Saturday, February 18, 2012

Just What We Need - A Five Digit Tax Credit For Wealthy People

Picking Winners, Leveling the Playing Field... How Propping Up and Supporting Clean Energy Is Backfiring on Obama's Game Plan.


    Unintended consequences. It's a interesting term, isn't it?  We all do things with certain expectations, but in reality the end game is much different that what we planned.  We are all pretty familiar with Barack Obama trying to push clean, renewable energy sources.  Sure, there are abject failures like Solyndra, but that probably wasn't much of a surprise. Solar home energy requires a huge initial investment.  However, their electric car initiative is creating a totally different consequence - one that flies right in the face of his tax credo of every paying their fair share...


    Above you see the Chevy Volt.  Pay no attention to our post from yesterday when it comes to this car.  Overall, GM is doing well, but the Volt is a loser with a capital L... The electric car, which also can run on gas, is a financial nightmare. It costs about $40,000, which puts the car out of many potential customers reach. The reason GM is making money,and not on the Volt, is the Chevy Cruze.. It costs less than half of the Volt, and gets a hefty 38-40 MPG. For the average driver, a Volt owner would have to drive it for approximately 20 YEARS to break even with driving a Cruze. Yeah, there's saving the environment, but what about saving people's pocketbooks??


   One trick the government uses to promote sales is tax deductions. The Prius used to get a $2500 credit when it came out.  Well, fully electric car like the Volt gets a whopping $10,000 credit.  Yeah, it helps, but if you're in the 15% tax bracket, your actual savings is only $1500... So, the question is "Who can afford to drive a Volt?".  The answer is environmental idealists. Rich environmental idealists.....


   The numbers back it up. It's not just a theory.. According to a recent study, the average salary of a Volt buyer is $170,000 per year. Let that sink in for a second..  OK, now let's reflect on the policy.  No, I don't think it was done intentionally, but the fact is that taxpayers are giving $10,000 tax credits away to some pretty well-off people.  In the time of promising to 'level the playing field', Barack Obama has a plan that flies directly in the face of it...


   In all honesty, the Volt needs to go the route of the Edsel, unless it can be produced for about 25% less than it is now.  We complain that Washington has a habit of trying to pick winners. That's not true... Washington has a long habit of picking LOSERS, and that's the problem.  The electric car tax credit was done with the best of intentions, we're sure. However, the benefits are going to people who don't need them - the exact people Obama rails against on a daily basis.  He wants 1 million of these cars on the road, which is about $10 billion in tax credits.  If voters knew the facts of this error, they'd freak.. We're sure they know, but they aren't talking. The best laid plans , right????


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3 comments:

Georgia Drivers Ed said...

This was a eye opening post for me, i haven't think down side of a great initiative of green tax credits.

Mike Reino said...

It caught us by surprise as well. We're all for increased fuel economy in cars, but electric cars aren't cost efficient enough yet. Getting hybrids or clean diesel still looks like the affordable alternative until we can get hydrogen to work.

Anonymous said...

Mike--there is one problem with hydrogen, that can best be summized in one word...Hindenburg. The volitility and combustiability of hydrogen has so far been the problem with making it a serious alternative to fossil fuels. While the idea of being able to take hydrogen from water and turn it into fuel has been around for some time so has turning lead into gold, at this point in time, it isn't practical...teg