By on January 4, 2012

A few days ago, the Washington  Post demanded the execution of the $7,500 tax credit for EVs. Republican Congressman Mike Kelly is ready to comply. He introduced H.R. 3768, legislation that would repeal the $7,500 tax credit for plug-in electric drive vehicles. The odd thing is: Kelly is owner of Kelly Chevrolet-Cadillac in Butler, PA. The not so odd thing is: He knows firsthand whether the car is worth tax payer money or not. Kelly does not think so:

“While our nation borrows 42 cents on every dollar, taxpayers are paying for an electric vehicle tax credit that has cost tens of millions of dollars, and that largely benefits upper-income Americans. According to General Motors Chairman and CEO Dan Akerson, the average income of a Volt owner is $170,000 a year.”

“I introduced legislation to repeal the $7,500 electric vehicle tax credit because, quite simply, our nation can no longer afford to subsidize vehicles that not only lack market demand, but whose safety has been called into question. In addition to the Chevy Volt, which is currently under federal investigation by the National Highway Traffic Safety Administration after the batteries of three crash-tested Volts caught on fire, the safety of Fisker’s electric vehicle has been recently scrutinized as well.”

How would you vote?

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78 Comments on “Congressman & Chevy Dealer Introduces Bill To End EV Tax Credit...”


  • avatar

    No tax credits, of course. Let the market decide.

  • avatar
    CJinSD

    $175K is the average household income of Volt buyers? We’re subsidizing second car purchases for the wealthy. Indefensible.

  • avatar
    krhodes1

    Absolutely thumbs down to this debacle. I would rather see a $7500 subsidy to let a poor welfare Mom replace her gas guzzler with a used Corolla – would do far more good.

    • 0 avatar
      dwford

      I agree with the sentiment. But there are a lot more poor mom’s needing a used Corolla than there are rich people that can be bribed into an economically bad decision.

      • 0 avatar
        tuffjuff

        Mike Kelly is a moron, as are most people who are talking about politics when you turn on the TV today.

        That said, the tax credit isn’t to help people “afford” a Volt, it’s to help SELL the freaking things to help with the whole economies of scale thing. The idea being that the more Volts sold, the less expensive the idea as a whole will some day become.

      • 0 avatar
        CJinSD

        Read United Nations’ Agenda 21. Pricing the working poor out of car ownership is Obama’s objective.

      • 0 avatar
        redav

        tuffjuff is correct. The govt’s goal is to shift the technology. I take all other accusations about nefarious schemes and socioeconomics with a grain of salt.

      • 0 avatar
        JCraig

        tuffjuff – Agreed, people don’t realize the ultimate goal is to get production of EV cars up. The more that are on the road the less the rest of us will pay for gas. Using less is the only real answer to oil prices. I for one am sick of being at the whim of oil traders that use every possible reason to push up the price. If consumption stagnates or even falls prices will follow.

    • 0 avatar
      acuraandy

      Case in point against gov’t subsidies (aka the atrocious ‘Cash-For-Clunkers):

      In 2009 I blew an engine using sodium silicate (or liquid salt for us ‘uneducated’ rubes) in a 2000 Olds Silouette minivan.

      Had about 100k on it, body was perfect, interior was perfect. All it needed was a check engine light scan and new brakes. I offered $ for it myself, but because of the fed rules, it was slated to be destroyed.

      BIG +1. There are many low-income people who would be better served from this subsidy than a bunch of guys who CAN AFFORD A $40k toy car ON THEIR OWN.

      P.S. Here’s a link from when I blew said van up.
      http://www.youtube.com/watch?v=l1-5h_rY_Ks

    • 0 avatar
      axual

      Nope … eliminate ALL tax credits. Otherwise you’re playing a game picking one group of people over another group.

  • avatar
    KixStart

    While the tax credit was a bad idea (I wouldn’t mind a smaller one quite so much), a Republican touchstone is that Dems are bad for business because of “uncertain regulatory environments” that the Dems foster.

    How is an Republican-sponsored bill that brings an abrupt end to a tax credit that originally had a specific life, and which certain industries planned on in making their product plans, going to reassure businesses that long-range planning is possible under a Republican Congress or Administration?

    • 0 avatar
      CJinSD

      Maybe the next time the government offers incentives to do something otherwise completely unnecessary, private industry will tell the government where to stick it. Did you notice that the percentage of federal dollars that are being created from thin air has risen from 40 to 42 in the past few weeks? Someone is going to wind up paying for the Obama regime. It had might as well be the crooks that jumped in bed with him.

      • 0 avatar
        KixStart

        The percentage of federal dollars created out of thin air has a lot more to do with the debt that Obama inherited, the two wars Obama inherited and the crashing tax revenues that Obama inherited than anything Obama himself has done.

