GOP Screws over Middle Class W Hybrid Tax Credit

[mod mom]

Hybrid tax credit bait and switch
Edward F. McQuarrie
Friday, January 26, 2007


If you are among the 150,000-plus proud purchasers of a hybrid gas-electric car during 2006, please sit down. I have bad news. Many of you will not receive the full tax credit that you expected.

To recap, in 2005, Congress passed an energy bill with numerous incentives to encourage conservation. One of these provisions provided a tax credit, beginning January 2006, for purchasers of approved hybrid gas-electric automobiles. This tax credit can be substantial -- up to $3,150 for the Toyota Prius, perhaps the best known hybrid.

Unfortunately, unless you earn more than $750,000 a year, you can't be sure you will qualify for the full published credit for your vehicle. This "gotcha" applies even if you bought the car well before October, when the tax credit for Toyota vehicles began to be reduced, per the 2005 law, because more than 60,000 Toyota hybrids had been sold.

Few Californian families with income between $150,000 and $500,000 will qualify for a penny of the credit. And under this bizarre legislation, at lower income levels, the smaller your family, the bigger the credit allowed. Likewise, single taxpayers will mostly be OK.

-snip
http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2007/01/26/EDGC7N75RT1.DTL

[rumpel]

1. lunacy

figures

[Captain Hilts]

2. Thank god they got rid of the Estate Tax! Whew! nt

[mod mom]

3. WANT TO REALLY GET PO-ed? Read this

Hybrid Watchdog: SUV Tax Loophole vs. Hybrid Tax Credits

"A Hummer of a Loophole"
Origin of the SUV Tax Deduction: "A Hummer of a Loophole"

A 1997 provision in the U.S. tax code (Section 179) provided small businesses with a tax write-off of up to $25,000 for a vehicle weighing more than 6,000 pounds- used 50% of the time for work purposes. The original intent behind this provision was to encourage investments in pickup trucks, minivans, and other needed service vehicles.  A far smaller incentive was provided for cars--less than $7,000 over two years.
Today’s average vehicle fuel economy is at a 20 year low (24 mpg on government tests).

The explosion of SUV, pickup, and minivan sales in America's passenger vehicle fleet has turned this small business benefit into a massive loophole in the tax law.  Currently, 38 different passenger SUVs including the Lincoln Navigator, which nets a combined 15 miles per gallon according to the Environmental Protection Agency (EPA), the Cadillac Escalade (16 mpg), the BMW X5 (18 mpg), the Mercedes-Benz ML55 (16 mpg), and the notorious Hummer H2 (estimated 11 mpg) all weigh more than 6,000 pounds.  This loophole allows some of the most fuel-inefficient passenger vehicles on the road today to qualify for a significant tax break.

In 2003, the Bush administration proposed increasing the tax deduction to $75,000. Lawmakers responded by expanding it to a whopping $100,000 as part of the $350 million tax cut package.  Yet Congress did not change the weight-based classification of the vehicles, creating a huge benefit for the largest, least efficient vehicles.

-snip
http://www.hybridcenter.org/hybrid-vs-hummer.html

?

[AndyTiedye]

6. If I Build an EV and Put in 6000 Pounds of Batteries, Will It Qualify for Both Tax Credits?

[mod mom]

4. BTW this site is a project of the Union on Concerned Scientists!

oops meant to link to thread # 3, my bad!

[bananas]

5. Republicans - always finding new ways to screw people over. nt