EV credits for everyone!

[LakeLeaf]

Ready for another cash for clunkers program?

It looks like General Motors is attempting to replace it's own consumer incentives with tax payer money. The car company, bailed out of bankruptcy in 2009 by the American tax payer, appears to be turning the government into an automatic rebate provider.

The Obama administration and their friends on Capitol Hill are floating around a proposal to change the $7500 tax credit for green vehicles. This change can be found not only in President Barack Obama's budget but also a bill proposed by Senator Debbie Stabenow, Michigan Democrat.

Edmunds.com, a 45 year old trade magazine company that provides automotive information, posted a Department of Energy document listing the department's funding highlights. The proposed Obama Budget, changes the existing $7,500 electric vehicle tax credit “into a rebate that will be available to all consumers immediately at the point of sale.”

According to Senator Stabenow's website, her proposed legislation, known as the "Charging America Forward Act" (S.298), "will provide consumers with a rebate worth up to $7500 for plug-in electric vehicles at the time of purchase."

Essentially, if one were to buy a $41,000 Chevy Volt, the buyer gets a $7,500 coupon, so the final price is $33,500. In the end, the auto dealer assumes the risk of the government giving them this tax credit.

It is pretty convenient that Ms. Stabenow, who represents a state where GM is headquartered is pushing a bill that is also supported by Edison Electric Institute, whose president was loaned a Chevy Volt, Eaton Corp: the sole American producer of car recharge systems, and Battery Electric Vehicle Coalition, a lobbying group for the electric car industry.

In fact, Department of Energy's David Sandalow told Bloomberg News in February the insta-credit would operate the “same way the 2009 ‘Cash for Clunkers’ program worked.”

The Detroit News reported Vice President Joe Biden said at an Indiana battery assembly plant, "You won’t have to wait,’ it would be like the cash-for-clunkers program.”

GM is likely the most excited about this instant credit plan. “General Motors supports the instant credit saying the bill “integrates all of the components necessary for successful acceleration of electric vehicles in the marketplace," The Detroit News reported.

 

[davewill]

It's certainly much fairer to middle income buyers. So many of them either can't take the credit, or can't afford to wait until tax time to get it.

 

[smkettner]

I plan to 100% finance and use the $7500 for other stuff. The rebate would probably derail my plans so no thanks.

 

[Yohannon]

I plan to 100% finance and use the $7500 for other stuff. The rebate would probably derail my plans so no thanks.

Same here! Although the way CA does the 5000.00 rebate would be fine (rebate sent as a check after proof of purchase, and so on... yes, I know that's a bit of an oversimplification. ).

Of course, with the things the way they are in DC those days this proposal will likely not be implemented for months... so September/October deliveries are more at risk than April/May, IMHO.

~Y~

 

[camasleaf]

Good, I was not going to get the full tax credit. Now I just hope I will get the car AFTER the bill/budget is approved. :lol:

Glacier Perl SLe
4/20/10 - 10/28/10
Wilsonville Nissan, Portland OR
Month of May
VIN ???
EV Project approved, Installation no later than 04/30

 

[evnow]

Covered earlier ... though in a much more positive way.

 

[Deleted member 603]

The bad thing about this idea is that, other than helping lower income people affort a Leaf, it also results in giving rich people free money they don't need. The way the current system is structured prevents people who are well off enough to be paying the AMT tax from getting the EV rebate.

The one good thing about it is the rebate is given right at the time of purchase. For a lot of us it is a hardship to wait up to a whole year to get the $7500 back.

Overall I would say keep the current system rather than allowing rich people from profitting from this.

 

[Boomer23]

The bad thing about this idea is that, other than helping lower income people affort a Leaf, it also results in giving rich people free money they don't need. The way the current system is structured prevents people who are well off enough to be paying the AMT tax from getting the EV rebate.

The one good thing about it is the rebate is given right at the time of purchase. For a lot of us it is a hardship to wait up to a whole year to get the $7500 back.

Overall I would say keep the current system rather than allowing rich people from profitting from this.

That's incorrect, as I understand it. The EV purchase tax credit is not limited by the AMT. The EVSE (home charger, alternative fueling equipment) credit IS limited by the AMT. I'm guessing that is where the confusion comes from.

 

[AndyH]

The bad thing about this idea is that, other than helping lower income people affort a Leaf, it also results in giving rich people free money they don't need. The way the current system is structured prevents people who are well off enough to be paying the AMT tax from getting the EV rebate.

The one good thing about it is the rebate is given right at the time of purchase. For a lot of us it is a hardship to wait up to a whole year to get the $7500 back.

