When Top Gear’s Jeremy Clarkson reviewed the electric sports car Tesla Roadster, he had plenty to say. Notably, he complained about the price, which was at the time of filming in the UK, £92,000 (about $150,962.40 US). Lucky for all of you prospective Tesla Roadster buyers, the price has dropped to a mere $109,000. And if you moved to Colorado, you could get your hands on it for a mere fraction of the price.
Colorado? Yeah, you read that right. Colorado is offering a 38% tax credit on the Roadster through the end of the year. That brings the total cost of the Roadster to about $65,000.
It’s not just the Tesla that can take advantage of the credit. It applies to your run of the mill Prius, too. In fact, Colorado is ahead of the pack when it comes to providing tax breaks for hybrid and zero-emission vehicles. The state has been doing it for years.
But it’s the size of the Tesla refund that is attracting attention.
Bowing to pressure from overextended taxpayers, state lawmakers passed a bill which would cap such refunds at $6,000. The bill, however, doesn’t take effect until next year. That means that there’s still plenty of time to take advantage of the refund this year.
Though state lawmakers didn’t expect to see more than 10 Tesla refunds, one Tesla dealership has reported selling six cars this week alone. That’s about $252,000 in refunds in one week. That’s not a pace that taxpayers are happy to see when faced with a $320 million deficit in the state budget.
Of course, there are some restrictions on the refund. For one, to qualify, the vehicle must be titled and registered in Colorado. And the credit is only available in the year that the car was purchased.
However, since it’s a tax credit (and not a flat out dollars back refund), there is a chance that the amount of the credit could exceed a taxpayer’s net tax liability for the year. If that happens, any excess credit may be carried forward and claimed on future year returns for up to five years.
So, it may not turn out be the kind of hit that taxpayers fear. That still doesn’t make taxpayers feel better about what’s perceived as an irresponsible tax policy. The amount of the refund alone, it has been noted, is more than many taxpayers will pay for the total cost of their car. In a tight economy, this isn’t the kind of thing that sits well with many folks.
What do you think? Fair game or bad policy?
And if you’re interested, you can watch the controversial “Top Gear” review of the Tesla Roadster here:
(In case you missed the scandal, the BBC later admitted that the scene of the car being pushed into the garage was not a result of the alleged 55 mile fail.)
Every summer, my husband and I have the same argument about whether we should get central air. We live in an old Victorian house in Philadelphia; it takes a while during the summer for the house to heat up but when it does, hoo boy, it gets hot. The thing is, it’s not easy to install central air in the house because of the layout – and there’s no existing duct work.
This year, it’s even more complicated because our old heater has probably sputtered its last burst of warm air. When we bought our house (more than ten years ago), the heater was about 45 years old. So, well, you do the math. We know that we need to replace the heater but my husband wants to replace it with a heater/air conditioning unit – which brings us back to our original problem regarding the air conditioning.
We’ve been pushing off the decision for years (and years). But Congress may have successfully forced our hand. Under the current tax laws, we have until December 2010 to make up our minds and install a new energy efficient unit in order to qualify for a tax credit. And it’s not a small tax credit. The tax credit is up to 30% of the cost of energy efficient water heaters, air conditioners, furnaces, windows and doors – up to a maximum of $1,500.
Let’s run those numbers. Our quotes have been between $5000 and $10000 for a new unit. Taking the average, let’s say that the new unit costs us $7500. The available credit on that unit would be the maximum, $1500, since 30% of $7500 is $2250 (over the cap). Credits are dollar for dollar reductions in your taxes due – as opposed to deductions which merely reduce your taxable income. So while it feels like we’re saving $1500, let’s think about it in a different way. Assuming we’re in a 25% bracket, that $1500 credit offsets the equivalent of $6000 in taxable income. We’re now talking mortgage interest deduction type numbers – see why credits are a great thing?
As long as we buy a qualifying unit, we get the tax credit and we save some money on our electric bill. Don’t even get me started on the energy savings. You can guess how much we’re spending on window units in the summer and heating costs in the winter. It’s not pretty.
It’s not just air conditioning units and furnaces that may qualify. Windows, doors and other appliances may be eligible for a federal tax credit. For a complete list of qualifying energy efficient appliances and home improvements, check out the Energy Star web site.
Some states offer energy tax credits which can be applied towards your state tax liability. Unfortunately for us, Pennsylvania isn’t one of those states with respect to appliances (to see a list of states which do offer incentives, click here).
And I’m not usually one to tip my hat to utility companies, but several offer programs that provide rebates, grants or loans towards the purchase of more energy efficient units. Check with your provider for more details.