        Bush and his heroin-pushing Congresses cut taxes without cutting any spending whatever and started two expensive wars (one of which was entirely unnecessary and rests on a foundation of lies).

        The result of Bush’s “stimulatory” tax cuts was an entirely underwhelming 2% annual GDP growth (which probably had far more to do with the natural increase in population and the rise of web-based business than the tax cut itself), followed by a delightful recession.

        At the local Democratic caucus in 2008, I expressed my profound admiration for Obama and suggested we nominate somebody else (Barney Frank, maybe) and throw the election. Sadly, McCain did that, himself, when he named Sarah Palin to be his running mate.

      • 0 avatar
        CJinSD

        How do you remain oblivious to the budgetary impact of Obama’s policies? It must take incredible focus.

      • 0 avatar
        KixStart

        You never did address the central point of my original post… If changing the rules is a bad thing for economic prosperity, why is Kelly changing the rules?

        Don’t get your knickers in a twist over the amount of money to be saved, as it happens the Volt sells very slowly, so the money involved isn’t all that much (at least, on a Federal scale, it’s inconsequential – you could probably recover all the money by cancelling a B-2 or a couple of prime pork projects in Boehner’s district).

      • 0 avatar
        JCraig

        Private industry is what led to the 70′s huge POS gas guzzlers and left us completely unprepared for OPEC’s demonstration of their power over our economy. People need to think about what things were like before regulation. It’s so simple to think these benevolent companies would just do everything right on their own.

      • 0 avatar
        masanf

        The reply from KixStart is a complete joke. Yes it is all Bush’s fault, still. The fact Obama has just about spent more in three years than Bush did in eight? Yeah, let’s just ignore that fact. Bush was waging the same wars as Obama as well as dealing with the effects of 9/11 and Hurricane Katrina, yet Obama has still managed to spend at a much faster rate. Sorry, but after three years, you don’t get to blame your predecessor anymore. And speaking of two wars, I seem to recall that Obama sent tens of thousands of troops to Afghanistan rather than pulling all the troops out, so the whole “wars he inherited” nonsense just doesn’t fly. As for the so-called “Bush tax cuts” I seem to recall them being extended under Obama as well.

        Sorry, but when your administration has presided over record long-term unemployment, a record string of months with 9% or greater unemployment, record debts, record monthly deficits that are greater than the yearly deficits under Bush (so much for your asinine “it’s Bush’s fault” “argument”), record poverty, record numbers on government assistance, record declines in housing prices, record low home sales, record low income mobility, record high foreclosures, record declines in personal income, etc. etc. you don’t get to blame your predecessor anymore.

        You can always spot a mindless Obamabot when you read claims that Obama should be the only president in US history who gets to blame his predecessor for every single thing that goes wrong on his watch. It doesn’t work that way.

      • 0 avatar
        KixStart

        masanf: “The reply from KixStart is a complete joke.”

        I find that offensive.

        I can find figures that support what I say. Can you?

        http://en.wikipedia.org/wiki/2010_United_States_federal_budget
        http://en.wikipedia.org/wiki/2008_United_States_federal_budget

        http://en.wikipedia.org/wiki/United_States_federal_budget
        Note the change in revenue.

        I’m not going to argue that Obama is a saint but you don’t cut spending in a recession, especially when you can still manage to get money at 3% or so to fund an effort at recovery. It’s our good luck that Europe is having its problems, too.

        We face some tough choices but the Bush Administration and his Congresses did nothing whatever to improve the situation and the tax cuts have made the current crisis far worse (and Republicans are seizing the opportunity to berate the President for a debt crisis that they largely created – lovely politicking, that).

    • 0 avatar
      damikco

      @CJinSD Specifically what polices?

      • 0 avatar
        mike978

        Sigh CJ – look at this link : http://www.theatlantic.com/politics/archive/2011/07/the-chart-that-should-accompany-all-discussions-of-the-debt-ceiling/242484/

        Damicko – you will not get many specifics, he prefers hyperbole (much like his boast of advising loads of people on car purchases and other self aggrandizing).
        It clearly shows the cost of policies pursued by both the Bush and Obama administrations. Note administrations, regimes denote undemocratic Governments. The President was fairly elected by I note a much bigger EV and % of popular vote margin than Bush got either time. Try to keep some perspective.

        Most people don`t deny the current administrations policies have added to the deficit but to deny the bigger effect Medicare part D, large tax cuts and multiple wars had in 2001-2008 is just blinkered.

      • 0 avatar
        CJinSD

        If you can figure out how to read that, you’ll notice that it is based on projections supplied by the Obama regime to the budget office, not any sort of reality. Reality is that Obama has already added over 4 trillion dollars to the national debt in 3 years with no end in sight. Anyone who publishes that article has zero respect for the knowledge of their audience. They certainly knew you though.

