Bill H.R. 6899 passes House

[AZEqualizer]

http://blogs.cars.com/photos/uncategorized/2008/02/18/taxrebatemoney.jpg

H.R. 6899: (http://www.govtrack.us/congress/bill.xpd?bill=h110-6899) Comprehensive American Energy Security and Consumer Protection Act has passed the House and now is on to the Senate.
Buried in the bill is a section that details a tax credit for “New Qualified Plug-In Electric Drive Motor Vehicles.” according to KickingTires Blog. (http://blogs.cars.com/kickingtires/2008/09/plug-in-tax-cre.html)

The credit kicks off at $3,000, and for every kilowatt hour of the battery over 5 kwh, it goes up $200, to a maximum of $5,000. That means the Chevy Volt (http://blogs.cars.com/kickingtires/volt/) — at 16 kwh — would get a total tax credit of $5,000. No other automaker has officially announced a plug-in electric vehicle for sale in the U.S.
This new credit will have an identical lifespan — 60,000 vehicles per company — as the original tax incentives for non-plug-in hybrids, with a similar reduction plan that reduces the credit by 50% and 25%, then down to nothing. The credit would go into effect after Dec. 31, 2008.
There are a number of restrictions we list below that are pretty cut and dried — very dry. See the article for details.

[ziggy951]

Back down to $20k now? MMM I like.



Z

[Mark Tomlinson]

Do I misunderstand? A tax credit only reduces your taxable income, it's not a check the IRS sends you. So a $3000 credit (for instance) on a $25,000 Venture One does not mean you only spend $22,000 on the vehicle. It would mean you get a slightly larger refund. (Don't get me wrong, I'll take it!)

Or am I confused? (About the tax code? Nah!)

[Jack Willard]

Comprehensive American Energy Security and Consumer Protection Act has passed the House and now is on to the Senate. ... The credit would go into effect after Dec. 31, 2008.

Okay, now it will get stuck in the senate. Yeh, WAY after Dec. 31, 2008. A lot of good that will do! Oh what the heck. There's nothing to use it on for a couple of years anyway.

Besides, I like that $7,000 credit idea better!

Ya cheapskates! =y:

I want more, more, MORE! gath:er:2 bang:h:1

[jglix]

To MT:
I believe a tax credit is added to the taxes witheld from your checks when you do your taxes. So it would increase your return by the amount of the credit. It is money in your pocket but not until your return is processed.

[Jack Willard]

Hey "jglix", wel:l)

[ziggy951]

Yeah what Jglix said. It is a literal check written by the government and addressed to you. It is given after you file for taxes however. It is a check you receive but it is given to you after the sale and after your taxes are filed...so dont be the guy/gal that buys the 60,001 vehicle and expect to get that $$.
o:o:p:s12



Z

[rosesj]

Its actually a check written by ME to you... to do what everyone says you should be doing anyway. But in return, I will most likely tighten my business model, and let you go, and everyone of your co-employees will be required to pick up the slack of your absence. But hey... you will then be able to drive your EV to the unemployment line. 2thumb:up

Gotta love a tax system which punishes success and rewards doing less.

[Miracleman89]

Its actually a check written by ME to you... to do what everyone says you should be doing anyway. But in return, I will most likely tighten my business model, and let you go, and everyone of your co-employees will be required to pick up the slack of your absence. But hey... you will then be able to drive your EV to the unemployment line. 2thumb:up

Gotta love a tax system which punishes success and rewards doing less.

Rosesj- everyone pays taxes!!!! It isn't just you that is paying for it get over yourself! Most likely, a person getting this tax credit has already paid more then that into taxes!

[Derwin]

rosesj..... How is a tax break taking money away from you or tax payers in general? That simply does not make any sense. I'm all for tax credits, tax breaks, tax refunds, or anything the government wants to do to give us our money back!

The smaller the government, the better. The lower the taxes, the better. If the government wants to give people a tax CREDIT if they wear a blue suit with a pink tie every third Sunday, guess what? I'm going out to buy a new suit and tie!

It's when government starts redistributing wealth, and taxing us to death that gets me upset. But creating new ways for citizens to pay LESS taxes....that's great!

Derwin

[Mark Tomlinson]

To MT:
I believe a tax credit is added to the taxes witheld from your checks when you do your taxes. So it would increase your return by the amount of the credit. It is money in your pocket but not until your return is processed.
Thanks! Good news indeed. I was almost sure that it reduced your taxable income. But the words "tax credit" make sense when you explain it that way. So this means when I buy my $60,000 Tesla Model S and apply the $5000 credit (doing the math) I still won't be able to afford it. Oh well, at least it makes the V1 all that much more attractive.

