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(CBS News)   Tax credit on EVs gets serious changes - will be fully refundable, meaning middle-class people finally qualify for the entire amount   (cbsnews.com) divider line
    More: Spiffy, Plug-in hybrid, Electric vehicle, income tax credit, substantial tax breaks, electric vehicles, EV owners, Automobile, plug-in hybrid vehicles  
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848 clicks; posted to Business » on 18 Nov 2021 at 12:08 PM (26 weeks ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook



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2021-11-18 11:40:54 AM  
Once it passes I will go look at a hybrid Jeep if it gets $12.5 rebate.
 
2021-11-18 12:08:38 PM  
Notably, the credit can also be claimed by car dealers on taxpayers' behalf, allowing car sellers to build the tax break into their sticker prices. And it's refundable, meaning that taxpayers can qualify for it even if they have no tax liability - an improvement on current tax incentives for green cars.

So what's stopping the dealer from saying that the EV costs x more and the sticker price stays the same?
 
2021-11-18 12:21:14 PM  
Oh thank god. That's just what car companies needed. More welfare.
 
2021-11-18 12:22:20 PM  
hyundai you jerks I want to buy this like yesterday. start cranking them out!

https://www.theverge.com/2021/11/15/22783810/hyundai-grandeur-heritge-concept-ev-80s
 
2021-11-18 12:28:07 PM  
Serious tax credit on a Zero SR electric motorcycle?  We'll see, but got my attention anyway.
 
2021-11-18 12:30:43 PM  

Merltech: Notably, the credit can also be claimed by car dealers on taxpayers' behalf, allowing car sellers to build the tax break into their sticker prices. And it's refundable, meaning that taxpayers can qualify for it even if they have no tax liability - an improvement on current tax incentives for green cars.

So what's stopping the dealer from saying that the EV costs x more and the sticker price stays the same?



Normally, it's competition with other dealers.

Now?  Nothing at all.  They're already marking everything up to the moon.  Won't stop until after the supply shortage is resolved (logistics and chip).
 
2021-11-18 12:38:52 PM  
When the Chevy Volt (not the Bolt EV) first came out, there was a number of less-than-honest car dealers who titled the cars to the dealership, took the tax credit, and then sold the cars as "used" to second owners.
 
2021-11-18 12:39:19 PM  

ElwoodCuse: hyundai you jerks I want to buy this like yesterday. start cranking them out!

https://www.theverge.com/2021/11/15/22783810/hyundai-grandeur-heritge-concept-ev-80s


The nixie tube gauges are farking gorgeous.
 
2021-11-18 12:39:26 PM  
well, I guess, especially when buying cars during an absurdly seller's market.

good luck finding what you want.
 
2021-11-18 12:45:16 PM  

ElwoodCuse: hyundai you jerks I want to buy this like yesterday. start cranking them out!

https://www.theverge.com/2021/11/15/22783810/hyundai-grandeur-heritge-concept-ev-80s


I gasped out loud. That car is amazing.
 
2021-11-18 12:45:48 PM  

NewportBarGuy: Oh thank god. That's just what car companies needed. More welfare.


We give outrageous tax-subsidized welfare to oil companies and it's to the detriment of ourselves. This shifts it to being somewhat better for the environment.
 
2021-11-18 12:50:34 PM  
So, leaving the poor and most the middle class to NOT have subsidized vehicles, continue to pay high fuel costs, and continue to be the only ones paying an effective usage tax (that's what a fuel tax is) to maintain the roads we drive on.

So yeah, the upper middle class will continue to not pay for roads, pay lower fuel costs, lower maintenance costs, and get $7500-12500 in free money for their luxury SUV
 
2021-11-18 12:53:46 PM  

Merltech: Notably, the credit can also be claimed by car dealers on taxpayers' behalf, allowing car sellers to build the tax break into their sticker prices. And it's refundable, meaning that taxpayers can qualify for it even if they have no tax liability - an improvement on current tax incentives for green cars.

So what's stopping the dealer from saying that the EV costs x more and the sticker price stays the same?


I would think the scenario where the buyer also applies for it, and it gets caught up in IRS audits.  Then, I suppose it's a matter of how well the dealer CYA-ed in their paperwork.  Even if they are legally in the right, the bad press from the Local News Investigative Fraud Stopper Team Go! coverage might deter them.

Yeah, that'll do it, right?
 
