$7500 tax credit debate/discussion

[brianman]

fair share

No, that's last quarter's meaningless term. There's a new one now that I've already forgotten because I've tuned them out.

[bonnie1194]

How much is Bonnie paying each year?

http://www.350.org/sites/all/files/e...by_section.pdf

Holy @()*!!#*&!

[daniel]

Not to go TOO far off topic, but I don't think this is their call to make. Sure, some corporations skimp out when they can afford not to, but what about small businesses just trying to stay afloat? Minimum wage exists

Minimum wages are set by law. The legislature chooses whether to set it high enough to live on or not. Throughout history, employers have argued that higher wages will put them out of business, but in fact, fair minimum wages have always been good for the economy. The gap between rich and poor is greatest where minimum wages are lowest. And Santa Fe, NM, has a healthy and vibrant economy with one of the strongest (local) living wage laws in the country.

For me, it's a human rights issue: Nobody should be allowed to pay someone at a rate that is insufficient to live on, assuming a full-time job, or pro-rating accordingly.

And the strongest opponents of living wage laws are giant companies like Walmart, which treat their employees abysmally, fight unions tooth and nail, and rake in obscene profits.

I pay a great deal to subsidize the oil companies so others can drive ICE vehicles (those wars are expensive). If others had to pay the true cost of the gasoline that goes in the engine, we'd be having a different conversation (like 'does anyone still drive an ICE anymore???')

I agree 100%. We need to eliminate all subsidies on petroleum and tax it at its true cost, including oil-spill clean-ups and the full cost of oil wars.

I have the most fair and simple tax system: Do away with the IRS, income tax, corporate tax and many other taxes as excise tax etc. I propose a ballanced budget and a national sales tax.

A sales tax is the most regressive, placing the most burden on the poorest people. The wealthy benefit proportionally more than the poor from the economic and social system. It is only fair that they pay their fair share. That's why we have a graduated income tax. In theory, the greater your income, the higher percentage you pay. In practice, because the laws are written to favor the rich, they pay less than they should.

Example: Wages earned by labor are taxed at roughly twice the rate of income gotten without labor. (Capital gains).

I say we should keep the graduated income tax, but eliminate all exemptions, deductions, etc., and tax capital gains at the same rate as wages, if not higher. The 1040 would have about 4 lines on it: What was your income? Look up your tax on the graduated rate table. Enter the amount. That's your tax.

BTW, I pay a bucketload of money in taxes, and I hate doing it. But I recognize that it's the price I pay for living in society. My complaint is not that I have to pay, but that so much of it is going to wars to subsidize the wasteful destruction of our resources and the planet.

[digitaltim]

Small countries could live off what my wife and I pay in taxes...no complaints, but believe a more fair system could be developed with a graduated sales tax. No tax on food/clothes below a certain cost per unit, but higher taxes on luxury or other discretionary goods/services.

Taxes on income are ridiculous.

[brianman]

Daniel, what's the motivation for the dependents deduction? And do you think it should stay in place or be eliminated as part of "all deductions"?

[ElSupreme]

I say we should keep the graduated income tax, but eliminate all exemptions, deductions, etc., and tax capital gains at the same rate as wages, if not higher. The 1040 would have about 4 lines on it: What was your income? Look up your tax on the graduated rate table. Enter the amount. That's your tax.

That is basically what I would do.

Income (line1 W2): 1 Million Dollars
Tax Witheld (other line W2): 1 Hundred Thousand Dollars
Tax Owed (lookup line 1, in chart): 4 Hundred Thousand Dollars
You Owe (subtract 2 from 3): 3 Hundred Thousand Dollars (sucks to be you)

[gg_got_a_tesla]

This is a question for any tax attorneys or CPAs in the audience: IF a new administration takes office and decides to revise the tax code to eliminate the $7500 tax credit on EVs at what point would you reasonably expect the revision to become effective? My understanding is it would take an act of Congress to revise the code (please correct me if that is incorrect) which takes some time. If they started Jan 1 what is a reasonable length of time for such a bill to pass? Then once passed is it more reasonable to assume it will be retroactive to Jan 1 or will take effect at the time it passes? How are such tax revisions usually implemented--immediately or retroactively?

These questions are directed at determining the probability of a "grace period" after Jan 1 during which the $7500 tax credit might still exists even IF a new administration takes over. There may be a number of us who are stretching for this car whose number will come up this year but would rather not buy the air suspension and/or 60 kwh battery. It would really help to better understand the probabilities involved in losing the tax credit by waiting to get what we want and can better afford. Thanks.

I have the same concern (posted here: Delaying Delivery of Model S / Waiting until other options become available).

The flip side would be if Democrats do a clean sweep and get around to making the tax credit a tax rebate up front at the point of sale let alone raise it to $10,000 as President Obama suggested, waiting may have its benefits!!

[Lloyd]

This is a question for any tax attorneys or CPAs in the audience: IF a new administration takes office and decides to revise the tax code to eliminate the $7500 tax credit on EVs at what point would you reasonably expect the revision to become effective? My understanding is it would take an act of Congress to revise the code (please correct me if that is incorrect) which takes some time. If they started Jan 1 what is a reasonable length of time for such a bill to pass? Then once passed is it more reasonable to assume it will be retroactive to Jan 1 or will take effect at the time it passes? How are such tax revisions usually implemented--immediately or retroactively?

These questions are directed at determining the probability of a "grace period" after Jan 1 during which the $7500 tax credit might still exists even IF a new administration takes over. There may be a number of us who are stretching for this car whose number will come up this year but would rather not buy the air suspension and/or 60 kwh battery. It would really help to better understand the probabilities involved in losing the tax credit by waiting to get what we want and can better afford. Thanks.

One repub congressman who has a vested interest in ICE manufacturing has called for removal of the credit. I was unable to find any instance of that being a party or candidate goal.

[Arnold Panz]

One repub congressman who has a vested interest in ICE manufacturing has called for removal of the credit. I was unable to find any instance of that being a party or candidate goal.

Issues like this generally aren't in either party platform because votes are much more often based on local economic pressures, such as whether petroleum/oil is a big industry in the area, or ICE vehicle production occurs locally, or EVs are made in the district (Volts and Teslas being two examples). As VFX noted, the original credit was put in place during a Republican adminstration with much bipartisan support, which is the same as the program that paid for Tesla's loan.

The highest probability is that nothing will happen on this one way or another (to increase it, make it an instant rebate or eliminate it) because it would require Congressional action, and Congress is so dysfunctional right now that virtually nothing can get through. This isn't a terrible outcome under the circumstances because there's just as good a likelihood of the credit being killed altogether as it being increased or made an instant rebate on the purchase price.

[strider]

This is a question for any tax attorneys or CPAs in the audience: IF a new administration takes office and decides to revise the tax code to eliminate the $7500 tax credit on EVs at what point would you reasonably expect the revision to become effective? My understanding is it would take an act of Congress to revise the code (please correct me if that is incorrect) which takes some time. If they started Jan 1 what is a reasonable length of time for such a bill to pass? Then once passed is it more reasonable to assume it will be retroactive to Jan 1 or will take effect at the time it passes? How are such tax revisions usually implemented--immediately or retroactively?

In my experience changes like this apply to the next tax year. So if in September, 2013 they eliminate the credit the earliest it could take effect is the 2014 tax year (Jan 1, 2014).