This could slow down 4xe sales

[ThirtyOne]

So, the public assistance scheme for electric vehicles may have a bit of belt-tightening occur.

Introducing welfare into a market that doesn't require it distorts that market.

It absolutely distorts the market. It’s intended to distort the market. That’s actually the whole point!

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[Oncorhynchus]

Biden is supporting expansion of the ev

it doesn’t matter if they could swing it. It matters if they would. Most would likely buy the ICE to save the extra money.

this is not designed as a tax break to benefit the buyer. It is intended to incent adoption of a relatively early stage technology.

and we all know it is bad faith for the Republicans to cry foul over a tax incentive for the rich. They believe rich people deserve tax incentives to reward them for getting rich. It has nothing to do with it. They are just trying to slow EV adoption because there are rich powerful lobbies that don’t like EVs.

I’m not anti-republican or pro-ev. I’m just saying this is a policy issue.Has nothing to do with whether these credits are regressive or not. Yeah lots of people don’t want to see coastal elites get a tax credit on a Tesla they would probably have bought anyway. But EV adoption needs to spread beyond them, and the incentives help that happen.

Agree with you. BEV automobiles have not yet crossed the chasm between early adopters and the mainstream consumer and therefore incentives are a reasonable tactic to be used by policy makers.

 

[Heimkehr]

It absolutely distorts the market. It’s intended to distort the market. That’s actually the whole point!

That doesn't make it right.

Every electric vehicle presently sold in the U.S. market is a premium good, which link them inexorably to buyers with higher-than-average incomes. This is not a constituency that requires government assistance to incentivize their new car purchases. They don't need dollar bills waved in front of them to do the right thing.

And a fair number of them aren't doing the right thing. Over a five year period, $82M in fraudulent EV credits have been claimed. Predictably, the IRS doesn't have a handle on the buyers who, again, don't need the help but are illicitly grabbing the low hanging fruit anyway. But hey, as long as these distortions were intended to occur, right?

 

[Jank4AU]

That doesn't make it right.

Every electric vehicle presently sold in the U.S. market is a premium good, which link them inexorably to buyers with higher-than-average incomes. This is not a constituency that requires government assistance to incentivize their new car purchases. They don't need dollar bills waved in front of them to do the right thing.

And a fair number of them aren't doing the right thing. Over a five year period, $82M in fraudulent EV credits have been claimed. Predictably, the IRS doesn't have a handle on the buyers who, again, don't need the help but are illicitly grabbing the low hanging fruit anyway. But hey, as long as these distortions were intended to occur, right?

What is the right thing? Do you mean going electric or not committing fraud? There is fraud, waste, graft, and abuse up and down the spectrum when dealing with an oversized goliath of a government. The bloated size makes it especially easy for some to play the system.

With regards to incentivizing the purchase, you're missing the point being made about new technology and the reason some people want to incentivize it to begin with. For some, they're interested in it for a cost savings. I'm paying less for my 4xe than I would for the same ICE Rubicon, so I'm getting the Rubi 4xe. This feeds into the 2nd reason that some folks have, and that's to minimize carbon footprints and reliance on fossil fuels. I don't believe in global warming (it's called seasons) but I also don't have any problem with trying to go electric or being environmental. My personal concern with going total electric is that it makes my normal travel pattern very different as now I'll have to take breaks to charge a vehicle vs just "filling up". Also, our government hasn't done anything to bolster our energy production to support a total switch over from fossil fuel to electric. I personally am no fan of brown-outs so don't want them to come to Alabama because we can't burn coal for power plants.

Again, who cares how much money someone else has. It's none of our business. If you're jealous, go out and get your own but don't point fingers at the people who pay all of the taxes for the 49% who don't. The wealthy in our country are the most philanthropic people on the planet. They don't hide their money under their mattress. Where do you think your loan for your vehicle comes from? Their money at work.

From Giving USA:

↑ Giving by individuals totaled an estimated $309.66 billion, rising 4.7% in 2019 (an increase of 2.8%, adjusted for inflation). Giving by individuals achieved the second-highest total dollar amount on record, adjusted for inflation, and was less than 70% of total giving for only the second time ever.

 

[ThirtyOne]

That doesn't make it right.

Every electric vehicle presently sold in the U.S. market is a premium good, which link them inexorably to buyers with higher-than-average incomes. This is not a constituency that requires government assistance to incentivize their new car purchases. They don't need dollar bills waved in front of them to do the right thing.

