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hybrid cars

Tesla Roadster Again Controversial (and this time, it has nothing to do with Jeremy Clarkson)

October 24, 2009 · 3 comments

Tesla Motors LA Flagship Store Launch

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.)

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Increase Gas Tax? Why Not Tax By the Mile?

January 3, 2009 · 12 comments

There has been a lot of discussion lately about increasing the national gas tax. In fact, a proposal to increase the tax, which currently stands at 19 cents per gallon, has been touted as recently as last week. The National Surface Transportation Infrastructure Financing Commission (NSTIFC) has reported that the current infrastructure is dated and needs significant improvements – all of which will cost money that the Treasury doesn’t have.

The NSTIFC has suggested a 10 cent per gallon increase in the federal gas tax to raise revenue – a measure that may actually pass now that gasoline prices have tumbled back down after reaching historic highs in 2008. Time may also be on their side. Congress has not raised the federal gas tax since 1993, more than 15 years ago.

If the feds raise the national gas tax, what will that mean for the states? Will they follow suit? I’m betting yes – with a twist.

Not all of the states are planning a traditional gas tax increase. Oregon leads the nation in a quest for a different kind of tax, a mileage tax. The mileage tax is sort of consumption tax on roads. The idea is that drivers would be taxed on how far they drive rather than how much gas is consumed. Mileage would be calculated using GPS installed in newer cars (older cars would continue to be taxed using the gas tax).

Why change? Almost everyone agrees that the bridges and roads need work. And as cars become more fuel-efficient (we hope) and the price of gas stabilizes (we hope), this means that revenues from the gas tax will not be enough. In other words, those who drive the most miles – and thus use the roads the most – are not necessarily paying the most. Some feel this needs to change.

Oregon isn’t alone. Rhode Island and Idaho are considering a similar tax though based on a self-reporting system rather than the GPS. Chatter about a mileage-based tax has also spread through Colorado, Florida, Minnesota, North Carolina and Pennsylvania.

Congress has given this kind of system some thought, too, though we are clearly years away from seeing anything like this on the national scene.

So is a mileage tax the solution to our infrastructure woes? Tests have gone well in Oregoon. But critics are concerned about potential privacy issues in having government track mileage – and the bigger concern that the tax might eliminate one of the financial incentives for buying a fuel efficient vehicles (though clearly, the gas savings outside of the tax would still be considerable).

What do you think? Keep the gas tax or ditch it for the mileage tax? And if you would keep the gas tax, would you support an increase at the pump if it meant better roads? Any other suggestions?

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