Category: Taxes

By on December 4, 2018

2018 Chevrolet Bolt - Image: Chevrolet

White House economic adviser Larry Kudlow announced Monday that the Trump administration is seeking an end to federal subsidies on electric cars. Interestingly, the move appears to be related to General Motors’ plant closings and layoffs. The company’s restructuring plan hasn’t gone over well with policy makers or the American public, with many accusing the automaker of abusing years of tax breaks, only to reduce its workforce as a way of pursuing new technologies, businesses, and further bolstering its profit margins.

However, cutting GM out of the electric vehicle subsidies deal is more likely to impact its rivals than anything else. The company said it’s on the cusp of the EV tax credit ceiling already, with the gradual phase-out of those incentives likely to take place through 2019. Yet Kudlow pointed to the elimination of the credits as one way of punishing GM for eliminating so many jobs, echoing President Donald Trump’s threats from last last week.

“As a matter of our policy, we want to end all of those subsidies,” Kudlow explained. “And by the way, other subsidies that were imposed during the Obama administration, we are ending, whether it’s for renewables and so forth.”  Read More >

By on December 4, 2018

Despite everything  you’ve heard about road rage, motorists tend to be pretty meek — at least when it comes to government regulations, and particularly in Europe. They passively accept, and pay for, mandated safety and emissions regulations as well as for taxes on the fuel for their vehicles. Perhaps, though, they aren’t as passive as we think. For the past three weeks, France has erupted in massive protests and riots that are being called the Gilet Jaunes protests, demonstrations that are spreading to Belgium and the Netherlands, and those protests were spearheaded by motorists.

Gilet Jaunes is French for “yellow vests,” which many of the protesters are wearing as a statement against intrusive, expensive, and sometimes petty government regulations and taxes. (For the past decade, French motorists have been required by law to carry bright yellow/green safety vests in their vehicles and wear them in the case of a breakdown.) Read More >

By on March 27, 2018

2015 Hyundai Santa Cruz Crossover Truck Concept - Image: Hyundai

The United States and South Korea reached a free trade agreement on Monday that spared the Asian country from punitive steel tariffs, assuming Seoul keeps an eye on just how much steel it sends to American buyers.

A quota on Korean steel exports means the country can only sell 70 percent of its recent average (2015-2017) to the U.S., though it is hardly Korea’s largest export market. The deal, reached “in principle” ahead of both countries’ meetings with North Korean leader Kim Jung UN, will also see South Korea raise the limit for U.S.-made vehicles that needn’t conform to local safety standards from 25,000 to 50,000.

It’s good news for the Trump administration, but not everyone’s thrilled. Hyundai’s union is hopping mad that a steep tariff on Korean-built pickups — which was set to expire in 2021 under the previous agreement — was just renewed for another 20 years.  Read More >

By on March 16, 2018

Steel Worker

Earlier this month, President Trump signed an executive order imposing a 25 percent tariff on foreign steel and a 10 percent tariff on foreign aluminum. Hoping to receive an exception, the Japanese auto lobby warned that the U.S. import tax would definitely inflate the price of models built by the companies it represents. That’s bad news.

However, the White House has already omitted its NAFTA partners from the tariffs, adding that it would consider further exceptions based on countries’ contributions to U.S. national security, military alliances, trading history, and how much they pay into strategic alliances like NATO.

While Japan is a longtime trading partner with the U.S., there currently exists a $69 billion deficit between the two countries. Trump also bemoaned Japan’s unwillingness to accept American imports. Still, the two have shared military alliances throughout the 20th century, with one ugly exception during World War II. They currently operate under the Treaty of Mutual Cooperation and Security and the U.S. currently considers the Japan one of its closest allies, despite it not being a NATO member — placing it in reasonably positive standing for tariff exceptions.  Read More >

By on March 8, 2018

Steel Mill

There was quite the backlash against President Trump’s plan to impose sweeping steel and aluminum tariffs on Wednesday. However, the White House pressed onward to formalize the measures on Thursday afternoon with assurances from the Commander-in-chief that they will be imposed “in a very loving way.”