Overall I would say keep the current system rather than allowing rich people from profitting from this.

This doesn't make any sense to me.

If this really is a country by, for, and of the people, and we're talking about how to use our money to promote moving in a direction we all know we must move - even if it's for different reasons - then it seems that the only fair way to handle any EV incentive is to open it to all purchasers.

My only adjustment to this would be to not give the credit to to businesses but to private parties - businesses already have plenty of incentives, write-offs and ways to depreciate an EV.

 

[jfsquires]

If the rebate is made at the time of purchase, what happens to those people who have purchased a Leaf before the law goes into effect?

 

[smkettner]

I would prefer to see the credit carried forward rather than the instant rebate.

 

[davewill]

The bad thing about this idea is that, other than helping lower income people affort a Leaf, it also results in giving rich people free money they don't need.
...
Overall I would say keep the current system rather than allowing rich people from profitting from this.

This doesn't make any sense to me.

If this really is a country by, for, and of the people, and we're talking about how to use our money to promote moving in a direction we all know we must move - even if it's for different reasons - then it seems that the only fair way to handle any EV incentive is to open it to all purchasers.

My only adjustment to this would be to not give the credit to to businesses but to private parties - businesses already have plenty of incentives, write-offs and ways to depreciate an EV.

I see no reason to limit participation of anyone, rich, business, OR poor. The point is to incentivise EV car purchases to help break the chicken/egg cycle of not enough vehicles vs. not enough charging infrastructure. No matter who buys the EV, it helps get EVs get launched. That's why I like this idea, it opens EVs up to people for whom the tax credit was nearly useless.

 

[AndyH]

I see no reason to limit participation of anyone, rich, business, OR poor. The point is to incentivise EV car purchases to help break the chicken/egg cycle of not enough vehicles vs. not enough charging infrastructure. No matter who buys the EV, it helps get EVs get launched. That's why I like this idea, it opens EVs up to people for whom the tax credit was nearly useless.

I'm not anti-business per se, but thinking about the experiences of the Californians that were stressed about fleets and business trucks draining the CA program. These pots of money tend to be finite and I'd much rather see many thousands of EVs in "soccer moms" hands rather than a single purchase from GE.

 

[SteveInSeattle]

This is not going to become law very quickly, the government is at a complete budget stalemate between Republicans and Democrats. In addition it doesn't incentivize anything for a few years since the entire production of both Leafs and Volts will sell under the current system just fine. This needs to be in place in 2013 when production ramps up enough that supply exceeds demand and then the instant rebate will be needed to increase sales. I doubt anything will change for anyone who is already in the queue.

 

[BudRaymond]

The bad thing about this idea is that, other than helping lower income people affort a Leaf, it also results in giving rich people free money they don't need. The way the current system is structured prevents people who are well off enough to be paying the AMT tax from getting the EV rebate.

The one good thing about it is the rebate is given right at the time of purchase. For a lot of us it is a hardship to wait up to a whole year to get the $7500 back.

Overall I would say keep the current system rather than allowing rich people from profitting from this.

That's incorrect, as I understand it. The EV purchase tax credit is not limited by the AMT. The EVSE (home charger, alternative fueling equipment) credit IS limited by the AMT. I'm guessing that is where the confusion comes from.

Nowhere on form 8936 does it say not subject to AMT. All tax credits are subject to AMT, depending on income level.

 

[LEAFfan]

For a lot of us it is a hardship to wait up to a whole year to get the $7500 back. Overall I would say keep the current system rather than allowing rich people from profitting from this.

For a lot of us, we couldn't even receive the full tax credit, even if we had to wait almost a full year. So it would definitely help a lot of us to have the rebate to purchase the car.

 

[mxp]

This confirms that anyone subject to AMT can still claim the full credit.

Quoted:

"... Other advantages to the plug-in tax credit:

Taxpayers who pay the alternative minimum tax are eligible. A few years ago, some taxpayers who purchased hybrids were dismayed to discover that, because they owed the alternative minimum tax, they couldn't claim the credit. (The alternative minimum tax is a parallel tax system designed to prevent wealthy taxpayers from avoiding tax.) In addition, some taxpayers who were close to the threshold for the AMT saw the amount of their credit reduced.

That won't happen to taxpayers who buy plug-in vehicles, says Mildred Carter, federal analyst at tax publisher CCH. Taxpayers who are subject to the AMT can claim the full credit, she says..."

http://www.usatoday.com/money/perfi/columnist/block/2011-03-14-tax-credits-for-hybrids.htm