would affect a lot of middle income earners in a state like NJ where they have huge property taxes which is part of SALT.

My question was if this late change to the SALT deduction were not included in the BBB bill, then would the CBO have found the bill revenue neutral?

Gotcha. Misunderstood the post.

 

[Corndart]

I agree raising the SALT cap within the BBB bill will lower tax revenue. If tax revenue is lower, then couldn't that make the BBB bill under funded? I don't know if this late change has been reviewed by the CBO yet. The article stated this change to SALT would reduce revenue by $285 billion.

I'll disagree with the article that the SALT change "almost exclusively" helps high-income earners, but the article didn't define the term "high-income earner". I think it would affect a lot of middle income earners in a state like NJ where they have huge property taxes which is part of SALT.

My question was if this late change to the SALT deduction were not included in the BBB bill, then would the CBO have found the bill revenue neutral?

We're wandering far afield from the EV credits here but the SALT deduction is and has been a line item in BBB for quite some time and is accounted for in the scoring. The only thing that wasn't accounted for is the IRS revenue component. It wasn't a "late change" afaik but yes striking it would make the bill revenue neutral. There certainly may be some things negotiated out to make it neutral but the way I read how the next steps and procedural move to reconciliation works is that it time boxes this sort of discussion and debate and avoids another endless series of negotiations to ratify.

Source - Reconciliation 101

 

[PineNut]

We're wandering far afield from the EV credits here but the SALT deduction is and has been a line item in BBB for quite some time and is accounted for in the scoring. The only thing that wasn't accounted for is the IRS revenue component. It wasn't a "late change" afaik but yes striking it would make the bill revenue neutral. There certainly may be some things negotiated out to make it neutral but the way I read how the next steps and procedural move to reconciliation works is that it time boxes this sort of discussion and debate and avoids another endless series of negotiations to ratify.

Source - Reconciliation 101

Yep, agree we are moving more off-topic, but I think this is the best 2022 EV tax credit thread I've seen anywhere. Lots of detailed info (not for everyone, though) and I like all the latest fast-changing updates!

Hate to bring up SALT again, but I don't see it was added to BBB until Nov 3rd (starting on page 1729), and I think it was changed even more recently. The Nov 3rd version changes it to about $72K instead of the more recent $80K and it only talked about married filing separate which makes no sense to me.

Sorry, back to the EV credit now. It sure would be great if a Tesla could get a full $12,500 tax credit, but I'm still concentrating on the $8K credit in the Nov 3rd revision. It would be nice, IMO, if EVs not made in the US would eventually get excluded. Fingers still crossed...

 

[Corndart]

Yep, agree we are moving more off-topic, but I think this is the best 2022 EV tax credit thread I've seen anywhere. Lots of detailed info (not for everyone, though) and I like all the latest fast-changing updates!

Hate to bring up SALT again, but I don't see it was added to BBB until Nov 3rd (starting on page 1729), and I think it was changed even more recently. The Nov 3rd version changes it to about $72K instead of the more recent $80K and it only talked about married filing separate which makes no sense to me.

Sorry, back to the EV credit now. It sure would be great if a Tesla could get a full $12,500 tax credit, but I'm still concentrating on the $8K credit in the Nov 3rd revision. It would be nice, IMO, if EVs not made in the US would eventually get excluded. Fingers still crossed...

Yep you're right about SALT, it was added back in late in the process, I was incorrect.

 

[nate704]

My prediction
1. The BBB bill passes
2. People get EV tax credit
3. Other people get what they want from this bill.
4. People are happy for a while
5. Our economy tanks even deeper and destroy middle class
6. Government blames on COVID-Z variant
7. More free money to people
8. And repeat.