Semi-OT - CBO: Electric cars are not cost-effective

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"At current vehicle and energy prices, the lifetime costs to consumers of an electric vehicle are generally higher than those of a conventional vehicle or traditional hybrid vehicle of similar size and performance, even with the tax credits, which can be as much as $7,500 per vehicle. That conclusion takes into account both the higher purchase price of an electric vehicle and the lower fuel costs over the vehicles life. For example, an average plug-in hybrid vehicle with a battery capacity of 16 kilowatt-hours would be eligible for the maximum tax credit. However, that vehicle would require a tax credit of more than $12,000 to have roughly the same lifetime costs as a comparable conventional or traditional hybrid vehicle."
http://www.cbo.gov/publication/43576?utm_source edblitz&utm_mediumedBlitzEmail&utm_content2526&utm_campaign=0
The report goes on to say that electric or hybrid cars do generate less pollution, and that's a plus. Inasmuch, though, as the electricity didn't miracle itself into the car, the report doesn't say anything about the pollution (if any) from the original generation of the power.
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wrote:

The problem with projections is gasoline price. Big question mark. You can find electric car vs gasoline energy efficiency. Electric is more efficient than IC engines even considering all power generation and line transmission losses. Pollution should follow suit. But fossil fuel power plants and IC engine produce different pollutants. Nukes are the only clean power if you discount disasters and waste. Steam is still the king of power. Wow.
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wrote:

Yup, and geo-thermal, wind and solar too. Forgot those. Was thinking about steam turbines.
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True.
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On 9/24/2012 1:48 PM, HeyBub wrote:

http://www.cbo.gov/publication/43576?utm_source edblitz&utm_mediumedBlitzEmail&utm_content2526&utm_campaign=0
I have the impression that buyers of electric vehicles know this, and aren't buying on the basis of economy, but on the basis of what they like/want/can afford. At least, that's what the ones who I know tell me.
If they're willing to pay a premium for the 'greener' concept and can afford to do so, I suppose it's no different than anyone else buying a vehicle on the basis of a preferred feature. I have a sister who only buys SUVs because she uses her vehicle as a travelling closet. She knows she's paying a premium in terms of fuel economy, but she loves a roomy vehicle to carry loads of junk around. I think it's stupid, she thinks it's great.
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What is different is that the taxpayers are also kicking in $7500 or more in tax credits.
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On 9/24/2012 4:47 PM, snipped-for-privacy@optonline.net wrote:

There was a longstanding tax credit for many years for small businesses (i.e. anyone troubling to take out a business license) to buy large SUVs. Originally the credit was $17,500, but it rose to $100,000 under the Bush administration.
By comparison, a $7,500 credit for a hybrid or all-electric car is small potatoes.
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The two are very different things. The one you were talking about was an accelerated DEPRECIATION program that let business owners depreciate a business vehicle weighing OVER 6,000 pounds faster than normal. So, it was NOT at tax credit, ie a direct handout. All they could do was depreciate the vehicle faster than normal. In the end, the govt should have wound up with about the same tax revenue, it just delayed when they got it. The business would have a bigger deduction than normal the first year, then smaller deductions in subsequent years. It was intended to help business owners buy large commercial vehicles, though as you say some very large SUVs also qualified. And to qualify for it, you needed to file a business tax return, have a real business, etc not just have a business license.
But it is another example of the unintended consequences of govt meddling. I'm sure, as you say, some business owners decided to move up to a larger vehicle to take advantage of the credit. That's what you would expect. And it's leads to economic inefficiency, just as the subsidy of electric cars.
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On Tue, 25 Sep 2012 05:11:05 -0700 (PDT), " snipped-for-privacy@optonline.net"

The flip side of that is if you depreciate the value of that truck to less than you sell it for, the IRS "recaptures" your depreciation.
You are right that this was just a deduction on the schedule C, not a credit like the electric car credit, big difference.
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On Tue, 25 Sep 2012 05:11:05 -0700 (PDT), " snipped-for-privacy@optonline.net"

It's really the other way around. The business pays the taxes on the income used to buy the vehicle up front, only to get it refunded in later years. Allowing the business to write off the cost sooner gives them the taxes back, on the money used to invest in their business, sooner. This is where Obama's $250K "rich guy" tax shows its real horns.