So, with a little push from Congress, I think it’s settled that we’ll be moving forward on a new unit fairly soon. The only trick now is doing it without conceding to my husband that he’s right…
(Image courtesy of Wikimedia Commons and is in the public domain)
Seattle voters firmly rejected the measure in a vote this month. The bill, had it passed, would have made Seattle the first city to tax both plastic and paper shopping bags. The measure would have required certain retailers to tack on an additional 20 cent tax per bag. The idea was that the tax would have served as an incentive to stop using disposable bags.
Supporters of the measure were disappointed but not swayed from their cause. They noted that their opponents spent nearly 15 times more than they did on advertising, lead by the American Chemistry Council, and yet the measure was defeated by only a factor of 3 to 2. For the supporters, it was a good first step.
Those in opposition to the measure were pleased to see it rejected, referring to it as “costly” and “unnecessary.”
So the matter is done… for now. There’s no doubt that it will be raised again. 2010 anyone?
When you think about sin taxes, you normally think about things that are bad for you such as cigarettes, booze and, if Congress gets its way, soda and sugary drinks.
Now, sin taxes are taking on a different slant: taxing things that are bad for the planet.
In Seattle, there is a bill pending to add a 20 cent tax on paper and plastic grocery bags. City voters will take up the bill on August 18.
In the meanwhile, both sides of the debate are putting serious time and resources into getting the word out. The American Chemistry Council, a lobby for the plastics industry, has reportedly spent more than $1 million on efforts to stop the bill.
Proponents, however, argue that the tax will both force residents to act responsibly and will raise revenue for environmental projects such as “waste prevention, recycling, city cleanup and environmental education programs.” Seattle expects to raise about $3 million per year from the tax.
A recent poll in Seattle shows a slight majority, 51%, of voters oppose the tax. However, another estimate shows that nearly 90% of Seattle residents regularly recycle or reuse plastic bags. While both sides sling mud at each other, it would appear to this east coast girl that maybe it’s not so much about opposing the usage of plastic bags but being taxed on the usage.
This is what I can’t stand about these debates. The rhetoric gets in the way of the message. The real question shouldn’t be “do you care about the environment?” but “is this the best solution to the problem?” Maybe raising revenue for environmental projects is a good thing; maybe it’s wasteful. I don’t live in Seattle, so I can’t speak to what makes good policy for the city. But I will say that I don’t believe that trying to pass a tax by labeling folks as “for” or “against” saving the environment is a constructive use of resources. It’s like saying that everyone that opposes the soda tax secretly wants to be fat.
We’ll know in a couple of weeks what the outcome is for Seattle. If the measure passes, it would tax bags at grocery stores, drug stores and convenience stores. This is similar to the Washington, DC tax approved earlier this year which imposes a 5 cent tax on carryout bags at grocery stores, drug stores, and retail food establishments. Hmm, that would make the tax applicable on cities on the east and west coasts. Maybe the midwest is next?
[Editor's note: No, you're not going nuts. I hit "publish" this morning before I meant to, which means that the first button didn't have the lovely plastic bag photo (courtesy of Wikimedia Commons and DanRos) and had a few typos. That's what happens when you're traveling and have to rely on hotel coffee.]
Cities are getting mighty creative in their efforts to fight rising deficits. No run of the mill income/wage/salary/vocation tax increases here. Philadelphia wants to raise its sales tax; Oakland is taxing marijuana and now DC is considering raising… its gas tax?
DC Council Member Tommy Wells (D) has suggested a gas tax hike of [...]
Taxpayer asks:
Tell me this isn’t true. I got an email today that says that Congress is considering an extra tax on toilet paper. The email says that the Democrats have passed law to tax toilet paper to prevent global warming. I don’t believe in global warming and I think this is a [...]
It’s Fix the Tax Code Friday! This week, I’ve been researching federal energy tax credits for an Earth Day post that I’m writing (yes, I’m aware that Earth Day is long gone – wait for the post, you’ll get it). I’ve been intrigued to see the reactions on both sides of the aisle [...]
In what feels like deja vu all over again, the Senate and the House failed to worked together over the past two weeks to pass legislation.
Last week, the Senate voted 93-2 to extend the solar energy investment and wind energy production tax credits. The credits were set to expire at the end [...]
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French Prime Minister Francois Fillon has announced that the country will not tax sporks and other plastic utensils after all.
The French government has conceded that now is perhaps not the best time to introduce the products now because many French are already worried about their declining purchasing power. Indeed, those [...]
You only have to a take a peek at the Olympic coverage on NBC to confirm what tourists already know: China has a smog problem.
On the opening day of the Olympic games in Beijing, video and photos showed shots such as the one above, of the National Stadium, shrouded in smog. And [...]
