Rest easy America, your government has appropriated $700b of your malaise-busting tax dollars to fix the economy… and fatten up a few pet projects. As Farago reports, auto loans were bundled into the “distressed assets” category, but that’s not the only handout the industry received just days after the passage of its own special bailout. The Detroit News reports that hidden away in the 451 pages of the “Extreme Bailout: Wall Street Edition” is nearly a billion dollars worth of consumer credits to buyers of plug-in hybrid electric vehicles (PHEVs). We’ve always preferred consumer-end stimulus to the production subsidies awarded last week, but apparently Detroit gets to have its pork and eat it too. And like the retooling loans, the tax credit seems tailor-made for Detroit. Under new rules, any PHEV with at least 4kw battery capacity would qualify for $4,168 credit, but (thanks to its serial-hybrid setup) the Volt’s high-capacity battery would make it qualify for the top passenger vehicle tax break of $7,500. Larger credits exist for vehicles over 10k pounds, but all credits expire after 250k qualifying units are built. With $7,500 off the top, state and federal production subsidies, and more hype than a David Blaine special, the Volt had better amount to something… other than a boondoggle.
A few other goodies somehow slipped in.
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* Economic development credit to American Samoan businesses
* $10,000 tax credit for training of mine rescue team members
* 50% immediate expensing for extra underground mine safety equipment
* Tax credit for businesses with employees from an Indian reservation
* Accelerated depreciation for property used mostly on an Indian reservation
* 50% tax credit for some expenditures on maintaining railroad tracks
* 7-year recovery period for motorsports racetrack property
* Expensing of cleaning up “brownfield” contaminated sites
* Enhanced deductions for businesses donating computers and books to schools, and for food donations
* Deduction for income from domestic production in Puerto Rico
* Tax credit for employees in Hurricane Katrina disaster area
* Tax incentives for investments in poor neighborhoods in D.C.
* Increased rehabilitation credit for buildings in Gulf area
* Reduction of import duties on some imported wool fabrics, transfers other duties to Wool Trust Fund to promote competitiveness of American wool
* Special expensing rules for film and TV productions
* Increasing cover of rum excise tax revenues to Puerto Rico and the Virgin Islands
* Making it easier for film and TV companies to use deduction for domestic production
* Exempting children’s wooden arrows from excise tax
* Income averaging for Exxon Valdez litigants for tax purposes
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Should that be 4kwH capacity? Kw’s are a rate, not a capacity (though I wouldn’t expect politicians to know the difference).
Should that be 4kwH capacity? Kw’s are a rate, not a capacity (though I wouldn’t expect politicians to know the difference).
Well, exactly! Come on, Ed! You’re not a politician, are you? Show that you share some of Pappa Paul’s DNA!
kWh is a unit of energy, like Joule, BTU, cal, etc.
kW is a unit of power, like hp.
What is to stop Toyota from putting a bigger battery in the Prius, adding plugin capability, jacking the price to account for the battery, and sucking up the 250K units before the Volt is produced?
Can’t wait to get my Volt!
Not a politician… a freelance writer. You decide which is worse.
From the DetN story:
“The provision would grant all-electric vehicles or plug-in models with at least a four-kilowatt battery pack a $4,168 credit. A vehicle like the extended range Chevrolet Volt with a 16-kwh battery would qualify for the maximum $7,500 credit for vehicles under 10,000 pounds.”
Should have caught the discrepancy there. As for DNA, I guess at a certain point it’s nice for a day to go by where you aren’t reminded that you’re turning into your parent(s). Thanks?
Qwerty,
Why, nothing at all.
You don’t suppose…?
So how does this tax credit thing work? I’ll get an additional $7500 refund tacked onto any tax refund come April 15th IF I have a tax liability large enough that it exceeds $7500?
If so wouldn’t that mostly favor people richer than I?
How about a flat out $7500 refund?
On another note it seems the Phoenix Motor Cars SUT recently jumped in price. Yeah, you guessed it – by $7500…
Whew! I am glad the movie makers got millions of dollars in the “rescue” plan, I was worried we wouldn’t have any new films.
Let’s see, the Puerto Rico rum producers are getting $190 million and the Detroit losers are getting a boatload, Great! the government just subsidized a hellava lot more drunk driving on our nickel.
We do have the best politicians money can buy, don’t we?