      • 0 avatar
        Diesel Fuel Only

        CJ: First,

        It was Obama that offered the congress a tax/spending cut deal four times larger than what the “super committee” was supposed to cut. Boehner and Cantor rejected that deal on ideological grounds and the “super committee” those two advocated failed.

        I have no ideological aversion to tax incentives or the like, but there has to be a benefit equal to or exceeding the subsidy. I don’t see that in this case. The Volt is a White Elephant and specialty cars like the Tesla are high-end cars going to people who are buying it as a second car, which means that it is not displacing gassers, which lessens the claimed benefits. The leaf, on the other hand, really is a small, efficient, economical car that regular people can buy and drive to work (if it isn’t too too far away) and just might replace – not augment – one of a household’s cars.

        So, more likely, the criteria used to determine who gets the credit has to be scrapped and re-written.

        If that can’t be done, then maybe it is time to throw the baby out with the bathwater.

      • 0 avatar
        KixStart

        CJinSD: “If you can figure out how to read that, you’ll notice that it is based on projections supplied by the Obama regime to the budget office”

        The CBO does its own projections.

      • 0 avatar
        Dan

        The premise of that pretty graph wherein only “policy change” spending counts at all (and tax brackets relative to the 1990s are declared spending) is buck passing bullschit.

        Is Obama the President or not? Did or didn’t he own huge majorities of both houses of Congress? With the mandate of a landslide win and an unprecedented crisis to work with besides. They had once in a generation oppurtunity to change any policy they wanted, which they immediately did. Yet when they’re called on it we’ve gotten the same line for 3 years and counting that they’re mere powerless caretakers and the 2012 budget they put out is Bush’s fault.

        The bottom line is that the last administration spent far beyond its means and this one took that malfeasance as its baseline and immediately extended and expanded on it to the tune of another 600 billion borrowed dollars a year.

        Interpreting that as the last guy was terribad while our guy has done only 33% as much damage is hyperpartisan fantasy. The last guy was awful. That doesn’t make your guy only a third as bad. It makes your guy 133% awful.

        Take off the partisan glasses long enough to see that both teams are awful to the same people. That people is us.

      • 0 avatar
        CJinSD

        KixStart and mike978,

        The CBO never uses its own premises. Supposedly as an indication of its non-partisan status, it only works within parameters supplied by the authors of legislation. If Obama says growth will be 8%, the CBO uses 8% projected economic growth. This is something you should learn about before using the CBO as evidence for projected deficits.

      • 0 avatar
        MoppyMop

        If Obama says growth will be 8%, the CBO uses 8% projected economic growth. This is something you should learn about before using the CBO as evidence for projected deficits.

        [citation needed]

        Here’s the CBO’s analysis of Obama’s most recent budget. I will quote the important parts:

        http://www.cbo.gov/doc.cfm?index=12103

        CBO’s analysis of the President’s proposals is based on its own economic assumptions and estimating techniques (rather than the Administration’s)

        Compared with the Administration’s estimates, CBO’s estimates of the deficit under the President’s budget are lower for 2011 (by $220 billion) but higher for each year thereafter (by a total of $2.3 trillion over the 2012–2021 period). That disparity stems from differences in the underlying projections of what would happen under current law ($1.3 trillion) as well as from differing assessments of the effects of the President’s proposals ($1.0 trillion).

        If CJ has any proof that the CBO operates as he says they do I would like to see it, though based on what we’ve seen from him before I suspect he doesn’t.

  • avatar
    harshciygar

    I wish you guys would have mentioned that Mr. Kelly has oil assets in excess of $6 million.

    No conflict of interest there or anything…

    • 0 avatar
      Lokki

      Harshciygar -

      Are you serious? REALLY? You REALLY think that the Volt poses any serious threat to the oil industry? REALLY?

      • 0 avatar
        harshciygar

        Well if it doesn’t pose any threat, why are so many oil-connected politicians and pundits going out of their way to blast it?

        Jay Leno drove 11,000 miles in his Volt on about 4.5 gallons of gas. That is over 2,300 MPG.

        And it isn’t just the Volt that this credit affects; the LEAF, the Mitsubihi i, the Focus Electric…all of them are able to apply the maximum $7,500 of the credit towards the final bill.

        It’s just a drop in the bucket today, but Americans are using less gasoline now than ever before, and every year that number seems to go further and further down.

        I’d be pissing my pants if I was an oil man too.

      • 0 avatar
        Lokki

        I can’t stop laughing Harshciygar. It IS a drop in the bucket, even if you include Jay Leno’s 11,000 miles. The congressman, and you, and your children will all be long dead before electric cars have any impact on gasoline prices. EVEN if (in your dreams) every American and every European began to drive electric cars, the growth of gasoline powered cars in China, India, Africa, and other Asian countries, are going to use all the gasoline that the oil companies can manufacture. Additionally, don’t forget all the ships at sea, and the oil powered power plants that must be used since coal and nuclear are off the table.