And a fair number of them aren't doing the right thing. Over a five year period, $82M in fraudulent EV credits have been claimed. Predictably, the IRS doesn't have a handle on the buyers who, again, don't need the help but are illicitly grabbing the low hanging fruit anyway. But hey, as long as these distortions were intended to occur, right?

As long as they put a new EV on the road, then yes it achieves the policy objective.

look. If this was a free-market libertarian argument about letting the market decide then i would respect it.But it’s not. It’s saying let’s support the policy but only for the average joe. Which you know is not a good faith argument. The only way this works is if you incent Relatively affluent people to buy luxury cars. They know that. They just don’t want the policy to work.

I just hate this fake populism because it’s BS.

 

[csjlu]

Biden is supporting expansion of the ev

it doesn’t matter if they could swing it. It matters if they would. Most would likely buy the ICE to save the extra money.

this is not designed as a tax break to benefit the buyer. It is intended to incent adoption of a relatively early stage technology.

and we all know it is bad faith for the Republicans to cry foul over a tax incentive for the rich. They believe rich people deserve tax incentives to reward them for getting rich. It has nothing to do with it. They are just trying to slow EV adoption because there are rich powerful lobbies that don’t like EVs.

I’m not anti-republican or pro-ev. I’m just saying this is a policy issue.Has nothing to do with whether these credits are regressive or not. Yeah lots of people don’t want to see coastal elites get a tax credit on a Tesla they would probably have bought anyway. But EV adoption needs to spread beyond them, and the incentives help that happen.

My comment was meant to illustrate that the aggregate buying power of EVs is still largely intact. Most US households still qualify, and those who don't can still mostly afford. In other words, this is more of a news headline / political posturing exercise than it is a real world impact.

If $7500 makes or breaks a buyer's 4xe purchase, then yes they lose a marginal buyer but the average JLU buyer demographic is older and richer than average. This message board is stuffed with stories of people paying up for premium vehicles, which they immediately dissemble and add another $5k-15K of parts to (some of which have little to no economic merit). In the 4xe's defense, the premium one may have top pay (through higher MSRP, or a forgone tax credit) could possibly be recaptured through lower gasoline intensity.

Assuming aggregate buying power remains intact, EV breakthroughs can still occur. And as much as it pains me to type it, the 4xe is not really a vehicle the country needs. I like the 4xe personally, but EV technology advancement is probably better achieved on other concepts in the near term. The Prius, Leaf and Roadsters were groundbreaking EVs for different reasons. The 4xe isn't...it proves that Jeep can play the PHEV game, but PHEVs have been around for some time. A cynic could argue the 4xe serves no other purpose other than vacuuming up tax rebates (and achieving CAFE targets). I personally want more EVs, I like the 4xe, and would consider it next time around.

I think the real end game being played is a push for greater public recharging infrastructure, just as it was however many decades ago it was when the country needed to incentivize greater gasoline refueling infrastructure. This is probably better achieved through cheaper vehicles that are more likely to be driven frequently (ie in the hands of lower/middle class drivers) than it is with upper income drivers who have the luxuries of private-use home/office recharging stations and maybe only use the vehicle as a novelty/weekender. Very broad assumptions and generalizations, but I believe them to be true.

 

[ThirtyOne]

My comment was meant to illustrate that the aggregate buying power of EVs is still largely intact. Most US households still qualify, and those who don't can still mostly afford. In other words, this is more of a news headline / political posturing exercise than it is a real world impact.

If $7500 makes or breaks a buyer's 4xe purchase, then yes they lose a marginal buyer but the average JLU buyer demographic is older and richer than average. This message board is stuffed with stories of people paying up for premium vehicles, which they immediately dissemble and add another $5k-15K of parts to (some of which have little to no economic merit). In the 4xe's defense, the premium one may have top pay (through higher MSRP, or a forgone tax credit) could possibly be recaptured through lower gasoline intensity.

Assuming aggregate buying power remains intact, EV breakthroughs can still occur. And as much as it pains me to type it, the 4xe is not really a vehicle the country needs. I like the 4xe personally, but EV technology advancement is probably better achieved on other concepts in the near term. The Prius, Leaf and Roadsters were groundbreaking EVs for different reasons. The 4xe isn't...it proves that Jeep can play the PHEV game, but PHEVs have been around for some time. A cynic could argue the 4xe serves no other purpose other than vacuuming up tax rebates (and achieving CAFE targets). I personally want more EVs, I like the 4xe, and would consider it next time around.

