Recently in Tax incentives Category

I'm reading Fisker to Buy Delaware GM Plant for Plug-In Hybrid Production and it all sounds great on the surface.

Fisker Automotive is buying an old GM factory in Delaware and it will employ 2,000 workers plus supplier jobs. The family-oriented, plug-in hybrid sedan will sell for $39K after a tax credit which could be $7,500?

The catch of a tax credit is that you have to float the amount until the tax check comes. So really you are buying (borrowing for with interest) a $45K family sedan and getting a refund later.

Funding for the deal will come from a conditional loan of $528.7 million from the U.S. Department of Energy.

That's taxpayer money going into a technology laden, hardware heavy vehicle that will compete with the other hybrids with proven track records that weren't subsidized.

If it's a plug-in hybrid then it will compete with the Chevy (vaporware) Volt which will sell in the $40K range and also pull more from the electrical grid than deserts in the Middle East.

Reality check.

People who pay taxes in this country are competing with India and China in a global economy. We are competing with people who ride scooters to work and exist on a much lower standard of living. We haven't gotten this concept yet, but it's evident in the slow job growth and eroding standard of living for the average US worker.

We need to be lean and create lean ideas for conserving resources, not convoluted tax programs for high tech limited production luxury cars.

Give me algae gasoline, give me clean diesel, give me a plug-in hybrid car if I live in Quebec where 90+% of the electric is generated by hydro.

Just give me some simple energy solutions for my tax dollar that will look ahead 30 years.

What was more useful to consumers, $700 billion bailout of banks, insurance companies and Wall Street, $180 billion to AIG ...or $1 billion that brought families scrambling for a $4,500 rebate on a new car that may save them $1K a year in gas, a 200 % rise in dealership traffic and a few car factories working overtime.

Clunker Class War - nyt.com/blog

Plug in "Cash for Clunkers" on YouTube and you get a stream of dramatic engine explosions with glove donned car technicians pouring in sodium silicate (liquid glass) and performing the not so painless death to vehicles.

They are often hooting and carrying on with the same glee that I might get from smashing a computer or a camera at the end of a long week.

Some of my friends in the used car business respond to these videos like an animal lover exposed to senseless pet murders.

Top Purchased
1. Ford Focus (built in Wayne, Mich.)
2. Toyota Corolla (assembled by Toyota in either California or Ontario)
3. Honda Civic (95% are built in Indiana or Ontario of U.S. made engines)
4. Toyota Prius (Japan)
5. Toyota Camry ("almost all" of the Camrys sold here are assembled at plants in Kentucky and Indiana)
6. Ford Escape FWD (Kansas City)
7. Hyundai Elantra (South Korea)
8. Dodge Caliber (Belvidere, Illinois)
9. Honda Fit (Japan)
10. Chevrolet Cobalt (Lordstown, OH)

Ford turned its first sales increase since November 2007, with the top seller from a sacrificed clunker. Ironically, Ford is the top clunker

One of the first principles of physics that I learned in high school is that matter cannot be created not destroyed, only changed from one form to another.

A burning stick is in essence a battery - energy from the sun is stored in plants and released through oxidation (burning). Energy storage will become as important an invention as generation as we run screaming from oil.

General Electric announced this week a $100 million investment to build a new factory in upstate New York that will make sodium based batteries -- a sector with huge potential, according to G.E.'s chairman and chief executive, Jeffrey Immelt. nyt.com

Sodium based batteries are highly efficient in large applications like storing power from wind turbines or in use in heavy demand applications like locomotives.

Ford experimented with sodium-sulfur batteries in the Ford "Ecostar" prototype EV in the early 1990's, but other battery types proved more suitable for smaller applications.

Energy efficiency can be increased when energy is cheap to produce, store, and released at a later time.

• Think of the batteries that work with a gasoline hybrid


• Think of water reservoir storage systems for electrical utilities


• Think of peak demand vs. low demand for a utility

OK, let's just get it out there: The 2010 Ford Fusion hybrid is the best gasoline-electric hybrid yet.

What makes it (Ford Fusion Hybrid) best is a top-drawer blend of an already very good midsize sedan with the industry's smoothest, best-integrated gas-electric power system. It's so well-done that you have to look to the $107,000 Lexus LS 600h hybrid to come close. usatoday.com/money

The journalist tester got 40 mpg in a series of short trips out of a car that weighs 3,720 lbs and says Ford has mastered removing the engine start-up "shutter" usually associated with this type of hybrid power plant.

It's interesting to read the heated reader replies from this story. It's a lesson of just how long it takes a car company to build and destroy perceptions. Big deal!!!!I have a Honda Civic Hybrid and I get 50mpg. Having the experience of owning a 1997 Taurus and a 1998 Camry and watching their depreciation,...Let's stick to the facts. Get Consumers Reports...

I have driven a normally powered Ford Fusion and was nicely surprised at the feel and fit. It feels and looks more European than Ford sedans of old and I am a Civic Hybrid, former VW TDI and BMW bike owner.

The car is bigger and heavier than a Honda Civic Hybrid so the mileage is in line or better than the competition. Consumer Reports now says that Fords are equal to Honda in reliability.

Fusion Hybrids are also eligible for a tax credit until the end of March.

Time will tell if reality will change perceptions, but the facts are stacking in Ford's favor as well as a projection I have that Americans will begin to make a concerted effort to start coming home to spend their dollars where it will do the most good for their own future.

Even if the Fusion Hybrid is assembled in Mexico; at least it's a North American country that shares our border and it isn't a communist, currency manipulator. It is a noble effort by an American automobile company to use brain power to harness new technology to offer the American car market with an efficient, well designed hybrid car.