2021-11-18 1:04:00 PM  

mrmopar5287: When the Chevy Volt (not the Bolt EV) first came out, there was a number of less-than-honest car dealers who titled the cars to the dealership, took the tax credit, and then sold the cars as "used" to second owners.


How large were the credits to make that viable? I'm just imagining they'd have to be quite large to offset the "new" value of those vehicles.
 
2021-11-18 1:06:55 PM  

Merltech: Notably, the credit can also be claimed by car dealers on taxpayers' behalf, allowing car sellers to build the tax break into their sticker prices


Note that this is also something that allows people to get smaller loans on vehicles. Smaller loans that they might qualify for but the actual MSRP of the vehicle would result in them not qualifying for a loan.

With the prior tax credit you had to either pay for or take out a loan for the vehicle and only later did you get the tax credit refund of whatever you qualified for. The bank issuing the loan was basically trusting people to take that tax refund and use it to pay of part of the loan.
 
2021-11-18 1:08:46 PM  

zbtop: How large were the credits to make that viable? I'm just imagining they'd have to be quite large to offset the "new" value of those vehicles.


It was $7,500.

The problem for some buyers was that they weren't told that buying the car "used" means they didn't qualify for the tax credit because only the initial purchaser (the dealership) qualified for it. It was some typical dealership bullshiatting going on there.
 
2021-11-18 1:31:11 PM  
Is this where I make the "I didn't get benefits, when I did it, so nobody should!" shiat take?
 
2021-11-18 1:32:50 PM  

madgonad: So, leaving the poor and most the middle class to NOT have subsidized vehicles, continue to pay high fuel costs, and continue to be the only ones paying an effective usage tax (that's what a fuel tax is) to maintain the roads we drive on.

So yeah, the upper middle class will continue to not pay for roads, pay lower fuel costs, lower maintenance costs, and get $7500-12500 in free money for their luxury SUV


i.kym-cdn.comView Full Size
 
2021-11-18 1:33:26 PM  
Seems like this would exclude cars like the plug in hybrid Prius Prime and the RAV4 Prime.

Who wants a hybrid with a 2.5 gallon fuel tank?  if you have take a long trip where you can't charge back up, you'd be stopping every 100 miles.
 
2021-11-18 1:35:08 PM  

madgonad: So, leaving the poor and most the middle class to NOT have subsidized vehicles


Fark user imageView Full Size
 
2021-11-18 1:39:00 PM  

Autoerotic Defenestration: madgonad: So, leaving the poor and most the middle class to NOT have subsidized vehicles

[Fark user image 753x500]


The vast vast majority of the working and middle classes don't have a public transit option to get from where they live to where they work.

/before the pandemic I used to take the bus to work (no other mass transit)
//part of a whopping 30-40 people in a part of town with 70k residents.
 
2021-11-18 1:39:29 PM  

labman: Seems like this would exclude cars like the plug in hybrid Prius Prime and the RAV4 Prime.


The Prius Prime 2nd gen qualified for $4,500 in tax credits. The battery was sized to take advantage of that.

labman: Who wants a hybrid with a 2.5 gallon fuel tank?


In a vehicle like the BMW i3, the range extender option is not intended to be something routinely used or used for long distances. The small fuel tank is on purpose to discourage that kind of use pattern. The BMW i3 has a 9 liter fuel tank but in the USA it is software-limited to using 7.2 liters to meet EPA requirements for a smaller gasoline tank.
 
2021-11-18 1:42:12 PM  

madgonad: So, leaving the poor and most the middle class to NOT have subsidized vehicles, continue to pay high fuel costs, and continue to be the only ones paying an effective usage tax (that's what a fuel tax is) to maintain the roads we drive on.


Having the credit either be taken off at point of sale or be an actual tax refund (instead of the stupid post-tax credit it is now) would actually help with that, because the up-front costs of buying the car are much lower. (And, small, cheaper EVs are actually more likely to be built, as removing the engine, transmission, and fuel tank drastically simplifies both the design and cost of manufacturing something smaller.)

However, I agree with the road use tax - we need to overhaul how road taxes are collected, right now, before it gets to be an even bigger issue than it already is. And people aren't going to like it at all, but the options are either a large standard fee on yearly registration for EVs, a tax scale based on year-to-year mileage (verified via inspection or readout or something), or mandatory GPS trackers. Clearly, the latter is a non-starter.

