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

[HeyBub]

"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 vehicle?s 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."

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.

[Vic Smith]

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.

[Hell Toupee]

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.

[Vic Smith]

Yup, and geo-thermal, wind and solar too. Forgot those. Was thinking about steam turbines.

[trader4]

What is different is that the taxpayers are also kicking in $7500 or more in tax credits.

[Frank]

They ignore pollution caused in mining the extra materials that make up the batteries. Most of it is out of the country so it don't count. When the Prius first came out I googled cost of battery replacement and somebody in Australia said it was $7,500 Australian dollars.

I met a woman that just loves to drive and might go 50,000 miles per year and just loves her Prius. This old dude with only 1/10 that mileage would be stupid to buy one.

Took a ride in a Prius a few months ago and while the car was very nice and rode well it was surprisingly noisy. I thought the electric motors were supposed to be extremely quite but it was road noise.

[Hell Toupee]

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.

[trader4]

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.

[George]

The section 179 deduction was one of the reasons you saw so many his & hers Excursions and other mammoth above 6,000 lb SUVs transporting individuals and their large beverage.

[chaniarts]

>

high mileage cars use very hard and skinny tires, causing more noise and less cushioning.

[gfretwell]

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.

[krw]

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".

[trader4]

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.

[gfretwell]

It is easy to spot the people who never filled out a business tax return huh Trader?

[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.

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.

[gfretwell]

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.

[krw]

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!

[gfretwell]

If you are in business, you should get a tax number and not pay taxes on your widgets. The government get's their money from your customer. but we were talking about income taxes weren't we? You don't settle up on them until April 15. It behooves you to anticipate what that bill is and not send them a dime more than necessary to fulfil your quarterly obligation.>>>They only get the taxes we send them on quart lies and if you are doing

but you don't pay taxes on it until you prove it is actually profit. Hence your schedule C.

Think about what? I don't think an interest free loan to the government is a good idea.

You really sound like a guy who has made all of his money on W2s

[krw]

You're advocating evasion?

We are *not* discussing sales tax.

Again, wake up!

What are "quartlies" or a "quart lie"? Are you trying to say "quarterlies"?

No, you pay for capital tools *as* profit until you can write them down. "Accelerated" depreciation simply allows you to do it a little faster than Uncle Sam normally does. It should be instantaneous.

That's precisely what they're forcing you to do! Leftists would rather you just give them the money and not write the expense down at all.

You sound more and more like a leftist.

[gfretwell]

And it was on the >6000 pound trucks which brings us back to where we started. They could be fully depreciated in the year that you bought them. You can also do that with most computer equipment, among other things that are rapidly on their way to being obsolete when you open the box.

There is a good reason why you might not want to depreciate an asset too fast. If you depreciate it more than the delta of purchase to sale price, Sammy comes back for that money in a recapture.