Or worse, "Cash for Clunkers".
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On Sep 25, 2:06pm, " snipped-for-privacy@att.bizzzzzzzzzzzz"

What exactly is the other way around? Accelerated depreciation works exactly as I stated. The business gets to write off a bigger portion of the asset sooner, typically in the year that they buy it.

Wrong. That's the whole point. They get to take a large deduction in the year they buy it, which results in the business paying less tax that year.

It doesn't give them the taxes back. It just reduces the tax, they pay in the early years, ie they pay less tax those years than they would if the truck were depreciated over a normal schedule.
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On Tue, 25 Sep 2012 13:47:23 -0700 (PDT), " snipped-for-privacy@optonline.net"

It is easy to spot the people who never filled out a business tax return huh Trader?
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On Sep 25, 8:51pm, snipped-for-privacy@aol.com wrote:

That's for sure. Or even an ordinary income tax return. Anyone who does knows that extra deductions REDUCE the tax you pay. You don't have to send the money in then get it back in some future year, as krw claims. That's the whole point of accelerated deduction. To give business more money in their pocket NOW and an incentive to buy the eqpt now.
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On Wed, 26 Sep 2012 05:00:05 -0700 (PDT), " snipped-for-privacy@optonline.net"

There you go again. Lies on lies.

Actually, you do. I'll spell it out for you, since you're dense as a stump, and a liar, to boot.
Assume sales of $200,000 Direct expenses -$100,000 Gross profit =$100,000
Now assume you buy a truck $50,000
Example #1 (Depreciation) With straight line depreciation -$7,140 deduction for the 7 years Taxable income $92,860 Tax (~$20%) $18,500 (year 1) Return (~20% of 7,140) $1,430 (years 2-7)
Example #2 (expensed) Assume the truck is expensed: -$50,000 Taxable income $50,000 Tax (~20%) $10,000
Result: By forcing you to depreciate the business expense, the IRS is taking $8500 the first year and giving back $1430 for six years.

No shit?! You really can't read. BTW, accelerated <> same year
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On Sep 27, 9:35pm, " snipped-for-privacy@att.bizzzzzzzzzzzz"

Since when is it a lie that extra deductions reduce the tax that either a business or individual pays?

It's interesting that you have to come up with your own example instead of using the one I already provided which is exactly the same thing, except for slightly different numbers that don't change a thing. I gave you the complete example and asked just a few simple yes or no questions. It would be helpful if you could follow along instead of going off each time in a new direction.
But let's use YOUR example above. As given, the business has depreciation on the truck of $7,140 in the year that they buy it. They wind up paying $18,571 in income tax as you show.
Now, let's look at the same example, but with ACCELERATED DEPRECIATION. Let's say that instead of straightline, they can write off half the cost of the truck the year they buy it. That would be a deduction of $25,000 instead of $7,140. They would have an income of $75,000 and pay an income tax of $15,000. So, instead of paying $18,571, they have paid only $15,000. That $3,571 stays with the business. It's less money that they send to the govt. IT's EXACTLY as both Gfretw and I explained it from the beginning.
You on the other hand retorted with:
"It's really the other way around. The business pays the taxes on the income used to buy the vehicle up front, only to get it refunded in later years. Allowing the business to write off the cost sooner gives them the taxes back, on the money used to invest in their business, sooner. This is where Obama's $250K "rich guy" tax shows its real horns."
Clearly per the above example, the business is not paying taxes on the income up front and then only getting it refunded in later years. With accelerated depreciation they keep that $3,571 to begin with. And it has nothing to do with Obama's proposed raising of taxes. Does everything, even a simple tax issue, revolve around Obama in your mind?