        Surely, you can find a better conspiracy theory than “the congressman has oil interests”. Maybe try this one: he wants to get reelected and he believes that cutting subsidies to the rich will be popular. Now THAT I might believe.

        Let me give you another hint that might help: It ain’t just the oil companies that think the Volt was a stupid idea…..

      • 0 avatar
        harshciygar

        Your ignorance is so overwhelming and crushing, I don’t know where to start.

        As I already mentioned, Americans are using a lot less gas these days, due to a combination of a slow economy and cars getting much, much better gas mileage. And every year the automakers are making more progress towards higher MPG’s. How long that will last is anybody’s guess, but everybody benefits from making a gallon of gas go farther.

        Everybody, but the oil companies.

        You mention China and India. China has some of the planet’s most generous subsidies for hybrid and electric cars; they WANT to be a world leader in these vehicles, and they will be if they keep it up. China doesn’t really have an option; getting gasoline for 1.4 billion people in a country that has comparatively little oil of its own is going to be a huge challenge. Same deal with India.

        These two countries are going all-in on EV’s, and they will leave America in the dust if this country fails to support the development of such vehicles.

        Even shipping companies are shifting away from heavy oil and exploring biofuels, natural gas, and even employing solar panels and sails (yes, sails) to reduce their emissions and oil usage.

        You’re right, the whole world runs on oil. For now. But there is SO much money being poured into alternatives, from EV’s to CNG to people just NOT owning a car anymore, that oil companies will start feeling the sting, sooner or later.

        The Chevy Volt simply makes an appealing target to people like Kelly, who have no problem subsidizing oil companies, but don’t believe a penny of taxpayer money should go towards electric vehicles. The government has used taxpayer money to build so many things we all take for granted, from the highway system to the Internet to GPS systems; all funded by We The People.

        I don’t think EV’s are going to take over the world any time soon. But I am also sure it is an inevitability as oil prices and instability in the Middle East continues to rise. I’d rather not wait for gas prices to reach $7 a gallon before people like Mr. Kelly finally come around to thinking ya, maybe we do need a real alternative to oil.

      • 0 avatar
        JCraig

        Harsh – it seems like many people have a hard time seeing the big picture or seeing the long term. The Volt and Leaf have no impact on oil prices, and the point of the credit is so that in the next 10-20-30 years there are enough EV’s on the road that they do make a huge impact. It can only benefit us all if the boring Camry’s are one day electric. I will be enjoying the cheap gas.

    • 0 avatar
      GS650G

      And Pelosi is worth over 35 million. He’s small time.

    • 0 avatar
      gslippy

      The Volt uses gasoline, so I don’t see a conflict of interest.

      Maybe he doesn’t like having $42k Chevys on his lot that require a government coupon to sell.

      • 0 avatar
        geozinger

        @gslippy: Like other discussions on here about negotiating with car dealers vs. paying sticker price, no one has to take the tax credit.

        Depending upon the situation, a particular person may only qualify for a portion of the tax break. Or none of it.

        It would be interesting to know how many people with incomes above $100K (as an example) who bought (as opposed to leasing a) a Volt actually got the full amount.

        All that said, I was not in favor of the other tax breaks given to other hybrid cars, but it was fair to offer a similar break for the later models that have appeared.

        This politician-car salesman hybrid is just trying to solicit votes. Imagine, the reputation of a politician combined with a car salesman…

        Would you buy a used car from this guy?

      • 0 avatar
        geeber

        geozinger,

        If he is just trying to solicit votes, then perhaps the Volt isn’t that popular with his constituents? The logical conclusion would be that he is doing what his constituents want.

        If the Volt were selling well, I’d imagine we wouldn’t hear a peep out of him about this.

    • 0 avatar
      Jimal

      Actually, we had this discussion about Congressman Kelly and his dislike for the EV tax credit earlier this year. Forget his oil assets and other conspiracy theories. Mr. Kelly’s issue with the EV credit had to do with his dislike for GM forcing him to take a Volt into his inventory and his inability to sell it because his (I believe the word used was “hardscrabble”) western Pennsylvania clientele buys trucks and can’t afford/won’t spend the money on such nonsense.

    • 0 avatar
      Lokki

      The accusation was that the Congressman wants the law because he’s scared that electric cars will reduce his profits from his oil (business/stock).

      My point is that it will be decades before there are enough electric cars to impact his profits in any significant way.

      You fail to address that. You are too busy singing the praises of saving the world to notice apparently…

      I understand that you are saving the world for your great grandchildren who would otherwise die…. so OK.