I think the real end game being played is a push for greater public recharging infrastructure, just as it was however many decades ago it was when the country needed to incentivize greater gasoline refueling infrastructure. This is probably better achieved through cheaper vehicles that are more likely to be driven frequently (ie in the hands of lower/middle class drivers) than it is with upper income drivers who have the luxuries of private-use home/office recharging stations and maybe only use the vehicle as a novelty/weekender. Very broad assumptions and generalizations, but I believe them to be true.

Lots of people would choose the ICE if it was cheaper that are choosing a hybrid or electric with the incentive. That is the goal. It is completely irrelevant whether they can afford the electric without the incentive or not.

hybrids and electrics are expensive. Only old relatively affluent people with garages buy plugins and electrics. Without those people this incentive doesn’t work.

 

[Heimkehr]

Acknowledging that fraud, etc. occurs and then just throwing up one's hands is no way to approach this matter with a clear head. Perhaps that's why we see what "the right thing" is being asked.

These precious e-vehicle incentives are forcing artificial market outcomes. As they are functionally a reshuffling of tax revenue, invariably, this policy raises costs on us all.

The insightful mind would ask why a tax credit for a particular and wholly non-critical consumer good even exists. Pay your own way, you lousy sponge.

 

[csjlu]

Lots of people would choose the ICE if it was cheaper that are choosing a hybrid or electric with the incentive. That is the goal. It is completely irrelevant whether they can afford the electric without the incentive or not.

hybrids and electrics are expensive. Only old relatively affluent people with garages buy plugins and electrics. Without those people this incentive doesn’t work.

Jeep buyers can be very shortsighted and I'll leave it at that. The 4xe repays its incremental cost and then some, even without the tax rebate, through greater fuel efficiency. I would love to have a 4xe, but there is not enough public recharging infrastructure near me to justify it.

 

[OINC]

And a fair number of them aren't doing the right thing. Over a five year period, $82M in fraudulent EV credits have been claimed. Predictably, the IRS doesn't have a handle on the buyers who, again, don't need the help but are illicitly grabbing the low hanging fruit anyway.

Never attribute to malice that which is adequately explained by stupidity.

In this case, the tax credit is complicated for those not intimately versed in taxation -- see ALL the threads here about the thing! -- so it's not hard to understand how people claim it without truly understanding it and therefore may be claiming it when they're not in fact eligible.

It is also worth noting that the IRS has been pursuing repayment of the fraudulently-claimed tax credits.

Also, our government hasn't done anything to bolster our energy production to support a total switch over from fossil fuel to electric. I personally am no fan of brown-outs so don't want them to come to Alabama because we can't burn coal for power plants.

The new infrastructure bills explicitly include lots of funds to modernize and expand the power grid, including funding for cleaner energy sources. So that's coming too (and about damn time -- our power grid is ancient).

 

[Reactor111]

@Asterix2112 You can't give a tax cut to people who don't pay taxes. So it necessarily has to go to those who pay the taxes.

The tax code is slam full of credits that pay people when they have earned no income. You had better research things before making common sense statements like that ! The tax code is just income redistribution.

 

[Jank4AU]

The tax code is slam full of credits that pay people when they have earned no income. You had better research things before making common sense statements like that ! The tax code is just income redistribution.

Well I would argue that a tax cut is different than a tax credit, no? I mean, if you have no income or didn't pay payroll taxes...why does that filer get money? Oh yeah, that last part there of your post...redistribution. Gotta love it, eh?

 

[csjlu]

The tax code is slam full of credits that pay people when they have earned no income. You had better research things before making common sense statements like that ! The tax code is just income redistribution.

Tax credits are deducted from the tax liabilities owed. It is difficult to generate tax liabilities with no income. I'm not aware of a "no liability" tax payer being paid by a credit.

 

[Jank4AU]

Tax credits are deducted from the tax liabilities owed. It is difficult to generate tax liabilities with no income. I'm not aware of a "no liability" tax payer being paid by a credit.

Earned Income Credits, there are child tax credits as well that pay people money without having worked.

 

[csjlu]

Earned Income Credits, there are child tax credits as well that pay people money without having worked.

The EIC is available only to taxpayers with low or moderate earnings, whether or not they have qualifying dependents. To be eligible for the EIC, a taxpayer must have accrued earnings during the tax year.

interesting fact: your bio says you are from Alabama, a state that receives $2.08 in federal funds back for every $1 it raises in US federal taxes. By that ratio, Alabama is the eighth greatest beneficiary of redistributed federal funds at the state level.

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