Say what? Forcing you? Businesses would LOVE to have accelerated depreciation on everything. And per this example, the business now pays only $10,000 in tax in the year that they buy the truck. That is $8,571 less than the example using straightline depreciation. I don't know in what convoluted Alice in Wonderland place you live where that equates to the IRS taking $8500 and giving it back over 6 years.

Really? If that's the case, then why did you just claim above that the business doesn't get more money in their pocket now, but it instead is money that goes to the IRS, only to return in future years? Geez....
And another thing. You obviously are clueless about accrual basis accounting. You think it's just some IRS ploy. It's not. It's been done for hundreds of years, before there even was an IRS. It's done to give a fair picture of the finances of a business by matching revenue with the associated expenses of producing that revenue. Without it, you would have wild swings in business income. If a business built a new factory one year, they would have a huge loss. Then in subsequent years, they would have abnormally high profits because the expense of the factory was taken all in one year instead of over 30 years.
And along the way, we have these other gems:
KRW: "The government gets the taxes on the profits made, up front, and then refunds it back over time, rather than allowing some magic "deduction" later. The taxes on the profit have already been collected. That's where people get caught up in the "rich get free deductions" trap.
What the hell does that even mean?
KRW: "Right, but the whole issue of a write off in future years is that the tax is collected UP FRONT on the profits, and then refunded on this year's expenses, in future years. "
Heybub, correctly: ">If you're starting up a company, you would not want to expense items your

KRW: " More examples of government forced suboptimization"
Wrong. It's just correctly matching revenue with expenses under the accrual system of accounting.
Then Gfretw and I pointed out that if you later sell a truck that is depreciated for more than the depreciated value, the business owes tax on it because it's treated as income.
KRW: "It's not a problem. The recapture is simply a differed tax payment.

Differed payment. "
Differed payment? What the hell is a differed payment? And you have the nerve to call me illiterate? Did you learn about "differed payments" the same place you learned about accelerated depreciation? Recapture is RECAPTURE and it's not a "deferred payment". Anyone who has filed a business tax return knows that.
Now feel free to dig that hole even deeper.
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snipped-for-privacy@optonline.net wrote:

When you, or a company, has no taxable income.
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Yes, of course I agree with that. But in context, the case we're discussing, where KRW claims I'm lying, was for accelerated versus normal depreciation for a business with profits that is paying income taxes and buys a truck.
I'm sure we're on the same side of that one.
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On Tue, 25 Sep 2012 13:47:23 -0700 (PDT), " snipped-for-privacy@optonline.net"

The government gets the taxes on the profits made, up front, and then refunds it back over time, rather than allowing some magic "deduction" later. The taxes on the profit have already been collected. That's where people get caught up in the "rich get free deductions" trap.

No, you're wrong. Think about it.

Right, but the whole issue of a write off in future years is that the tax is collected UP FRONT on the profits, and then refunded on this year's expenses, in future years. Sure, bringing in the deduction schedule helps the business but not because there are any freebies. No, it simply allows *MORE OF* the costs to be written off in the year the profits were made, rather than in succeeding years.

It certainly does. The taxes on the profits have already been paid. Expenses don't come from trees.

Go back to sleep.
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On Tue, 25 Sep 2012 21:13:01 -0400, " snipped-for-privacy@att.bizzzzzzzzzzzz"

How does the government get the taxes on the profits up front? They only get the taxes we send them on quartlies and if you are doing good tax planing you don't send them much money because know you will you shield your profits with things like depreciation. If you are getting big refunds, you are doing it wrong.
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On Tue, 25 Sep 2012 21:30:14 -0400, snipped-for-privacy@aol.com wrote:

What did you use to buy the widget with, food stamps? I guess you really "didn't do that".

^^^^^^^^^ ????

You have to make it before you can spend it.

Good grief. THINK!
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