  • avatar
    morbo

    Does the Volt pose a threat to the oil industry? No. Does the Prius pose a threat? no. The leaf, TDI Jetta’s, 1.0L EcoSports’? No.

    Does the mindset that goes into purchasing these vehicles. Absolutely. It’s not about stopping one vehicle. It’s stopping the change in the way people think of cars. From an emotional, lustfull, pridefull, status purchase to an appliance / logical purchase. One co-worker is looking at a TDI variant not because he particularly like VW/Audi, but solely because he wants to maximize mpg in a reliable powertrain. As he says, “I shot too many people in the Middle East to buy a gas guzzler’. Not trying to start a flame war here, just a persepctive. One being increasingly adopted by people.

    Oil as a transportation fuel will decline in importance, never replaced, but decline. That is something for the oil industry to worry about.

    I say this as I just made my last non-logical car purcahse, new 300C with the 5.7L V8.

  • avatar
    PaulVincent

    Repeal the tax credit.

  • avatar
    GS650G

    Does Leo DiCaprio need a 7500 rebate to buy a 97K Fiskar? Didn’t think do.

  • avatar
    Pch101

    You gotta love it. This dealer-politician is the same guy who was grousing about the Volt being overpriced, while advertising the Volt that was on his lot for a price above MSRP.

    I see that he no longer has it listed as part of his inventory. I wonder how much he got for it?

    • 0 avatar
      dvp cars

      ……..pch…….maybe, like Steve Lang, he had to decide whether to sell, rent, or keep……..and it’s now his demo……not too likely though. Probably drives a Suburban with a dealer-installed 502 crate motor, Secret Service style tinted windows, and as many “Kelly Chevrolet” decals as Capitol Hill decorum can reluctantly tolerate.

    • 0 avatar
      geozinger

      i remember this guy from the last time he bloviated about the Volt.

      I think if I were in charge of franchises for GM, I’d be re-evaluating who I’m doing business with in the Butler PA, area.

      I can’t imagine any company tolerating a franchisee who badmouths their own product.

      If he finds that operating a Chevy franchise is so awful, get out.

      • 0 avatar
        shaker

        He also has a Hyundai/Kia dealership right next door to the Chevy facility.
        He got himself on Fawkes News; “mission accomplished”. He’s not fighting for any noble cause, just the latest to kick a political football.
        Personally, the tax credit is *this close* to tempting me (whose income is FAR below the supposed median of EV buyers) to purchase a Leaf, but I can’t justify the purchase on economic factors – maybe someone else in my situation may be able to; THAT’S THE POINT of the tax credit. It will encourage the adoption of these vehicles by the middle class person who feels that their vehicle choice will encourage others to change what seems to be an entrenched view that “driving 500 miles on a whim” is somehow “normal”. The Volt is a PERFECT “bridge car” that will encourage drivers to use electrons whenever possible (enjoying the smooth, silent power that only an EV can deliver) and to avoid the use of the ICE except when necessary – I heartily applaud any “early adopters” who take the plunge, and I applaud any government that assists the burgeoning “sea change” that (someday) will allow us to not only thumb our noses at the oil giants, but teach us that a 100-mile round trip to an outlet mall to buy a HAT is sheer madness.
        Also, soon the Leaf will be produced in Tennessee – American jobs that were helped into existence by the “evil” tax credit.

        Some people here act like EV’s are some kind of Communist plot; a threat to our way of life… well the latter part is probably true, and I guess that scares people.

      • 0 avatar
        geozinger

        @shaker: I forgot about the H/K dealership. It would be nice to see the headline amended to show that fact.

  • avatar
    dwford

    I have no problem with the government spending money on basic research to come up with an economical battery for an electric car, but subsidizing inferior products with our money makes no sense. Any business whose business model depends solely on government hand outs gets what they deserve when the money runs out.

    • 0 avatar
      redav

      The subsidy is a form of indirect R&D financing. Whether the govt pays for research, offers tax breaks for research, or entices customers to buy the product of the research, is there that much of a difference? I’m sure one way is more effective than another, but I don’t have enough data to say which. However, at least with the existing tax incentive, only technology that actually gets to market gets ‘funded’ as opposed to paying for research that goes nowhere.

  • avatar
    jkross22

    Yet another symbol of a bought and paid for Congress. This subsidy isn’t for consumers… it’s for the manufacturers, one of which got bailed out with $80-100 billion of taxpayer dollars.

    Like all industry subsidies I’ve heard of, this one needs to be put into the wood chipper.

  • avatar
    Acd

    Borrowing millions of dollars from China to subsidize people making $170K+ per year for buying new cars seems like a poor use of government resources.