Apparently, Canada and Mexico won’t be subjected to the 25-percent tax on steel imports and a 10-percent tariff on inbound aluminum. But the exception may only be temporary and the overall feeling on the tariff proposals are mixed, to say the least. Considering that the automotive industry accounts for a significant portion of the nation’s steel and aluminum imports, Rust Belt states are worried. Michigan, Ohio, Indiana and Pennsylvania receive around 20 percent of the steel and aluminum sent to the United States. Each of the states went red in the 2015 election after Trump said he would protect manufacturing jobs. But Trump claims that’s exactly what he’s doing.  Read More >

By on March 7, 2018

Peugeot, Image: Peugeot

The threat of new import tariffs has PSA Group worried about its plan to return to the United States. Following President Trump’s proposal to levy a 25-percent tax on steel imports and a 10-percent tariff on inbound aluminum, Europe balked at the suggestion, leading to further threats of a car tariff.

Right now, the U.S. levies a 2.5-percent tax on imported European vehicles, far less than Europe’s 10-percent tariff on vehicle travelling eastward across the Atlantic. There’s a 25-percent U.S. tariff on European vans and trucks, too, which explains why crates of Mercedes-Benz van components sail into the port of Charleston, South Carolina at regular intervals.

According to Trump, any European retaliation against the proposed metal tariffs — which seem all the more likely given yesterday’s resignation of the president’s pro-free trade economic advisor, Gary Cohn — would see the U.S. ratchet up its car tariff. If the scenario comes to pass, your dreams of one day buying a new French car in America could easily be dashed. Read More >

By on February 24, 2018

Bentley Continental GT Supersports

After hitting it big with the Fab Four, George Harrison wrote the scathing song Taxman in protest of the British government’s “Super Tax” on high-income earners. At the time, the boys faced a 95 percent tax on their earnings (“There’s one for you, nineteen for me”), and Harrison reportedly did everything he could to offshore his wealth.

Britain’s dismal weather wasn’t the only reason rock musicians fled the country during this period.

In beautiful British Columbia, a mountain- and wine-filled area north of Seattle, the provincial government’s recent budget has some auto dealers steaming mad and worried their customers will hit the road in search of deal. The province’s New Democratic Party government, elected last year, plans to levy a 25 percent tax on the purchase of very high-end vehicles, with lesser models facing a 20-percent markup. However, many dealers wonder where the law of diminishing returns comes into play. Read More >

By on February 15, 2018

The United States’ 18.4-cent-per-gallon tax on gasoline and 24.4-cent tax on diesel hasn’t changed since 1993. Despite this, the opinion that it should be hiked as a way of funding public works was nowhere near the White House’s official infrastructure strategy. But Donald Trump isn’t averse to the idea. In fact, he proposed a 25-cent increase to senators during a Wednesday meeting as a possible funding solution.

White House officials claim the president says “everything is on the table” in terms of finding a solution for America’s growing infrastructure problems. But how serious the rest of the Trump administration is about raising the fuel tax is debatable.  Read More >

By on February 14, 2018

Here at TTAC, we sometimes tap sister publications when a story arouses our interest. This piece, published by Hybrid Cars, details a battle brewing in the rustic state of Maine — one that pits hybrid and electric car owners against a government that says their cars, while good for the environment, aren’t good for road upkeep. As cars become greener and gas tax revenues dwindle, this won’t be the last battle.

A proposed new fee for hybrids and EVs in Maine could be the highest in the country, reducing clean vehicle adoption.

The Maine Department of Transportation wants to add an annual registration fee for hybrids and electric vehicles. $150 for hybrids, and $250 for electric models. The DOT is looking to impose the fee because it says drivers of the more energy efficient vehicles aren’t paying their fair share toward road maintenance.

