But will the progressives and greenies also support it?
In the 2008 bank bailout bill there was a rider tucked into it to support a plug-in hybrid vehicle tax credit. Now I am sure all of my readers are keenly aware of how this prescient act of government saved the financial sector and turned the tide against the Great Recession. I’d like to see how any defender of modern democracy can defend the procedural rules that allowed this to happen. But I digress. What does this credit do?
It allowed for a (refundable I think) tax credit of $2,500 when you purchase any such vehicle plus an additional $417 of tax credits for each kilowatt-hour of battery pack capacity in excess of 4 kilowatt-hours, up to a maximum of $7,500. As Andrew Morriss et al remind us, “these are somewhat peculiar numbers — why $417?”
The answer:
“the Chevy Volt has a 16 kWh battery, and $417 is the number necessary to provide it with the full $7,500 credit. ” Here’s where the fun part comes in. This tax credit, unlike typical tax credits, can be applied against the AMT. Remember the AMT? That is a tax that was slipped into the code in the late 1960s to make sure the rich pay their fair share. So what does this new electric car tax credit do? It makes the entire $7,500 of credits available to rich individuals who are the ones who can afford to spend nearly $50,000 for a Chevy Volt.
Morriss et al tell us that the bailout bill set aside $1 billion for the tax credit. Oh, and did I forget to mention that the bailout bill explicitly excludes the Toyota Prius. I am sure that this was just an oversight and not a gift to general motors. How do we exclude the Prius? Isn’t legislation NOT supposed to target particular companies or individuals? Right, and the Titanic was supposed to be able to withstand the hit of an iceberg. Well, the minimum 4kWh capacity was enough to exclude the Prius from the law. The Prius, in case it is not obvious, is very much cleaner than any electric car that has to plug into a coal fired electric grid to be recharged.
+1000!
And this gem:
Dr. Evil balks at paying his fair share | Wizbang
“Well, well … looky who doesn’t want to be bothered with the new reporting requirements of the Dodd-Frank Act:”
http://wizbangblog.com/2011/07/27/dr-evil-balks-at-paying-his-fair-share/
Excellent post. The blatant corporate favoritism shown to GM (Government Motors) in the past 5 years is almost unbelieveble. The environmental impact of the Volt, from recharging to battery disposal, is highly debatable.
I would be content if the income tax taxed you on your net income, and not any of your gross income. It kills me when the home mortgage interest deduction is characterized as a tax break favoring home ownership. Well, that’s only because ALL interest paid could be deducted against interest earned. That went out the window when, in the name of revenue enhancement, credit card interest became no longer deductible.
One should be also allowed to deduct business expenses, including travel and entertainment, from one’s gross income. The salesman on the road should not have to pay income taxes on any more than his net income, and a corporation should be allowed to deduct the cost (or depreciation) of things like corporate jets.
But if we are going to pick and choose what’s taxable and what’s not, how about doing away with tax-free bonds? That’s a tax break that encourages municipalities and states to borrow.
BTW, it really annoys me when I hear the talking heads on TV say that if the debt ceiling is not agreed upon by August 2, interest rates will go up because Moody’s will downgrade our debt. Folks, interest rates are going to rise way beyond a steenking 100 basis points (the Moody’s guy, Mr. Beers, predicted that degree of rise yesterday) because inflation is going to kick into high gear sometime very soon. Already baked in the cake is the inflation not yet realized from the Obama deficits and from QE one and two. Bernanke can’t make people borrow: it’s pushing on a string. But sooner or later the financial community, whatever that is, is going to wake up and demand that interest rates rise to a point that will overcome the effects of inflation. It is already true that it is absolutely insane to lend (not loan; loan is a noun, lend a verb) federal reserve notes to the United States for thirty years, which is what the supposedly really, really, smart Chinese have been doing recently. And if one lends short term to the US, well, there is hardly any return, especially after you subtract brokerage commissions. (What do the Chinese pay per bond when they buy, say, $500 million at a clip? Bonfire of the Vanities comes to mind, where Sherman explains to his son how he makes money: “It’s like there is a giant cake, and Daddy cuts the cake and gets to keep the crumbs.” University of Rochester students ought to consider either careers as investment bankers or as “bond counsels,” the lawyers who issue an opinion about the taxability of a municipal bond [they get one percent!])
I have a theory about all this: what better way to bail out all those borrowers of home mortgages than to inflate the currency and simultaneously allow the repayment of the loans in cheaper dollars and to inflate the value of the collateral? The only people who get screwed over are the rich people who own financial assets. Is that unthinkable?
[…] The Unbroken Window – I, Evil Freedom Lover, Support Ending This Tax Break for the Rich: “But will the progressives and greenies also support it? In the 2008 bank bailout bill there was a rider tucked into it to support a plug-in hybrid vehicle tax credit. Now I am sure all of my readers are keenly aware of how this prescient act of government saved the financial sector and turned the tide against the Great Recession. I’d like to see how any defender of modern democracy can defend the procedural rules that allowed this to happen. But I digress. What does this credit do? It allowed for a (refundable I think) tax credit of $2,500 when you purchase any such vehicle plus an additional $417 of tax credits for each kilowatt-hour of battery pack capacity in excess of 4 kilowatt-hours, up to a maximum of $7,500. As Andrew Morriss et al remind us, “these are somewhat peculiar numbers — why $417?” The answer …” Share this:ShareEmailPrintFacebookTags: Cars, GM, Government, Hybrids, UAW /* […]