    • 0 avatar
      sitting@home

      Nothing new, the “Hummer” tax credit was for years used by orthodontists to write off their shiny new SUVs. Mortgage tax deductions are only really useful for higher earners but push up house prices for everyone. I’m sure there’s a thousand and one loopholes Congressman Kelly uses to lower his tax bill and let’s not mention the 65 billion government bailout (allegedly all paid back) without which he would not have any product at all to sell.

      • 0 avatar
        geeber

        Perhaps a better avenue is to explore the possibility of eliminating the loopholes or credits – or at least perform an honest cost-benefit analysis of existing ones on some sort of regular basis – instead of using that rationale to blindly justify new ones?

        If nothing else, at least the federal tax code might not become increasingly convoluted and confusing with every new Congress.

  • avatar
    acuraandy

    I agree the credit (and indeed, ALL) should be cut.

    With that said, this guy may have just pissed off a hive of bees, and thus may have just lost his franchise.

    This has the plot of a bad Hollywierd movie.

    ‘Congressman who owns a ChryFiatvy car dealership loses franchise due to pissing off the government (OF WHICH HE IS A PART OF!) funded manufacture of which he sells and blasted on cable news’

    Does anyone know how he voted on the automaker bailouts or if he was even in office at the time? Now THAT would be interesting to know.

    • 0 avatar
      redav

      Do you really think a company is going to intentionally piss off a guy who writes the laws & thus can hurt them far worse?

      • 0 avatar
        acuraandy

        With what has happened so far in this country the past three years, I am of the opinion there is some wierd shit going on.

        Quite frankly, I don’t think Gov’t Motors really cares what anyone thinks (be they a franchisee or customer after the sale). As an -unforturnate- owner of a pre-bailout (by a scant few months) GM, when it was under warranty they were just plain jerks to me.

        I think their current rationale is that if US customers slow/stop buying, China will make up for it. And the sick thing is (case in point, Buick), I think that is an accurate assessment.

  • avatar
    APaGttH

    I agree the credit should go away. However, the US government certainly helped Prius sales out of the gate while, lets remember, offering significant tax credits – ditto for Honda Civic hybrids, that ironically didn’t deliver any better MPG after 18 to 24 months on the road than their gas burning, more fun to drive, better equipped cousins.

    So – is it – ehem – “fair” that Honda and Toyota got a tax break one credit at a time to goose hybrid sales, and then, we’re debating not supporting an American based car company – hey no matter what, at the end of the day Toyota and Honda count those profits in Yen – not in US dollars.

    So I was against the credits going back to the hybrid days – but I see cutting the credit as almost, Unamerican in a way.

    I find the hypocrisy of Congressmen Kelly beyond fascinating. He grouses about the Volt and tax credits, but if GM hadn’t been bailed out, he’d have no dealership and revenue stream to begin with. Oh minor details I know.

    • 0 avatar
      CJinSD

      “So I was against the credits going back to the hybrid days – but I see cutting the credit as almost, Unamerican in a way.”

      If removing a $7,500 subsidy for $175,000 households to buy a second car is ‘Unamerican,’ one can only lament what ‘American’ must have come to mean.

      • 0 avatar
        geozinger

        I don’t know the specifics of the tax credit but I believe there are income restrictions, and a limited amount of taxes to be deferred. Not everyone who applies will get the full tax break, and depending upon sales, some will get no break at all.

        For as few people who are buying Volts, it’s just as few or even fewer who are getting the tax break. Therefore if more Leafs are being sold, all things being equal, more of those purchasers are getting the tax break.

  • avatar
    Carlson Fan

    “If removing a $7,500 subsidy for $175,000 households to buy a second car is ‘Unamerican,’ one can only lament what ‘American’ must have come to mean.”

    Sorry, but household income is irrrevelant as far as whether or not there should be a rebate. Your getting wrapped around the spoke and losing sight of the big picture.

  • avatar
    fred schumacher

    Butler is also the home town of Rick Santorum, who wants to ban all forms of contraception; while, this auto dealer wants to get rid of a tax break that could help his business enter the 21st century. So, one Butler home boy wants to go back to the 16th century and the Council of Trent, and the other is nostalgic for the 20th. I guess if you want to keep America strong and able to be competitive with China, Butler is not the best place to go recruiting.

    • 0 avatar
      geeber

      Using that standard, we never would have elected the current president, as he came from one of the most corrupt municipalities in the nation, that among other boneheaded moves, passed a de facto handgun ban (and yet still managed to have one of the worst crime rates in the nation).

      Plus, his home state is essentially broke, and the former governor not only went to jail, but he got booted fairly early from his season of Celebrity Apprentice. Not even his awesome head of hair could save him from being fired…

  • avatar
    fred schumacher

    Remember Groucho’s song from the movie Horse Feathers? “I don’t know what they have to say. It makes no difference anyway. Whatever it is, I’m against it!”

