Subject: Dang it !!!!!!!! :o)
If
you traded in a clunker worth $3500, you get $4500 off for
an apparent "savings" of
$1000.
However,
you have to pay taxes on the $4500 come April 15th
(something that no auto dealer will tell you). If you are in
the 30% tax bracket, you will pay $1350 on that
$4500.
So,
rather than save $1000, you actually pay an extra $350 to
the feds. In addition, you traded in a car that was most
likely paid for. Now you have 4 or 5 years of payments on a
car that you did not need, and your clunker was costing you
less to run than the payments that you will now be
making.
But
wait, there is more: You also got ripped off
by the dealer.
For
example, every dealer here in LA was selling the Ford Focus
with all the goodies including A/C, auto transmission, power
windows, etc for $12,500 the month before the "cash for
clunkers" program
started.
When
"cash for clunkers" came along, they stopped
discounting them and instead sold them at the list price of
$15,500. So, you paid $3000 more than you would have the
month before. (Honda, Toyota, and Kia played the same list
price game that Ford and Chevy
did).
So
lets do the final tally
here:
You
traded in a car worth: $3500
You
got a discount of: $4500
Net
so far +$1000
But
you have to pay: $1350 in taxes on the
$4500
Net
so far: -$350
And
you paid: $3000 more than the car was selling for the month
before
Net
-$3350
We
could also add in the additional taxes (sales tax, state
tax, etc.) on the extra $3000 that you paid for the car,
along with the 5 years of interest on the car loan but lets
just stop here.
So
who actually made out on the deal? The feds collected taxes
on the car along with taxes on the $4500 they
"gave" you. The car dealers made an extra $3000 or
more on every car they sold along with the kickbacks from
the manufacturers and the loan companies. The manufacturers
got to dump lots of cars they could not give away the month
before. And the poor stupid consumer got saddled with even
more debt that they cannot
afford.
The
Obama administration convinced Joe consumer that he was
getting $4500 in "free" money from the
"government" when in fact Joe was giving away his
$3500 car and paying an additional $3350 for the
privilege.
Posts
8 comments:
...
What if, along with trading in your car, you held off on buying the Kingfisher 9000 Powerboat you saw on SPEED Network with the testicle warmer and gun rack(upon which a gun rack rests), had that extra cash, and didn't use a car loaner program? Or what if you went with the Chevy Aveo? Or the Cobalt? Or, instead of kowtowing to American car businesses who, time and time again, have underperformed and underwhelmed consumers, you bought a good car? And what would ever happen if the personal responsibility party ever took.. personal responsibility? This site would probably cease to exist. (lol not)
You know, my brother got a car via Cash for Clunkers. He traded in a truck that was on its last leg and worth far less than $3500. He bought a car (a super-efficient Fit) that he'd had his eye on since they came out. He avoided getting "ripped off" by the dealer by doing his homework and finding out what the invoice price was and negotiating from there. Without Cash for Clunkers he wouldn't have traded up to a new car - he probably would have had to buy another used car, which wouldn't have benefited as many companies along the supply chain.
Yes, he bought Japanese, and yes, he now has to make payments he didn't have before, but overall he was happy with the exchange. So, this forward doesn't paint a very complete picture of the program, but who's surprised there?
If I
1) make up asssumptions about what cars are selling for and
2) make assumptions that you paid what I claim is the sticker price, and
3)assume you are in the 30% tax bracket, and
4) put the numbers in a column with plus and minus signs,
Then I am making an argument with "facts", and you should take my word for it!
Because I used NUMBERS! and ARITHMETIC SIGNS! and PERCENTAGES!
How many people who forward this are actually in the 30% tax bracket, do you think? I beleive the 30% tax bracket starts at around $150,000/year for a single person.
Which tells me that if there is any truth to this e-mail, it basically means that affluent people who paid sticker (and who, for some reason, were driving a clunker) might not have benefitted much from this program - what with them being in a high tax bracket, on account of being affluent, and all.
Doesn't anybody worry about the 30% tax bracket anymore?! We're in a recession, you know!
I know quite a few people in the 30% tax bracket (srsly) who were driving older cars - perhaps not quite clunkers but rather old. And they were very happy for this cash for clunkers program.
Most of them had also done their homework; picked out whatever was a good deal for them; and felt satisfied with the transaction.
None of them really needed the cash for clunkers program, but everyone likes a deal - right? I heard nothing about downsides due to their higher tax bracket.
That said, the economy was stimulated bc they bought a new vehicle. And yes, most purchased either Japanese or German brands, but most of those vehicles are actually built in the USA utilizing a US workforce, plus the dealerships are USA owned with US employees, and so on.
So, of course, wingtards wish to make up their own little "facts" as proof about how appalling simply everything is since that "n" word got in the white house, but... my observation is that it was the higher tax bracket Repugs of my acquaintance who took immediate advantage of this program, although I'm sure lower income/tax bracket folks did as well.
Bitter, bitter, bitter
There's actually no 30% tax bracket.
28% applies to married couples making $137,050-200,300 or singles making $82,250-171-550.
33% applies to couples making $208,850-372,950 or singles making $171,550-372,950.
Thanks, Anon. Some of my cash for clunkers rightie pals are in the 28% bracket, and some are in the 33% bracket. One couple may even be in a higher bracket.
And again: they were all very happily praising the program and feeling satisfied w/it.
But yeah: FAIL on the part of this skreed for not getting the tax brackets correct, but no surprises there. Just pull "facts" outta their left butt cheeks - why not? Doesn't everyone?
Hurr....
I traded in my clunker for $4500 and got a new car that cost me $18,000! I lost $13,5000!!!!!
Damn socialists!!
Too bad the Cash For Clunkers rebate is NOT federally taxable: http://www.fiscalgeek.com/2009/08/cash-for-clunkers-taxable-no-not-for-federal-but-maybe-for-state/
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