Next question, does this tax credit expire in some number of years? My concern, of course, is that if it expires in or before 2011, it may be softened or not renewed at all before most of the PHEVs become generally available.

[rosesj]

Because...

When dealing with a specific outflow of spending, there must be an inflow. When taking that inflow and redistributing it, they are NOT simply NOT taking money from you... they are getting it from somewhere else. As a Tax Credit, it could, depending upon your income, actually come back to you as an overage. ie if it is in the form such as the EIC or Child tax credit, people who pay NO TAXES actually get money from the government. Where does the money come from???

They should simply say there will be NO TAXES on those vehicles. THAT would be fair to everyone. But what they are saying is that they will 'write you a check' which, if you didn't already pay that amount of taxes to begin with, will result in a difference being given to you. Simply because you were smart.

I am NOT against NOT taking the money, I am against REFUNDING the money. They shouldn't take it in the first place. Most here might pay more than the Credit... that is fine, so they are simply 'not paying' taxes that year, or at least not as much.

So MM... say you have to pay $4k in taxes for the year you buy an EV. You get a tax credit of $5K. YOU pay NO taxes..., but still get all the benefits of the government in ADDITION to $1K of 'someone else's' tax payment. Simply so you can drive around in a car of your choosing.

Where does the money come from to pay for 'your part' of the military, congress salary, Welfare, healthcare, etc etc etc.?

AND how much MORE do you think it COST for the government to take that money from someone... pass it through a bunch of red tape... just so you can get that $1K check back in the spring? Certainly MORE than the $5K benefit YOU directly recieve.

So... you want me to get over myself... I want YOU to get off my financial BACK

[rosesj]

You know guys.... I just read my reply.


I am sorry.... I know everyone works hard for their money... and it is a VERY touchy subject for me.

I will try to refrain from posting this sort of stuff in the future. It does no good, and only works to bring people down.

In fact, we have much MORE in common than different.

This isn't a political site, I will endeavor to maintain decorum and at least keep my taxation views in check.

[Miracleman89]

With all due respect Rosesj right now your money is going to china and the government is borrowing more to pay for my tax credit. I sure that by the time it is all said and done I will have paid my share of the tax credit several times over, as I am sure you will for your tax credit!

As for your last post we here thank you and I look forward to your continued activity at this club!

[Derwin]

When dealing with a specific outflow of spending, there must be an inflow. When taking that inflow and redistributing it....

I am totally and completely against ANY form of wealth redistribution, no matter how good and lofty the ideas may sound. But I don't see how a tax credit has anything to do with redistibuting money.

There was a stimulus package that President Bush signed a while ago which gave people a refund of a portion of their taxes. Some people got back $1200 or so and others got back around $600 or so (I don't recall the exact numbers). But you had to pay taxes in order to get this money back. The government was not simply sending a check to anybody and everybody on the tax rolls. I know of some people who's income, and therefor their taxes, did not add up to enough to qualify for this refund, and did not get a check. I also know of people that made TOO MUCH money (I think the cut-off was around $80,000), and did not get a check.

I don't think people who pay no taxes at all, or pay UNDER the amount considered as a TAX CREDIT, with be getting a check from the government. If you have a tax burdon of say $20,000, and you have get a tax credit for $5,000, then you would only owe the government $15,000. But if your tax burden were $4,000 for the year, and you got a $5,000 tax credit, I would think your $4,000 tax burden would be wiped out. And you certainly would not get a check from the government for $1,000! That would be simply insane if it were true, but I really do not think that is how it works. If you can show me proof positive that this is the case, than I agree 100% with you, and would be completely against it. But I highly doubt it.

Again..... No redistribution of wealth. Simply a tax credit for those that pay taxes. Nothing more. Nothing less. Am I wrong? Let me know.

Derwin

[SafetyMan]

HMMMMMMM. The operable word is "Credit" You are given a credit against the taxes you owe, Not a refund. So if you owe $10,000 income taxes for 2009 and you qualify for a $2000 credit than your adjusted taxes owed for 2009 is $8,000. Now start your deductions charities ,etc. and you reduce your taxes even lower. BUT, you never get a check for taxes you didn't pay - only for over paid taxes.:confused:
Now let's get back to VV talk Dagna or other green machine talk- PLEASE!!!!

[Derwin]

SafetyMan....THANK YOU! This is exactly what I thought. The government is not sending checks to people that don't pay taxes. It's a TAX CREDIT, not a free check from the governement!