    Mike Kelly is a Republican Congressman, a member of a party whose theme song is, “We don’t care what the President has to say. It makes no difference anyway. Whatever he’s for, We’re against it.” Such as health care reform, which was patterned on ideas first proposed by the conservative Heritage Foundation, in similar form was signed into law in Massachusetts by Republican Governor Mitt Romney, who now disavows any connection to his own ideas when they are adopted by a Democrat.

    During the Reagan years, tax incentives replaced direct subsidies for research and development. The level of federal funding of science and technology has continued to decline. The only avenue open for stimulation is tax law. I’m sure that in his auto business Kelly uses many of those tax benefits not available to the majority of us tax payers.

    We have the sorry spectacle of the weakest Speaker of the House I have seen in my 62 years. One who lets backbenchers set policy and bring America to the edge of financial collapse. Even Senate Republicans have now had their fill of the antics of their brethren in the House. Kelly’s grandstanding is not about the merits of the tax incentives on the Volt. It is all about bringing the President down, and that’s the shameful part.

    My family lives in western Pennsylvania, not far from Butler. When I was a kid, our fathers worked in the steel mills, had good union benefits and pay, our mothers stayed home, and we were able to live a middle class life on one income. I cut the grass for the upper management of Sharon Steel. They lived comfortably but moderately, until Victor Posner came and did a hostile takeover of Sharon Steel. Driven by greed, he stole our lives away from us. I’m sorry, but Kelly is in a long line of politicians who have abetted the thieves.

    • 0 avatar
      geeber

      I don’t doubt that Victor Posner did bad things to Sharon Steel, but he is not responsible for the dramatic changes in the entire domestic steel industry.

      That was caused by decades of underinvestment in new processes and equipment that was supported by both management and labor for various reasons. That worked until foreign competitors (particularly Japan) got back on their feet and began offering better products at lower cost in the 1970s.

      That problem was FAR bigger than Victor Posner, and it didn’t just affect Sharon Steel.

      It was the same story with the auto industry, tire industry and heavy equipment industry. The problem wasn’t “greedy investors,” it was management and labor milking the same old cow until it was dry, and ignoring what customers wanted.

      Meanwhile, the United States still ranks among the top three nations in steel production, and manufacturing’s share of our gross national product has remained the same for decades. The idea that “we don’t make anything anymore” is a myth.

      A lot of the old-line, unionized dinosaurs went away. But the air is clean now in Pittsburgh, and it’s more of a research and technology center, and a much nicer place to live, as well. Changes happen, and life goes on…

      • 0 avatar
        fred schumacher

        Sharon Steel wasn’t like the rest of the dinosaurs. It was the most modern steel mill in America at the time. It was the first to bring in Kaldo basic oxygen furnaces, first with continuous strip rolling mill. It made high strength alloy steels, stainless steel, and even had a titanium mill. Victor Posner took it over because it was a profitable company with low debt and undervalued stock.

        He then set up a warehouse a few miles down the road, where he stored the steel he had sold to himself cheaply and then resold at market value, thus siphoning capital out of the company and into his own pockets. My father was a craneman loading the trucks going to the warehouse.

        We tend to think of the 50s and early 60s as some norm that we have been drifting away from, but it was that post-war period that was the aberration. America came out of WW II with most of its infrastructure intact, resulting in America having over half the world’s manufacturing capability. This was an unsustainable percentage. Over time, war zone nations rebuilt with new technology while America continued to coast with its old stuff. Three decades ago, Lester Thurow discussed this in Zero Sum Society.

        The combination of manufacturing strength, powerful industrial unions, confiscatory taxation to pay down the war debt and build public infrastructure, and government investment in education and research created the conditions which allowed the middle class to grow rapidly. For 25 years after WW II, wages and benefits increased in step with productivity gains. Wages decoupled from productivity around 1970, followed 10 years later by benefits. Since then, 90% of the value added by productivity improvements have been absorbed by the richest Americans.

        The implication of all this for this website is that the middle class no longer has the income to blow a lot of money on new cars. The Volt subsidy is a tempest in a teapot. The bigger issue is that by increasing the income gap between the very rich and the rest of us, money is drained out of the general economy and is put into financial speculation which produces no new wealth. The result is a downward spiral.

        Victor Posner is important because he was one of the first individuals exhibiting the behavior that has now become a trend: the winner take all society.

      • 0 avatar
        KixStart

        geeber: “A lot of the old-line, unionized dinosaurs went away. But the air is clean now in Pittsburgh, and it’s more of a research and technology center, and a much nicer place to live, as well. Changes happen, and life goes on…”

        A delightful picture, to be sure. You do realize the median wage has been falling for a decade? Do you understand the real implications of that?

