EV tax credits in Build Back Better Act - income limit?

[Fighton]

I know there are a lot of unknowns at this moment, but I find the income limit very confusing.
Putting a income limit will force those people affected by this to consider ICE because effectively they are penalized by up to $12,500 for switching to EV, I thought the intention is to have more people switching?

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[FarSide]

I don't know if the $7,500 of the proposed $12,500 is also going to be income caped or if its the entire ball of wax now? Its smart to open the EV credit back up to Tesla and high volume cars. The credits should be across the board, it's only one car per tax filer. We need more EV momentum.

 

[DevSecOps]

I know there are a lot of unknowns at this moment, but I find the income limit very confusing.
Putting a income limit will force those people affected by this to consider ICE because effectively they are penalized by up to $12,500 for switching to EV, I thought the intention is to have more people switching?

The last study that I saw said EV's are 1.3x more expensive that ICE. In my opinion, the rebate is meant to equalize the car to an ICE alternative and make it "affordable". I'm opposed to tax credits at any income level, but we won't get into that (again).

My crystal ball shows me lots of "privilege" and "equality" comments incoming.

 

[DrSteveBrule]

I know there are a lot of unknowns at this moment, but I find the income limit very confusing.
Putting a income limit will force those people affected by this to consider ICE because effectively they are penalized by up to $12,500 for switching to EV, I thought the intention is to have more people switching?

People privileged enough to be affected by the income limit are not forced into anything.

 

[MrClean]

People privileged enough to be affected by the income limit are not forced into anything.

Well yeah, except there is a big difference between earning $300k in NY, LA, SF, etc., and Cleveland. The cost of living is never considered.

 

[Socalsp3]

People affected by the income limit will buy the better car. Don't think tax rebate matter that much

 

[DrSteveBrule]

Well yeah, except there is a big difference between earning $300k in NY, LA, SF, etc., and Cleveland. The cost of living is never considered.

I mostly agree with you. I live in a relatively high-cost area. I'm also sort of ok with motivating folks who don't live in a high-cost area who mostly seem to have different political views than me to do the right thing.

 

[blazinazn]

The income limit is inconsequential for a majority of buyers and if you hit the income limit congrats you're a top 1% earner. The most concerning thing to me is the price cap based on vehicle class as right now the Mach E is a station wagon and would be over the $55K cap in the majority of configurations.

 

[DrSteveBrule]

The income limit is inconsequential for a majority of buyers and if you hit the income limit congrats you're a top 1% earner. The most concerning thing to me is the price cap based on vehicle class as right now the Mach E is a station wagon and would be over the $55K cap in the majority of configurations.

This is also good, since it should put pressure on Ford to lower the price.

 

[yngwenli]

I'm in agreement with some folks there shouldn't be an income limit. Just saw an article that you need to make nearly 400k to buy any home in the bay area. It's a mess there honestly in terms of housing (and pretty much anywhere in CA) and for folks wanting to raise a family, a house tends to go hand in hand with that.


I think any rules which makes it all the more confusing is just bad policy. If they want, $80k for all EVs, none of this truck, sedan, SUV crap. No income limits, no "per car" limit per year neither since that wasn't there before. What if you need to replace more than 1 car due to new job, back to work, after the WFH is over?

Manufacturers price the cars based on the credits anyways...the market will adjust.

Class warfare is just bad for the American population (seeing this a lot in Solar now in CA) and instead, they should make this credit at POS (Point of Sale) so lower income qualifies instantly, have a credit for used EVs (again, helping lower income) where the old credit didn't work at all.

The wealthy will buy the EV whether there is a tax credit or not (they own homes, they can charge at home, they own multiple cars, EVs just makes sense since they have solar too).

The rich will have other ways to minimize taxes as always since they have the time/resources to do smart/legal tax planning.

 

[Kevin P]

I mostly agree with you. I live in a relatively high-cost area. I'm also sort of ok with motivating folks who don't live in a high-cost area who mostly seem to have different political views than me to do the right thing.

The "right thing" is not cut and dried. What is right/viable for someone living in a big coastal city may be totally unworkable for someone in what are derisively called "flyover states."

 

[RedDragon]

I'm in agreement with some folks there shouldn't be an income limit. Just saw an article that you need to make nearly 400k to buy any home in the bay area. It's a mess there honestly in terms of housing (and pretty much anywhere in CA) and for folks wanting to raise a family, a house tends to go hand in hand with that.


I think any rules which makes it all the more confusing is just bad policy. If they want, $80k for all EVs, none of this truck, sedan, SUV crap. No income limits, no "per car" limit per year neither since that wasn't there before. What if you need to replace more than 1 car due to new job, back to work, after the WFH is over?

Manufacturers price the cars based on the credits anyways...the market will adjust.

Class warfare is just bad for the American population (seeing this a lot in Solar now in CA) and instead, they should make this credit at POS (Point of Sale) so lower income qualifies instantly, have a credit for used EVs (again, helping lower income) where the old credit didn't work at all.

The wealthy will buy the EV whether there is a tax credit or not (they own homes, they can charge at home, they own multiple cars, EVs just makes sense since they have solar too).

The rich will have other ways to minimize taxes as always since they have the time/resources to do smart/legal tax planning.

Agree here on the income limit being silly. The whole point of the incentive is to catalyze the general population to buy EVs over ICE for global warming / climate change issues. Everybody, regardless of income, should have that incentive as the end result affects everyone

 

[Ride_the_lightning]

People affected by the income limit will buy the better car. Don't think tax rebate matter that much

Not true. Just because we “can” afford it doesn’t mean I like throwing money away. As a family we need 2 cars, also pay for daycare, etc. An extra $15000 net is a vacation I could take. I like EVs but not enough to spend an extra 15k (two cars X $7500).

people buying 125k Tesla Plaids? Sure. But many people at the low end of the income cap are trying to buy two nice family vehicles. You have to look at the comparisons. Yes, I could outright buy an id4 without the credit. But Im not in the market for a CRV. It’s XC40 vs XC40 recharge. Or BMW 335 vs i4. Or in our case, Audi Q5 vs Q5 PHEV. The PHEV costs a lot more and the only difference is the powertrain. We aren’t comparing buying an Audi vs the VW id4.

people can hate on higher income people all they want. They certainly aren’t entitled to a tax credit. Frankly I get tired of being attacked on two fronts. We already pay much higher marginal tax rates, then are also expected to pay more for goods and services than other people, and credits and benefits are phased out. The effective marginal rate for a family at the lower end of “wealthy” (300-500k a year) is enormous. Easily more than 50% federal when you factor in the phaseouts of many credits and deductions like the child tax credit. Keep in mind that a family making 350-400k could be a pediatrician or nurse practitioner married to an engineer. Not CEOs and Elon Musk.

 

[Mickey the T]

What if an income limit on the EV tax credit is the only way that Joe Manchin would agree to be the 50th vote for the BBBA? I'm not necessarily saying that's the case with the EV credit, although Manchin has looked for all sorts of opportunities to moderate the bill.

Just keep in that we're debating this issue in a vacuum, where legislation is written as a series of compromises designed to get enough congressfolk to vote for it. They also have to keep an eye on total dollar amounts for the entire package, although I'm not sure if an income cap makes a meaningful difference in the cost of such a large bill.

 

[Maquis]

This thread could be used as the basis for a thesis about attempts at behavior control via tax policy!

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