Now let's return to our regularly scheduled program!

Derwin

[rosesj]

I am totally and completely against ANY form of wealth redistribution, no matter how good and lofty the ideas may sound. But I don't see how a tax credit has anything to do with redistibuting money.

There was a stimulus package that President Bush signed a while ago which gave people a refund of a portion of their taxes. Some people got back $1200 or so and others got back around $600 or so (I don't recall the exact numbers). But you had to pay taxes in order to get this money back. The government was not simply sending a check to anybody and everybody on the tax rolls. I know of some people who's income, and therefor their taxes, did not add up to enough to qualify for this refund, and did not get a check. I also know of people that made TOO MUCH money (I think the cut-off was around $80,000), and did not get a check.

I don't think people who pay no taxes at all, or pay UNDER the amount considered as a TAX CREDIT, with be getting a check from the government. If you have a tax burdon of say $20,000, and you have get a tax credit for $5,000, then you would only owe the government $15,000. But if your tax burden were $4,000 for the year, and you got a $5,000 tax credit, I would think your $4,000 tax burden would be wiped out. And you certainly would not get a check from the government for $1,000! That would be simply insane if it were true, but I really do not think that is how it works. If you can show me proof positive that this is the case, than I agree 100% with you, and would be completely against it. But I highly doubt it.

Again..... No redistribution of wealth. Simply a tax credit for those that pay taxes. Nothing more. Nothing less. Am I wrong? Let me know.

Derwin
Actually Derwin, the stimulus requirement was NOT that you had to pay taxes, it was that you had to have filed an income tax return. Approximately 50% of the US adult population does NOT pay any income tax. And yet, they all recieved (or most) the stimulus check. The only people who could NOT get the check were those who made too much money. The people who paid FOR the stimulus checks couldn't get one themselves.

THAT is as much of a wealth redistribution as there could POSSIBLY be.

Rosesj... we have arbitrarily decided you make too much money, so we are taking it from you... XYZ... you don't make as much, so in order to 'stimulate' the economy, we are going to give you a piece of rosesj work day/week/month (but not the headache, potential lawsuits, nights without sleep) because his education allows him to be productive whereas your's or your choices do not.

[rosesj]

Safetyman... the credit works as you say as long as the amount you pay is GREATER than the amount you get in the form of the credit. However, as with EIC, people routinely get money BACK on the 'taxes' that they didn't pay in the first place, simply because of the credit redistribution. If they didn't, I would be all for it. I have no desire to tax those who have very little income. BUT, I don't want to directly or indirectly subsidize them either.

[RAN]

Rosesj...... Bingo!

[Derwin]

rosesj.... Here is a breakdown of the stimulus package:

SINGLES:

Determine Eligibility:
If you earned less than $3,000 - unfortunately you’d get nothing.
If you earned more than $3,000 but paid no taxes, you’d get $300.
If you earned more than $3,000 and paid taxes, you get $600.
If you have children, add $300 per.
Determine Phaseout Reduction:
The phaseout levels begin at $75k and end at $87k, at a reduction of 5% per $1,000 over the lower limit. If you earn above $87k, you’re over and thus get nothing regardless of the math.

COUPLES:

Determine Eligibility (appears to be the same as singles):
If you earned less than $3,000 - unfortunately you’d get nothing.
If you earned more than $3,000 but paid no taxes, you’d get $600.
If you earned more than $3,000 and paid taxes, you get $1,200.
If you have children, add $300 per.
Determine Phaseout Reduction:
The phaseout levels begin at $150k and end at $174, at a reduction of 5% per $1,000 over the lower limit. If you earned above $174k, you’re over and thus get nothing regardless of the math.[/quote]

So, "everybody" who fills out a tax form did NOT get a check from the stimulus package. But you are correct in that if you earned more than $3,000, you would get a $600 check from the government, even if you paid no taxes. This is indeed wealth redistribution, and it's not right in my opinion.

I do have a question, though..... How is the "tax credit" going to work? Does anybody know EXACTLY how this will be put into action? Will people get a $5,000 check from the government even if they didn't pay any taxes at all? Or will $5,000 be deducted from a persons tax liability? Which, of course, seems more reasonable to me. But who ever accused the government of being resonable!

Derwin

[rosesj]

I am totally and completely against ANY form of wealth redistribution, no matter how good and lofty the ideas may sound. But I don't see how a tax credit has anything to do with redistibuting money.

I know of some people who's income, and therefor their taxes, did not add up to enough to qualify for this refund, and did not get a check.

