I had a friend call me the other day and he only calls when he's mad. You know the perfect world guy, his hair is in perfect shape, his clothes always pressed, and women fall for him like he can get them into heaven. Well he's upset, raging mad and I figure that maybe he got tricked into another 1 arm 89 year old with his online dating service. No, instead, we'll call him Gregg, we'll he's pissed b/c his company took away their discount to employees. Mind you its not enough for him to turn the A/C off at the house to make ends meet but he simply cannot understand why you would **** off all your employees who will just now bad -mouth you even more, since no one is happy to work there in the first place. And since the company is probably more expensive than the competition, well these employees have been waiting to switch anyway, more so than when "boy George" was 3 years old and realized his grass would be greener on the other side. "It makes no sense" Gregg proclaims. So is it to save money? No, not at all, we are doing well. Hmmmmmmm, did ya'll steal anyway even though it was a discount? No, that wasn't possible (no one ever steals from their business). So what was the reason" " Well they did it b/c they felt even though we were profitable, it would help our profits more if we got rid of our discount". Well yes, that makes sense right? I sometimes wonder how all these company CEOs and CFOs and the Board of Directors have more degrees than the sun and more training and expertise than anyone besides God himself, yet they make, time after time again, the dumbest decisions ever. Its amazing. And they all have to look at each other and say "Don, that was a splendid idea, we'll sit still and rest on our laurels while the competition just beats us silly".

Which brings me to these same people who run our government. There is a tax credit and a pretty damn good one. You can see it here
http://www.fueleconomy.gov/feg/tax_hybrid.shtml
Basically there is a list of hybrids and this year, you get a $2000 credit (nothing to sneeze at) but instead of going UP to ENCOURAGE the building and selling and investment and buying of hybrids, well the credit goes down to $500 in 2006. And like Barry Sanders in Football, the credit is gone in 2007.

Amazingly, our president, which clearly knows everything about energy and oil since that is how his family became multi-millionaires, along with his vice-president, had a speech today
http://news.yahoo.com/s/ap/20050615/...NlYwMlJVRPUCUl
With a 4 part goal. One of them is conservation. Now lets see here. Hybrids offer more fuel economy and less emissions. In some cases better performance. No-brainer right? Well how can this tax credit just evaporate in thin air?

Mind you speaking with emissions, cleaner air from hybrids, even if its not enough to effect the room the size of jail cell, is still helping everyone, not just the owner. And instead of waiting my entire lunch break behind a car/SUV/truck as they full up for gas, the hybrid is just friendlier there too.

I won't bring up the tax credit for SUVs weighing over 5,000lbs though. Its a loophole that is obvious but stays open, where u can write off maybe 20k off the price of it. And clearly, that is encouraging.

As I write this, my Congressman is next. I just hope he knows what a hybrid is and even better, even with all 19 degrees, he can figure out how to open the e-mail.

 

U know if I was an auto company, I would PUSH to build hybrids than push my Government to keep the credit. Then push my salesmen to use it as a selling tool.

If someone can explain why we should get rid of the credit, I am all ears.

 

Welcome to the wonderful world of tax codes where everything fluctuates year by year. Even the child tax credit is supposed to drop from $1000 to $700 per child this year. Keep in mind the year is not over and congress has a habit of making drastic changes in the tax law as we get closer to the end of the year.

BTW, that 6000 lb vehicle deduction (it allows for a first year deduction of up to $25,000 the first year and then has regular depreciation over the next 4 years instead of depreciating the vehicle every year over it's life span) helps thousands of entrepreneurs every year. Everyone from landscapers to construction workers and contractors. The start up cost for most of these people are more than they could usually afford but that tax break gives them the extra money they need to keep going after the first year. Don't knock it. It helps many people start their own business and stay out of the unemployment line.

If anyone wants a better explanation instead of reading a piece of propaganda feel free to ask.

 

Back on subject. In 2003 there was an energy bill that was passed in the House but stalled in the Senate that would have been good for up to $10,000 in tax rebates for hybrid vehicles. No current legislation has been proposed to extend or revise the law phasing out the current rebate. I'm sure someone will propose legislation for extending the rebate before it fully phases out.

