Senate Bill Deal to Expand EV Tax Credits (7/27/2022)

[mjs020294]

Or even better, leave that money in taxpayers' pockets to begin with and let them decide where to spend it.

It is being funded by corporate taxes so individual tax payers wouldn't see any of that money. The irony is the manufacturers will adjust prices to take advantage of the credit and the money will just end up back in corporate bank accounts.

Instead of robbing Peter to pay Paul we are robbing Peter to pay Peter .

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[DennisD]

It is being funded by corporate taxes so individual tax payers wouldn't see any of that money. The irony is the manufacturers will adjust prices to take advantage of the credit and the money will just end up back in corporate bank accounts.

Instead of robbing Peter to pay Paul we are robbing Peter to pay Peter .

So worse case scenario.................even.

Got it.

 

[Mach1E]

What we now have currently, is a tax credit if you purchase an EV from a Manufacturer that has not yet reached the 200K limit in production. In other words, you are essentially getting a tax cut at the end of the year. You are keeping "your" money and spending it however you choose. To paraphrase, you are deciding where to spend it.

When you say "extending" the subsidy, what you are suggesting is that people shouldn't be getting a tax credit while at the same time you are suggesting that people will spend it more wisely if they can keep the money in their pockets.

Do you often find yourself disagreeing with yourself? ?

Now I realize that the "payout" will be different in the new Bill, it is essentially the same thing at the end of the day. (or year in the previous case)

I would think Republicans would love this current structure proposed. They are always talking about how tax cuts would spur the economy but I guess they don't like it so much when Democrats introduce it?

This new bill is more spending and more taxes.

Where are you seeing cuts?

At the end of the day, yes, both sides want to “spur the economy.” They just disagree on the best way to do it.

Left says more govt spending and more taxes.

Right says less and less.

Reality? Both actually work. The argument is more about control. Who decides where the $$ goes.

 

[DennisD]

This new bill is more spending and more taxes.

Where are you seeing cuts?

At the end of the day, yes, both sides want to “spur the economy.” They just disagree on the best way to do it.

Left says more govt spending and more taxes.

Right says less and less.

Reality? Both actually work. The argument is more about control. Who decides where the $$ goes.

The previous poster suggested "extending" which would imply the tax cut that I will enjoy in 2023 for my 2022 tax year could be extended. (those are his words)

Those are the cuts that I was talking about. I will in effect see my tax liability CUT by $7,500.

 

[Mach1E]

So worse case scenario.................even.

Got it.

Yeah, kinda what I’ve been saying all along.

Net result on prices? Even. Unless you are upper middle class or more, then you pay more.

Because of the above, net result on the environment? Even. If prices don’t change, nothing is gained.

More money to corporations and more money from corporate taxes. Even. Just shifts who is paying and who is getting.

This is why I think it’s a “waste.” It does nothing but create a big wealth transfer. And it’s mostly $$ from everyone (taxes on corps = higher prices) and more $$ to the car manufacturers.

So all consumers lose $$, the planet gains nothing, some low income car buyers pay the same price, high income car buyers pay a higher price and car manufacturers get billions.

No thanks!

 

[Mach1E]

The previous poster suggested "extending" which would imply the tax cut that I will enjoy in 2023 for my 2022 tax year could be extended. (those are his words)

Those are the cuts that I was talking about. I will in effect see my tax liability CUT by $7,500.

Ah, even so, it’s not the kinda cuts the right likes.

They like “tax cuts.”

The above is a “tax cut if you do what we tell you to do.”

It’s about control again. But honestly both sides do that. It’s why our tax code is the most complicated one on the planet.

 

[FullyCharged]

I only got to page 13… so apologies if this was covered in later posts.

For everyone saying “all the OEM’s do is raise their prices to capture the tax credit”… of course. That’s kinda by design. It allows the manufacturers to (1) offset higher initial costs as they get into EV’s and (2) recoup some of their investments around their shift to EV… both of which are intended to help motivate and accelerate the shift. It is also why there was a cap on the initial number of units covered. On the consumer side, as many have pointed out, the tax credit then brings the value of the car back down for the consumer. I guess The argument against the OEM’s capturing the credit is essentially they are large and profitable enough they should do it anyway… I think history might indicate that didn’t prove too effective in getting the market and consumers making the shift in earlier attempts at electrification.

 

[Mach1E]

I only got to page 13… so apologies if this was covered in later posts.

For everyone saying “all the OEM’s do is raise their prices to capture the tax credit”… of course. That’s kinda by design. It allows the manufacturers to (1) offset higher initial costs as they get into EV’s and (2) recoup some of their investments around their shift to EV… both of which are intended to help motivate and accelerate the shift. It is also why there was a cap on the initial number of units covered. On the consumer side, as many have pointed out, the tax credit then brings the value of the car back down for the consumer. I guess The argument against the OEM’s capturing the credit is essentially they are large and profitable enough they should do it anyway… I think history might indicate that didn’t prove too effective in getting the market and consumers making the shift in earlier attempts at electrification.