“The owners of these types of vehicles are paying far less in the gas tax than other vehicle owners and they are using the highway system just like any others,” MDOT Manager of Legislated Services Megan Russo told the Portland Press-Herald. “There has got to be a way to try and capture revenue from those drivers who are using our road system.” Read More >

By on February 12, 2018

Donald Trump, public domain

Few things are sexier than a new road. The scent of fresh tar, smooth pavement that’s still warm to the touch — it’s an absolute feast for the senses. After roughly a year of waiting, President Trump finally seems poised to deliver on a bunch of them. The White House has just offered Congress a 53-page report detailing exactly how to rattle loose $1.5 trillion in investments into the country’s ailing infrastructure.

Maybe “poised” is the wrong word to use; how about we just say that he’s been interested in the idea that somebody should build them.

Expect Democrats to complain that the plan totally fails to create a dedicated funding stream to address the infrastructure issue and Republicans to gripe about how the small federal investment, set at $200 billion, is still far too large. It’s a beautiful system we have here.  Read More >

By on January 12, 2018

Ram HD production Saltillo assembly, Image: FCA

There’s good news this morning for Fiat Chrysler worker in the United States, and it’s also good news for members of the Trump administration.

The automaker has announced plans to sink another $1 billion into its Warren Truck Assembly plant and bring production of its Ram Heavy Duty models to Michigan from Saltillo, Mexico. At the same time, some 60,000 hourly and salaried workers in the U.S. can expect a $2,000 bonus (paid in the second quarter of 2018) in recognition of “their continued efforts towards the success of the company.” The move also means 2,500 previously unannounced jobs for Michigan.

What’s behind all of this sudden goodwill? Recent changes to the country’s tax landscape, FCA claims.

“It is only proper that our employees share in the savings generated by tax reform and that we openly acknowledge the resulting improvement in the U.S. business environment by investing in our industrial footprint accordingly,” said CEO Sergio Marchionne in a statement.

So, how does this production shuffle play out, and what’s the backstory here? Read More >

By on December 22, 2017

VW logo, Image: Volkswagen

Volkswagen has slashed salaries and suspended the bonuses of 14 members of its works council, including council head Bernd Osterloh, as officials investigate alleged overpayments. In May, it was made public that German prosecutors were looking into current and former executives at VW under suspicions that they paid the labor chief an “excessive” salary.

This was followed by a November raid, after which the council claimed the probe didn’t “target Osterloh.” Members specified that all payments were in line with Germany’s legal guidelines. The offices of VW’s chief financial officer, Frank Witter, and personnel director Karlheinz Blessing were also searched. Read More >

By on November 2, 2017

electric car charging smart car

It’s the last thing Elon Musk wants to hear and it’s likely not something General Motors will be too pleased about. Contained within the tax plan introduced by House Republicans Thursday is the elimination of a huge driver for electric vehicle sales — the $7,500 EV tax credit.

Automakers, and especially the two mentioned above, already stood to lose their credits in the near future (there’s a 200,000-vehicle-per-manufacturer cap), but the new tax bill would see the buyer incentive permanently removed, not renewed, as many had hoped. Such a move could slam the brakes on a still-fledgling segment in the U.S. Read More >

By on September 28, 2016

Volkswagen I.D.

Looking something like an unborn child peering with sightless eyes from inside an amniotic sack, the Volkswagen I.D. concept vehicle has been revealed ahead of the Paris Auto Show.

The description is apt, as Volkswagen sees the I.D. as an embryo, heralding a long-range electric vehicle slated for production within four years. Read More >

By on September 26, 2016

Volkswagen-Amarok-2017-1024-01

Move over Chevrolet, Ram and Ford?

It’s hard to say if American van and truck builders have anything to worry about after the head of Volkswagen’s commercial vehicles division publicly mused about jumping into the U.S. market. Read More >

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