 

Agreed, this large vehicle business use tax break can be a big help to small businesses. But, unfortunately, it's abused by even more business owners who don't have a true business-related need for such a vehicle. I personally know of 5 business owners who have used this loophole (and probably just aren't aware of others I know who have used it). Only one of the 5 runs a business that truly needs such a large vehicle in its assets. I'd be much happier if the tax break was somehow restricted to those who really need such a behemoth to operate.

As for the current administration not upgrading or at least continuing the current tax break for hybrid buyers. I'd love to see them do it, but I would not hold my breath. But, if the democrats were in office, I don't know that we'd see this change unless it became a media issue. If I were in the market for a new car, possible hybrid tax breaks would certainly be an influence in what vehicle I purchase. I wouldn't think the auto industry would push for hybrid tax breaks since there are only a handful of them available influencing buyers with tax breaks would make the majority of cars somewhat less attractive to at least some buyers.

 

If there is a tax credit, it should be a credit for cars that get a certain gas mileage.

Why give a credit to the Highlander Hybrid, RX400h, and GS450h when they get worse gas mileage than many small economy cars?

 

Why should only people that buy small economy cars get tax credit ?
You mean only those who are single or don't need a larger car for the family like an SUV for practical reasons deserve to have tax breaks ?
Tax credit should be given to cars in all classes & sizes that uses the most enviromentally friendly technology in it's class.

 

Well, it's my opinion, but I feel that IF there is a credit, it should be given to people who buy more gas efficient 4 cylinder cars, rather than buyers of SUVs like the RX400h and luxury performance sedans like the GS450h.

But you know, I believe that we should do away with ALL deductions and credits, and have a simpler progressive tax system with lower rates. Let the market determine how people will earn and spend their money, not special lobby groups in Washington.

 

In combination with emissions. The orginal tax credit was basically a subsidy for the Prius and Civic hybrid. With many other type of ways to propel a car the tax credit should be technology neutral. The main point is to get people to use less fossil fuels. One of the easiet yet least popular is to raise the tax on fuel.

That's the problem with a subsidy - regardless of how it got started (I wonder how much it cost Toyota and Honda in lobbying fees) you'll get lots of complaints when there's a threat to cut it off.

 

The orginal tax credit was made in 1992 and was designed to give a $4000 tax credit to cars that were fully electric with no gasoline engine. The IRS was a little fluster when hybrids started being produced and allowed people to take half of the original tax credit since the cars were half electric and half internal combustion.

 

Well, this alone may not be reason to do away with it, but having that Federal tax credit has been just one more excuse for dealerships charging additional mark-ups on these cars ( besides simple supply-and-demand, of course ). They can argue that, hey, you're getting part of it back anyway, (but usually not all ) so why complain? So....it can end up contributing to the dealer's profit more than yours.

 

I don't think that luxury hybrids should be eligible for the credit. Not only because they don't/won't get terrific milleage, but also because such purchases are purely discretionary.

M.

 

My take on the rebate for the 400h is that it is a luxury car. Nonetheless, whoever buys one can pay for it... Now i know it is a uniformity and i agree with the tax rebate, which is why i purchased a 2006 RX400h on December 31, 2005. They said something about it decreasing which is why i bought it the last day of the year. On Lexus's website, it says it has been increased to $2400 or is that just speculation? If it has dropped i am glad i bought it in 2005. But the thing is, is that that is an added incentive to buy a hybrid. If that incentive is gone, people might not buy it except for the gas prices. For me the $2000 is just a way to make it look like the buying of a hybrid is more worth it because, at least for a 400h, you wont make up those $7000 in gas costs.

So is it going to $500 or is it going up to $2400?

Mink92890

 

To answer your last question - easy. But more seriously, the tax credits were to help offset the resistance against the 'newness'/uncertainy and higher cost of hybrids. And they only apply to the first 60K units of each model anyway I believe. Well now that they're more popular (some say) than Paris Hilton's videos, there's no need for the incentives. Toyota can't meet the demand for Prius'es and tax incentives won't help them build more.

Bottom line, incentives aren't needed any longer. The price premium and concerns over hybrids are diminishing each day.

 

well actually, SUV Hybrid owners get a lot smaller Credit than Prius buyer.

Goverments insight into this is that customer would buy an SUV anyway so why not get more fuel efficient and even better, less polluting. Pollution is an big problem, especially in cities, where even RX helps a lot.

They did limit it to 60,000 buyers PER BRAND, which means Toyota (including Lexus) will run out by June. Which was the main purpose I would suppose :-).