Having said all of that, the idea that buying from union-only shops should be rewarded far more than from anyone else seems like someone got a giant kickback from the Big-3. And, also,seems like it would run afoul of several other laws regarding equal treatment of goods.
 
2021-11-18 1:51:01 PM  

Joe_diGriz: Having the credit either be taken off at point of sale or be an actual tax refund (instead of the stupid post-tax credit it is now) would actually help with that, because the up-front costs of buying the car are much lower. (And, small, cheaper EVs are actually more likely to be built, as removing the engine, transmission, and fuel tank drastically simplifies both the design and cost of manufacturing something smaller.)

However, I agree with the road use tax - we need to overhaul how road taxes are collected, right now, before it gets to be an even bigger issue than it already is. And people aren't going to like it at all, but the options are either a large standard fee on yearly registration for EVs, a tax scale based on year-to-year mileage (verified via inspection or readout or something), or mandatory GPS trackers. Clearly, the latter is a non-starter.

Having said all of that, the idea that buying from union-only shops should be rewarded far more than from anyone else seems like someone got a giant kickback from the Big-3. And, also,seems like it would run afoul of several other laws regarding equal treatment of goods.


The problem is that EVs are still very expensive. My household earns in the mid six figures and we don't have that kind of money. We only buy new and drive them for at least a decade. Never spent more than $26k on a car. I don't see how a household bringing in $60 is going to afford a Tesla 3.

There is no good solution for metering electric usage that won't require big changes. Annual odometer readings and tracking devices are a political landmine.

I didn't like the big union kickback either, but I believe it was there to throw a bone to 'Not Tesla'. They should have put all the money in domestic production, but I can't get angry at anything designed to screw Musk.
 
2021-11-18 2:19:18 PM  

madgonad: The problem is that EVs are still very expensive. My household earns in the mid six figures and we don't have that kind of money. We only buy new and drive them for at least a decade. Never spent more than $26k on a car. I don't see how a household bringing in $60 is going to afford a Tesla 3.


The bill does say there's a credit to cover Used EVs, as well, for those that can't buy new. Obviously, nowhere near the credit for "new", but "up to" $4K isn't nothing, either. (Although I have to wonder what the conditions are for that; I'm going to guess age and mileage.)

That doesn't mean I disagree; EVs are still in the high-end and luxury segments for the most part. This would hopefully drop as they get more ubiquitous. However, even small ICE cars are outrageously expensive anymore, even ignoring the current supply issues. Even a base-model Civic is around $22K at this point. Granted, still far cheaper than the few base-level EVs at the moment, but the credit is designed to at least get them within price comparison of each other. (Again, I'm not claiming that this is "easy" for anyone; our earnings are probably a little less than yours, and in NJ, so as much as I want to replace my trusty 2009 Civic with a new EV, it's probably not going to happen anytime soon.)

But the proposed income limits for the rebate seem really high. I can only assume that they're hoping to spur more affluent people to buy EVs and hopefully drive the costs down for everyone else over time.

madgonad: I didn't like the big union kickback either, but I believe it was there to throw a bone to 'Not Tesla'. They should have put all the money in domestic production, but I can't get angry at anything designed to screw Musk.


While true, and I certainly can't argue with the impulse to hurt Musk, it ALSO screws over every other manufacturer. Hyundai/Kia and VW, for example, are both clearly "all-in" on EVs, and I'd much rather buy one of those than a Tesla.
 
2021-11-18 2:21:47 PM  

Joe_diGriz: a tax scale based on year-to-year mileage (verified via inspection or readout or something


This tiered into weight-classes is the way it should be done. With extremely steep penalties for falsifying mileage. Freight trucks should be paying so much more than they do right now.
 
2021-11-18 2:22:21 PM  

mrmopar5287: NewportBarGuy: Oh thank god. That's just what car companies needed. More welfare.

We give outrageous tax-subsidized welfare to oil companies and it's to the detriment of ourselves. This shifts it to being somewhat better for the environment.


Did you forget which alt you were logged into?

That was a surprisingly sane take.
 
2021-11-18 2:24:41 PM  

Merltech: So what's stopping the dealer from saying that the EV costs x more and the sticker price stays the same?


As TFA says, there is a price cap to qualify for the credit.
 
2021-11-18 2:59:02 PM  

Joe_diGriz: While true, and I certainly can't argue with the impulse to hurt Musk, it ALSO screws over every other manufacturer. Hyundai/Kia and VW, for example, are both clearly "all-in" on EVs, and I'd much rather buy one of those than a Tesla.


