Hybrid Car Tax Break [Passed]

[Sam Spade]

Hybrid Car Tax Break

Section 1:
a.) This bill is aimed to stimulate the purchases of hybrid and alternative fuel source cars and their use
b.) To qualify the car cannot run solely on petroleum gasoline, but may be a hybrid running on petroleum gasoline and another fuel source
c.) To qualify you must also continue to own the car, selling or donating your car will invalidate you to further tax breaks

Section 2:
The following tax breaks will be issued for purchasing a hybrid car:
1st Fiscal Year (referred to as FY) of ownership: 50% of price paid for the car
2nd FY of ownership: a value equal to 25% of price paid for the car
3rd FY of ownership: a value equal to 20% of price paid for the car
4th FY of ownership: a value equal to 15% of price paid for the car
5th FY of ownership: a value equal to 10% of price paid for the car
6+ FY of ownership: a value equal to 8% of price paid for the car

Section 3:
This law shall apply to federal income taxes only

Section 4:
This bill shall expire in 2025.

(Sponsor: BrandonH)

[Sam Spade]

This thread needs grammar help.

[Ebowed]

My main concern with this bill, and other proposals of this nature, is that it will merely act as a subsidy for the rich.  Alas, I also disagree with the concept of "tax breaks", since the exact same thing can be achieved by direct spending, at the exact same cost to the government.  Incorporating the issue into the tax code will merely complicate matters to an unnecessary level.

Motion to strike the text of the bill and replace as follows:

Fuel Efficiency and Automobile Reimbursement Bill

1. Persons who purchase a hybrid fuel automobile will be eligible for a partial reimbursement to subsidize the cost of purchase.
a.) No automobile that runs solely on gasoline may be eligible for the partial reimbursement.
2. The government will repay a person 30% back of the price paid for the automobile.
3. To apply for this reimbursement, the person must own the automobile for a period of at least six months.
4. Households earning more than $90,000 annually will not be eligible for the partial reimbursement.
5. Previously existing tax incentives relating to the direct purchase of hybrid automobiles are abolished.
6. Sections 1-4 of this act shall expire thirty-six months after this act becomes law.

[Small Business Owner of Any Repute]

This bill is completely and totally unneeded—there are already two separate laws on the book providing for tax incentives for the purchase of hybrid vehicles.

I might be convinced to support Sen. Ebowed's amendment, but we're going to need to add a further amendment repealing the past hybrid tax incentives, lest we make these vehicles entirely free at taxpayer expense.

[Ebowed]

but we're going to need to add a further amendment repealing the past hybrid tax incentives, lest we make these vehicles entirely free at taxpayer expense.

I've added a section to my proposal to address this concern.

[Small Business Owner of Any Repute]

but we're going to need to add a further amendment repealing the past hybrid tax incentives, lest we make these vehicles entirely free at taxpayer expense.

I've added a section to my proposal to address this concern.

Excellent.  I'm also glad to see the expiry provision, since in 2025, hybrid cars will be technologically outdated (hopefully!) by then.

[Sam Spade]

We are now voting on the following amendment:

Motion to strike the text of the bill and replace as follows:

Fuel Efficiency and Automobile Reimbursement Bill

1. Persons who purchase a hybrid fuel automobile will be eligible for a partial reimbursement to subsidize the cost of purchase.
a.) No automobile that runs solely on gasoline may be eligible for the partial reimbursement.
2. The government will repay a person 30% back of the price paid for the automobile.
3. To apply for this reimbursement, the person must own the automobile for a period of at least six months.
4. Households earning more than $90,000 annually will not be eligible for the partial reimbursement.
5. Previously existing tax incentives relating to the direct purchase of hybrid automobiles are abolished.
6. Sections 1-4 of this act shall expire thirty-six months after this act becomes law.

Please vote Aye, Nay or Abstain.


Nay.

[minionofmidas]

Aye

[Verily]

Aye

[Small Business Owner of Any Repute]

Aye.

[Hatman 🍁]

aye

[Ebowed]

Aye

[Јas]

Tally on Ebowed's Amendment
Aye: 5 (Lewis; Verily; Moderate; Earl; Ebowed)
Nay: 1 (Sam)
Yet to Vote: 4 (afleitch; Al; Brandon; Rob)

[afleitch]

Aye. I'm fine with that

[Sam Spade]

With 6 votes in favor, 1 against and 3 not voting, the amendment has passed.

[Small Business Owner of Any Repute]

My only concerns about the new version of the bill is the unlimited aspect of the credit—I don't want the government giving away tens of thousands of dollars off the price of a luxury automobile simply because it has a hybrid engine.  A $6,000 limit covers the entire 25% on your most basic hybrids, while still covering the increased cost of a hybrid engine for more expensive cars.

I also would like to see people hold on to the cars longer than six months, so I'm going to try bumping it to 12.

And so, motion to amend:

(Amended parts in red.)

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[Verily]

$6,000 seems a bit low. A standard hybrid runs around $20,000, somewhat more than your average car. $8,000 would be more reasonable.

[Small Business Owner of Any Repute]

$6,000 seems a bit low. A standard hybrid runs around $20,000, somewhat more than your average car. $8,000 would be more reasonable.

Upgrading to a hybrid engine costs less than $8,000, which is why I wanted to cap the tax break around the cost of the upgrade.  All the Government needs to do to encourage these things is to make them cost competitive with standard engines, and not just give money away to meet an arbitrary 30% target.

[Small Business Owner of Any Repute]

Upon further research, I just amended the amendment, dropping the 30% to 25%, to better fit the cost of a hybrid.

A 2008 Honda Civic starts at $22,600.  A comparable gas-powered 2008 Civic LX runs $17,560.
($22,600 less 25% = $16,950, slightly less than the gas-powered version.)

A 2008 Chevy Malibu Hybrid has an MSRP of $22,140.  The least expensive gas-powered '08 Malibu has an MSRP of $19,345.  Again, the 25% more than covers the cost of the hybrid engine.

[Sam Spade]

We are now voting on the following three amendments (technically each change in red is a separate amendment in my interpretation of the rules) to the legislation (changes are in red):

2.  The government will provide a one time federal income tax credit of 25% of the pre-tax price paid for the automobile, up to $6,000.

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[/quote]

Please vote Aye, Nay or Abstain.


Aye to all.

[Small Business Owner of Any Repute]

Aye;
Aye;
Aye.

[Hatman 🍁]

nay to all

[Ebowed]

Nay to all.

My main concern here is the concept of "tax credits."  The exact same thing can be achieved through direct spending, at the exact same cost to the government.

[Rob]

Nay to all

[Verily]

Nay
Aye
Nay

I have to agree with Ebowed on the problem with tax credits. They overly complicate the tax code.