All true, which is why the old credit worked.

We don’t need a decade of billions of $$ In credits to convince auto manufacturers to go electric. They’re already doing it.

Some of the largest ones have promised to even go all electric.

 

[dbsb3233]

What we now have currently, is a tax credit if you purchase an EV from a Manufacturer that has not yet reached the 200K limit in production. In other words, you are essentially getting a tax cut at the end of the year. You are keeping "your" money and spending it however you choose. To paraphrase, you are deciding where to spend it.

When you say "extending" the subsidy, what you are suggesting is that people shouldn't be getting a tax credit while at the same time you are suggesting that people will spend it more wisely if they can keep the money in their pockets.

Do you often find yourself disagreeing with yourself? ?

Now I realize that the "payout" will be different in the new Bill, it is essentially the same thing at the end of the day. (or year in the previous case)

I would think Republicans would love this current structure proposed. They are always talking about how tax cuts would spur the economy but I guess they don't like it so much when Democrats introduce it?

Haha! Nice try but, no, you got the premise wrong. Tax credits and tax cuts are totally different things. Only a tiny slice of that $7500 was your tax dollars paid in. The vast majority of it was from other taxpayers that aren't getting a $7500 freebie. That's not me disagreeing with myself, that's me disagreeing with you because you got the premise wrong. ?

(This bill a tax increase, not a tax cut.)

As for the existing $7500 law, one could argue it was unfair too, but at least it was in effect during the period that EVs actually needed a boost to get going. Before the Mach-E, EV6, ID.4, Lightning, Rivian, Model Y, etc etc etc. But obviously that has changed with the advent of battery tech advancing to the point of being able to build popular mainstream vehicles with the desired ~300 mile range. The 200k limit made sense because that was the whole point -- get manufacturers over the hump. 200k is a reasonable hump. Once you're over the hump, momentum takes over. This EV momentum is not suddenly going to change now. Just about anyone that's driven one knows.

 

[dbsb3233]

It is being funded by corporate taxes so individual tax payers wouldn't see any of that money. The irony is the manufacturers will adjust prices to take advantage of the credit and the money will just end up back in corporate bank accounts.

Instead of robbing Peter to pay Paul we are robbing Peter to pay Peter .

Corporate taxes just add to cost structure and get passed through to consumers of their products though. Ultimately it's individuals that pay all tax burden.

 

[rcechinel]

It is being funded by corporate taxes so individual tax payers wouldn't see any of that money. The irony is the manufacturers will adjust prices to take advantage of the credit and the money will just end up back in corporate bank accounts.

Instead of robbing Peter to pay Paul we are robbing Peter to pay Peter .

I actually think that the argument "manufacturers will increase the price right away to take advantage of the higher demand created by any incentive" was more true 5-8 years ago, when Tesla didn't have any real competition. Today, if Ford jacks the price of the Mach-E, there are at least 5 other cars in the "same" category (EV6, Ioniq5, GV, ID.4, and Model Y, I could be forgetting a few. Maybe the Volvo C40 Recharge). Same thing with the F150 Lightning, Rivian is already here and a bunch more is coming.
I think the demand will explode, but the income limits, the car price limits, and the competition will control eventual abuses. Call me naive.

 

[rcechinel]

Yeah, kinda what I’ve been saying all along.

Net result on prices? Even. Unless you are upper middle class or more, then you pay more.

Because of the above, net result on the environment? Even. If prices don’t change, nothing is gained.

More money to corporations and more money from corporate taxes. Even. Just shifts who is paying and who is getting.

This is why I think it’s a “waste.” It does nothing but create a big wealth transfer. And it’s mostly $$ from everyone (taxes on corps = higher prices) and more $$ to the car manufacturers.

So all consumers lose $$, the planet gains nothing, some low income car buyers pay the same price, high income car buyers pay a higher price and car manufacturers get billions.

No thanks!

I couldn't decide where to start to counter your arguments, since there are so many assumptions that are not economically and fiscally precise, to say the least.
I understand you are speaking with your ears (and eyes) covered, so no reason to engage. I will just watch.

 

[mjs020294]

Corporate taxes just add to cost structure and get passed through to consumers of their products though. Ultimately it's individuals that pay all tax burden.

Many large companies have been buying stock back hand over fist in recent years. That only benefits a small number of people. Taxing corporate profits and investing in infrastructure not only benefits the general population it benefits the companies in the long run.

 

[dbsb3233]

So let's say this new bill never becomes law and the old law stays in effect. And Ford's credits phase out in the next few quarters. Who actually believes they'd do an about-face and stop making Mach-Es? And Lightnings? And E-Transits? And all the other EV models in the pipeline? And stop building those battery plants?

Same for GM. And VW. And Hyundia. And all the others.

 

[dbsb3233]

Lost in the shuffle was this part of the bill: a $40,000 subsidy to electric semis (which also already have long wait lists).

https://electrek.co/2022/07/29/electric-trucks-tesla-semi-40000-incentives-new-bill/

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