Fark Musk, if this car would qualify I'd look at purchasing if BBB passes. But it won't, so I won't.
 
hej
2021-11-18 4:53:59 PM  
"Notably, the credit can also be claimed by car dealers on taxpayers' behalf, allowing car sellers to build the tax break into their sticker prices hope buyers don't know about the tax credit and see if they can get away with pocketing the $12k for themselves.."
 
2021-11-18 5:58:00 PM  

zeroman987: mrmopar5287: NewportBarGuy: Oh thank god. That's just what car companies needed. More welfare.

We give outrageous tax-subsidized welfare to oil companies and it's to the detriment of ourselves. This shifts it to being somewhat better for the environment.

Did you forget which alt you were logged into?

That was a surprisingly sane take.


Dude's usually very reasonable when it comes to EVs
 
2021-11-18 5:59:21 PM  

madgonad: So, leaving the poor and most the middle class to NOT have subsidized vehicles, continue to pay high fuel costs, and continue to be the only ones paying an effective usage tax (that's what a fuel tax is) to maintain the roads we drive on.

So yeah, the upper middle class will continue to not pay for roads, pay lower fuel costs, lower maintenance costs, and get $7500-12500 in free money for their luxury SUV


If we don't pay the rich, who will we pay?
 
2021-11-18 6:15:47 PM  

AmbassadorBooze: madgonad: So, leaving the poor and most the middle class to NOT have subsidized vehicles, continue to pay high fuel costs, and continue to be the only ones paying an effective usage tax (that's what a fuel tax is) to maintain the roads we drive on.

So yeah, the upper middle class will continue to not pay for roads, pay lower fuel costs, lower maintenance costs, and get $7500-12500 in free money for their luxury SUV

If we don't pay the rich, who will we pay?


If the goal is simply to reduce emissions, then it's fine if the upper middle class are mostly driving EVs at the start. It sucks that they're receiving the most benefit, but this should do well to put more eco-friendly into lower class hands. Once there's a robust used market, people will see the light and start switching in droves.

Workers need reliable and cheap transportation. Nothing better than an EV for those two factors. Particularly since entry-level EVs are increasingly being fitted with iron-based batteries that have a longer cycle life and can be charged to 100% every day if necessary. People will easily be able to drive their car to 300,000 miles and beyond if they want to, and that's when the reduction in emissions become really huge.
 
2021-11-18 6:50:03 PM  

Likwit: AmbassadorBooze: madgonad: So, leaving the poor and most the middle class to NOT have subsidized vehicles, continue to pay high fuel costs, and continue to be the only ones paying an effective usage tax (that's what a fuel tax is) to maintain the roads we drive on.

So yeah, the upper middle class will continue to not pay for roads, pay lower fuel costs, lower maintenance costs, and get $7500-12500 in free money for their luxury SUV

If we don't pay the rich, who will we pay?

If the goal is simply to reduce emissions, then it's fine if the upper middle class are mostly driving EVs at the start. It sucks that they're receiving the most benefit, but this should do well to put more eco-friendly into lower class hands. Once there's a robust used market, people will see the light and start switching in droves.

Workers need reliable and cheap transportation. Nothing better than an EV for those two factors. Particularly since entry-level EVs are increasingly being fitted with iron-based batteries that have a longer cycle life and can be charged to 100% every day if necessary. People will easily be able to drive their car to 300,000 miles and beyond if they want to, and that's when the reduction in emissions become really huge.


So instead of subsidizing the workers with EV, we give money to the rich for EV so they are easier on the environment with all their jet setting and travel?  How about we subsidize the working class and mandate the rich and elite not do pleasure travel (or lock them to the same average amount of pleasure travel miles that a worker does) and mandate they do work via zoom for all the things that don't need travel?  This saves even more carbon pollution.  The goal is to reduce carbon usage.  So, make the rich stay home.  And eminent domain their mansions and convert them into pods for the homeless.  Give the rich pods to live in.  They want us to live in pods and eat bugs.  If it is good enough for us, it is good enough for them.

When climate change is solved, the rich can have their money and property back.  But why would they want it back?  We will own nothing and be happy.
 
2021-11-18 7:00:31 PM  

Likwit: zeroman987: mrmopar5287: NewportBarGuy: Oh thank god. That's just what car companies needed. More welfare.