If you can show me proof positive that this is the case, than I agree 100% with you, and would be completely against it. But I highly doubt it.

Again..... No redistribution of wealth. Simply a tax credit for those that pay taxes. Nothing more. Nothing less. Am I wrong? Let me know.

Derwin

First of all... the first part of the quote about knowing someone who didn't make enough money is incorrect. I can't explain how or who you know couldn't get a stimulus check, but the reasons you state are incorrect. It is simply not the case that only people who paid taxes got the check.

Second... here is the IRS quote... I am looking for more specific information that more clearly states that EIC gives you MORE money than you pay, but haven't found the site yet. This quote is straight off the IRS site...

"Q1. What is the Earned Income Tax Credit (EITC)?

A1. The earned income credit (EITC) is a tax credit for certain people who work and have low wages. A tax credit usually means more money in your pocket. It reduces the amount of tax you owe. The EITC may also give you a refund."

http://www.irs.gov/individuals/article/0,,id=96466,00.html

I will find the place where it spells it out more clearly.

[rosesj]

Where did you get the information about lower limits getting nothing... I have never seen that before. Not that I have seen everything.


Ahhh... I found it... I was incorrect. There absolutely was a $3k lower limit. I stand corrected.

[rosesj]

Here is MORE information on how 'Tax Credits' work... the Advance EITC...

Where people can recieve a portion of the tax credit IN ADVANCE each and every month. It is redistributing wealth each and every month.

Q1. What is the advance Earned Income Tax Credit (Advance EITC)?

A1. The advance EITC allows taxpayers who expect to qualify for the Earned Income Tax Credit (EITC) and have at least one qualifying child to receive part of the credit in each paycheck during the year the taxpayer qualifies for the credit. The credit is sometimes called the AEITC.

http://www.irs.gov/individuals/article/0,,id=96515,00.html

Here is an interesting site concerning redistribution.

It is a calculator from the IRS used to estimate the amount of EITC payments 'you' for which you might be eligable.

http://apps.irs.gov/app/eitc2007/SetLanguage.do?lang=en

I used a single person with 2 children and $5K income... Payment is $2010

Maxes out at $12K income a year with a payment from EITC of $4710

And only begins to diminish after you make $16K/yr.

I am NOT saying that these income levels are enough to provide for a family. I am simply saying that THIS TAX CREDIT is the most blatant form of wealth redistribution.

As the bill stands now, the credit would work in a similar fashion.

[Derwin]

Well, all I can say is if the government is actually GIVING money to people simply for buying a certain car, or any other item, then this is wrong. I think giving people a TAX CREDIT is a GREAT idea. If the government wants to promote the sale of new technology items or alternative fuel vehicles, then giving people a tax credit to stimulate the sale of the items is fine. But it would be a "credit" toward what people owe on their taxes. People who had no income, or who actually owed less taxes then what the credit would be, should not get a free check from the government. That is wealth redistribution. We do not want that in America in my opinion.

This thread is specifically about bill hr 6899. Does this bill give money to people simply for buying a certain type of vehicle.....even if they don't have a tax liability? Or, does this bill simply allow people a CREDIT toward their taxes? This is a very simple question, and should have a very simple answer.

Derwin

[rosesj]

(e) Treatment of Alternative Motor Vehicle Credit as a Personal Credit-
(1) IN GENERAL- Paragraph (2) of section 30B(g) is amended to read as follows:
‘(2) PERSONAL CREDIT- The credit allowed under subsection (a) for any taxable year (after application of paragraph (1)) shall be treated as a credit allowable under subpart A for such taxable year.’.
(2) CONFORMING AMENDMENTS-
(A) Subparagraph (A) of section 30C(d)(2) is amended by striking ‘sections 27, 30, and 30B’ and inserting ‘section 27’.
(B) Paragraph (3) of section 55(c) is amended by striking ‘30B(g)(2),’.

According to US Gov Accounting office, " shall be treated as a credit allowable under subpart A for such taxable year." would be a direct insertion into the 1040 as a direct 'decrease' in tax liability, such that any overage would come back to you as an 'overpayment' of taxes, in a similar way as the EITC or any other Tax Credits... such as Solar/use of certain fuels, high efficiency heat pumps etc.

http://www.govtrack.us/congress/billtext.xpd?bill=h110-6899

[rosesj]

People... don't forget though... this is a TAX CREDIT. YOU would still have a 'loan' for $25K you would be paying on. NOT $20K... You gotta be careful how you think about this kind of thing. It is something like 'rebates' in the retail industry. They suck you in thinking that it only cost me $9.99 for this widget... but I forgot that I lost the reciept and never sent it in, so it actually cost $29.99.