    • 0 avatar
      shaker

      +1 – As someone who worked at US Steel’s Homestead works for the first 8 years of my employment, I would say that the decline of the basic (not specialty) steel industry was fueled by greed on both sides of the equation: US Steel was making fantastic profits in facilities which were upgraded by the government for the War effort that US Steel bought for pennies on the dollar, and the U.S.W. fought hard in the 50′s to get a piece of that profit. This, along with more stringent pollution control standards of the 60′s set the stage for US Steel to build plants in Brazil, Europe, Asia, etc. rather than investing in newer, cleaner technologies here (The “Bop Shop” in Braddock, PA being an exception, but it came far too late). The early 80′s it all started to go downhill; Now the Homestead Works (which employed 4,000 in its heyday, and several surrounding towns that were built on middle-class wages) has become a shopping center, and the towns around it have fallen into decay and crime.
      A less adversarial attitude of both the Company and the Union could have (at least in part) preserved a leaner, cleaner domestic steel industry, but the reality is that neither side was willing to budge, because it meant compromise (in the form of losses on both sides) that would not happen due to lack of forethought, pride and stubbornness. I dare say that the present political climate that pits Americans against each other mirrors the basic steel story, and we don’t learn anything from “selective” history.

    • 0 avatar
      KixStart

      fred schumacher: “Mike Kelly is a Republican Congressman, a member of a party whose theme song is, “We don’t care what the President has to say. It makes no difference anyway. Whatever he’s for, We’re against it.” Such as health care reform, which was patterned on ideas first proposed by the conservative Heritage Foundation, in similar form was signed into law in Massachusetts by Republican Governor Mitt Romney, who now disavows any connection to his own ideas when they are adopted by a Democrat.”

      Whenever anybody I’m acquainted with lost their job (and this was happening with depressing regularity over the last couple of years) and the incident comes up for discussion, one of the first things I hear from people, whether Republican or Democrat is, “what about his healthcare?”

      And, yet, a good chunk of the nation loathes Obama (or is being whipped into an Obama-loathing frenzy) for actually doing something to ensure people don’t have to worry about whether or not they can get care.

      Cognitive dissonance, much?

  • avatar
    fred schumacher

    Although the discussion going on here is about tax breaks, a more important subject that should be discussed here at TTAC on electric vehicles is the subject of morphology, that is, the appropriate shape for the primary task.

    Recognizing the need for manufacturers to go from the known to the unknown by using existing materials and methods, there is a price, figuratively and literally, to be paid for using that methodology.The Volt is a Cruze; the Leaf is a Versa. They are bricoleured solutions to the problem of electric propulsion.

    The primary purpose of both these vehicles is short range daily commuting. Nearly seven-eighths of the time we drive alone. The Volt tare is 3825 pounds; the Leaf’s is 3415. Road and Track tested them last year. The test weights were 4005 pounds for the Volt and 3595 for the Leaf. That’s a load to tare ratio of 0.047 for the Volt and 0.053 for the Leaf. With the low energy density of today’s battery technology, this is a phenomenally wasteful way to accomplish electric transportation.

    More weight means more power, more storage, longer recharge times, higher cost. The weight has to come down, and to do that the shape, that is morphology, has to be reconsidered so that the solution more closely meets the need. Liquid fueled cars could be wasteful because of the high power density and low cost of the fuel. Electric vehicles can’t be.

    These cars get criticized for being electric golf carts. Actually, if they were golf carts, they would be closer to the right morphology. While the first autos mimicked horse drawn carriages until a new, more appropriate shape became the norm, electric vehicles also must come up with a new shape, one that is more parsimonious, lighter, less multi-purpose and more single-purpose in function and design. I would recommend the Piaggio MP3 three-wheel scooter as a starting point for a design exercise.

  • avatar
    shaker

    But the Volt and the Leaf are designed to mimic the “morphology” of the accepted norm: A comfortable, 4-5 seat vehicle with all of the amenities that can survive modern safety tests. Thus, these cars will suffer the inefficiencies that morphology entails, but will be more acceptable to mainstream buyers that would not buy anything like an Aptera.

    • 0 avatar
      fred schumacher

      This is exactly the problem the industry finds itself in. The industry knows that the present pattern is unsustainable in the long run, but the company that breaks into new ground will find itself punished by the market, which is notoriously small “c” conservative and resistant to what it has grown comfortable with.

      For example, the Chrysler Airflow pointed the way to the future but was itself a marketing disaster. This is why there has been remarkably little industry opposition to the 54 mpg CAFE rules being proposed. CAFE forces all manufacturers into the same straight jacket and reduces the risk to individual manufacturers of breaking out of the established mode.

      Part of the problem is the mindset our evolutionary history has created. We tend to attempt to maximize our return on investment. In the automotive field, that means buying a vehicle with the greatest utility. What this pattern ignores is the “mode,” that is, the statistically most frequent use. We don’t prioritize most common usage as the primary criterion for vehicle choice.


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