We give outrageous tax-subsidized welfare to oil companies and it's to the detriment of ourselves. This shifts it to being somewhat better for the environment.

Did you forget which alt you were logged into?

That was a surprisingly sane take.

Dude's usually very reasonable when it comes to EVs


I wanted a Bolt EV. My workplace has free charging while my apartment is inconvenient (6 block walk to charge for free). Conceivably I could never pay to charge on my regular commute and driving errands.

But I didn't qualify for the tax credit because $7,500 only goes to people who OWE that to the IRS. The Bolt was out of my reach and I bought a Cruze instead $5,500 in rebates/incentives) that has needed about $6,000 in warranty work.

The Bolt would be on recall anyway (or burned to the ground) so I guess it's a wash.
 
2021-11-18 7:38:32 PM  

Merltech: Notably, the credit can also be claimed by car dealers on taxpayers' behalf, allowing car sellers to build the tax break into their sticker prices. And it's refundable, meaning that taxpayers can qualify for it even if they have no tax liability - an improvement on current tax incentives for green cars.

So what's stopping the dealer from saying that the EV costs x more and the sticker price stays the same?


That's by design.  This is horrifically bad policy on many more levels than that, though.

See also: The infamous taxpayer funded golf carts.
 
2021-11-18 7:42:05 PM  

Likwit: If the goal is simply to reduce emissions...


It isn't.  Any policy that isn't a carbon tax is bullshiat.
 
2021-11-18 8:24:54 PM  
Nice!

What about poor people, now? Can you do something for us? That'd be pretty cool.

/we pay too much in taxes, too, and we don't have the money to afford it.
 
2021-11-18 8:44:31 PM  

BMFPitt: This is horrifically bad policy on many more levels than that, though.

See also: The infamous taxpayer funded golf carts.


Remember the early 2000s when some tax change resulted in "medium duty" vehicles being able to have the full depreciation written off in the year of purchase if used for a business or some such nonsense? It resulted in lots of realtors and the like buying Ford Excursions because if the GVWR was above 8,500 pounds it fell into that tax category.
 
2021-11-18 8:53:41 PM  

BMFPitt: Likwit: If the goal is simply to reduce emissions...

It isn't.  Any policy that isn't a carbon tax is bullshiat.


I agree. But that's even less likely than EV incentives or clean grids. The already wealthy have to benefit in some way for anything to get done in our country. It's what happens when the legislative system is pay-for-play. At least with this scheme, the middle class will get something. Then eventually there will be a robust used market from which those who couldn't otherwise buy an EV can benefit.
 
2021-11-19 9:11:27 AM  
Notably, the credit can also be claimed by car dealers on taxpayers' behalf, allowing car sellers to build the tax break into their sticker prices. And it's refundable, meaning that taxpayers can qualify for it even if they have no tax liability - an improvement on current tax incentives for green cars.

Huh?  That's called a tax credit.  There's tax deduction.  And there's tax credit.  Tax deduction can only lessen your tax liability whereas tax credit is basically a check.  Why introduce extra meaningless words here?

For once it isn't fark that doesn't understand the definitions of things... it's the article itself!
 
2021-11-19 9:35:53 AM  

Joe_diGriz: The bill does say there's a credit to cover Used EVs, as well, for those that can't buy new. Obviously, nowhere near the credit for "new", but "up to" $4K isn't nothing, either. (Although I have to wonder what the conditions are for that; I'm going to guess age and mileage.)


Yeah, the $4k for buying used set off my fraud detector.

I buy a union assembled, made in USA EV with a US battery and get $12,500
I sell it to my sister who gets $4,000
Who sells it to my brother who gets $4,000
Who sells it back to my wife (who files separately) and she get $4,000.

That's $24,500 right there. Maybe do a loop across the family every year for an annual $16,000?

All for a car that is driven by the same person every day.
 
2021-11-19 2:36:55 PM  

jake3988: Huh?  That's called a tax credit.  There's tax deduction.  And there's tax credit.  Tax deduction can only lessen your tax liability whereas tax credit is basically a check.  Why introduce extra meaningless words here?

For once it isn't fark that doesn't understand the definitions of things... it's the article itself!


Well there are actually 3 things.  There are deductions, refundable credits, and non-refundable credits.  Apparently this used to be the last kind, which can get your tax liability to zero, but won't make it go negative.
 
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