This is a bit different, but don't think that you are ONLY paying $20K... you are still paying $25K... you are just getting some back on the other end.

My thinking would be that they should simply have NO TAXES on the items they want to encourage you to buy. NO TAX on a Plugin Hybrid would be GREAT. That would IMMEDIATELY decrease the IMMEDIATE cost of the vehicle... and instead of $25K PLUS TAX or $27K loan... you would be paying $25K. ahh..... but the Government can't manipulate us in the RIGHT way, because its form of taxation isn't so transparent. We have an INCOME tax, not a consumption tax.

If the Government really wanted to change things and be able to HELP US to make better choices, they could do it so much better with manipulation of a consumption tax. They could specifically exclude certain things from the consumption tax such as Hybrids... thereby giving them an advantage and us an incentive to buy them.

Tax Credits actually benefit the lending institutions more than anyone else. They end up giving you a 'loan' on the amount of money you finance which typically includes a loan on the 'tax' you have to pay. Unless of course you pay cash. So even though you might get $5K 'back' from the government... you are STILL PAYING INTEREST on that $5K to the bank. Nice little 'bank incentive'...

[ziggy951]

Because...

When dealing with a specific outflow of spending, there must be an inflow. When taking that inflow and redistributing it, they are NOT simply NOT taking money from you... they are getting it from somewhere else. As a Tax Credit, it could, depending upon your income, actually come back to you as an overage. ie if it is in the form such as the EIC or Child tax credit, people who pay NO TAXES actually get money from the government. Where does the money come from???
So... you want me to get over myself... I want YOU to get off my financial BACK


Hmm. If I would guess Rosesj....you are a supporter of the Fair Tax like me? Or at least something like it? If you..or anyone else is unfamiliar with the Fair Tax proposal then read up on it. It isnt perfect but I think its a whole hell of a lot better than the stuff we have to deal with at present time. It would make it far easier to implement what you talk about to in post #27. I suggest getting the "summary text" first rather than jumping right into the 136 page tax code document.

www.fairtax.org




Z

[rosesj]

Hmm. If I would guess Rosesj....you are a supporter of the Fair Tax like me? Or at least something like it? If you..or anyone else is unfamiliar with the Fair Tax proposal then read up on it. It isnt perfect but I think its a whole hell of a lot better than the stuff we have to deal with at present time. It would make it far easier to implement what you talk about to in post #27. I suggest getting the "summary text" first rather than jumping right into the 136 page tax code document.

www.fairtax.org (http://www.fairtax.org)




Z

I am absolutely a supporter of the Fair Tax. And yes... it is not perfect, but I agree that it is the most fair form of taxation in which production and productivity is encouraged rather than punished. It also allows for the encouragement of savings, charity, and saves a HUGE amount of money spent by the Government in the simply act of GATHERING the tax and redistributing it in the first place. I would be all for a pure consumption tax. I would pay MORE tax, because I buy MORE STUFF. I would be ENCOURAGED to buy MORE STUFF, thereby creating MORE JOBS.

As it is... I am encouraged to try to figure out how to NOT pay taxes by looking through the huge tangle of loopholes and financial crap.

I wouldn't even care where they draw the line for the Prebate. Make it whatever they want, just make it and let me pay taxes according to what I buy and use... not according to good I am at my job.

[rosesj]

How many days a week should ANYONE work strictly for the Government?

[Derwin]

How many days a week should ANYONE work strictly for the Government?


I don't think we should work 1 minute for the government. It's my opinion that they should abolish the income tax altogether, but we all know that will never happen.

But let's get this thread back on subject. I, along with other admins, don't want this discussion going on as it is. Let's get back to the discussion about Bill HR 6899. That is what this thread is about. Any comments that are posted from this point forward that are NOT ON SUBJECT, will be deleted.

Thanks for everybodys cooperation.

Derwin

[ziggy951]

Every day....if they are in a public office :)


Z

p.s. NP Doc.

[lil_k9]

Another Energy Bill passed today, Sep. 23. The bill passed in the Senate and it contains a bigger tax rebate for PHEVs and for a longer time frame.

http://www.autobloggreen.com/2008/09/23/breaking-senate-passes-phev-legislation/

That's how I found out about it, but in doing more searching I found a good description of all the bill's contents.

http://earth2tech.com/2008/09/23/what-you-need-to-know-about-the-senate-energy-bill/