General Motors, Ford, and Chrysler had a combined US market share of 51.8% in December 2007. As of Oct. 2008, their market share declined by 5.1% to 46.5%. Toyota and Honda, during that same nine-month period, increased their US market shares by 3.1% to a combined 28.4%.

In 2007, the Big Three sold 18 million autos for $387.5 billion. In 2007, Toyota and Honda sold 12.2 millions cars for $304 billion.

In the US, the Big Three directly employ 242,000 people and an estimated 2.5 to 3 million indirectly.

Ford received a $1.29 billion tax refund in 2007 while General Motors paid $37.16 billion in 2007 taxes.

www.marketwatch.com

The federal tax credit to spur demand and development of hybrids is dwindling. The credit was tied to the number of units sold by a given manufacturer. The credit on Toyota's Prius (46 mpg) ran out last year. Now the federal government is phasing out the same incentives on Honda's Civic Hybrid (42 mpg).

Hybrid tax incentives start to go away when a car maker sells its 60,000th alternative-fuel vehicle.

Manufacturers currently offering full tax credits for their hybrids include:

• GM's 2008 Chevrolet Malibu Hybrid


• Ford's 2009 Escape/Mercury Mariner Hybrid


• Nissan Motor Co.'s Altima Hybrid

The article notes that these hybrids get between 27-34 mpg.

It would still take about nine and a half years to recoup the Altima hybrid's premium at the pump. But that time frame would balloon to16 years without the tax credit. With gas at $4 a gallon, it would take about seven years.

wsj.com

So with gas currently at $2 a gallon, buying a hybrid (with the surcharge) without the tax credit, the pay back may exceed the life of the car. We all know gas won't be $2 for the next decade.

When I bought my Civic Hybrid in 2004, there was a four digit federal tax incentive. Since I have owned the car and driven it 71,000 miles there have been no repairs other than oil changes and filters. Over the past four years gasoline has gone from $2 to $4 and back again. I consistently get 45 mpg, with spikes above 50 on long trips.

With my factors considered to date, the hybrid has saved me money, reduced the trade deficit a couple dollars and deprived a few oil producing entities a few dollars of profit.

HOUSTON -- ExxonMobil (XOM), the world's largest publicly traded oil company, reported income Thursday that shattered its own record for the biggest profit by a U.S. corporation, earning $14.83 billion in the third quarter. usatoday.com

Can someone explain to me why they need more tax cuts?

Reinvesting to get more oil...they will hold us hostage and charge us more if their profit is cut...we all invest in oil with our pensions and 401-K and it would hurt us...

I need a reason to understand why this policy is a long-term investment in the future of a baby born today.

One of my hobbies is building hot water heating systems. I love to tune up an old steam radiator system. I am at home with pipes so my only reference for this project is my brain and maybe some inherited subconscious from my grandfather's HVAC business, Kuehnel Sheet Metal.

My friends at P.H. Plumbing Distributors, in York, once told me the qualifications for being a plumber are to know what time it is for dinner and than sh__ flows downhill. Well, it's not quite that simple in an age of building codes, but common sense and plumbing goes a long way.

Rain falls from the sky and runs to the lowest point on your property. Your house and gutter are a rainwater collector. If your house sits on the high part of your property, as it does in my case, then your system can use gravity to guide the natural flow of water.

My installation is on a row house, so I can "steal" part of my neighbor's water too. Chuck doesn't care because he is too busy riding his new scooter.

I didn't want to use electricity. There is a surprising amount of pressure from the bottom of a tank holding 100 gallons of water. My gravity fed spigot can fed from a 1/2 inch pipe and water 90% of my property with a hose. The outlet fill a container as quickly as my home's 55 psi city water spigot. I wanted to leave enough room beneath the spigot to fill a 5 gallon container.

NEXT: Parts and free pieces, we get dirty under the deck.

I supposed the clinical thing to do would be to calculate cost vs. environmental impact and come up with a nice squeaky green conclusion, but recently my conclusions seem to be made more out a belief that our open ("free" doesn't really apply) market for energy needs to be placed in check by the only force that can bring change.

Calculated, individual consumer choices multiplied by millions of people.

My friend Matt has a company car with paid gas for personal use. He said to me today, "I don't care if the gas is free - I just want to use my motorcycle because it doesn't use (uses half) gas." In 2004, he purchased (which he can't sell now) a Chevy Suburban that gets 15 mpg and never considered the price of gas.

My neighbor Chuck's new full-sized pickup is now collecting dirt around the wheels for sometimes two weeks at a time. He drives a 115 mpg scooter to work.

My retired neighbor on a fixed budget told me today, "I am going to hold on to my economic stimulus check so i can pay for fuel oil this Winter" A tax money give-a-way to spark the economy, funneled into the oil machine that is squeezing the economy in the first place.

We are entering the uncharted free market waters. Huge global energy monopolies that use raw materials that are irresistible to investors and tied to everything as a reason to make it more expensive. We can't regulate it, tax it or force it to do anything. The concept of oil just got too big in business and in our hearts.

The only force that can save the world from suicidal greed; the consumer stands alone with a choice to become super hero or victim.

I like the electric lawn mower more than the gas, simply because it does not use gas. It's two gallons of gasoline that went unsold this Summer.

Big Oil makes big profit and pays big taxes.

Some of the presidential candidates are screaming for a windfall profit tax on oil companies.

From 2003 to 2007, Exxon's earnings grew by 89%, while income taxes grew by 170%. Much of that growth was overseas. Exxon paid $9.3 billion in worldwide income taxes in the first quarter of 2008, representing a 49% tax rate on its gross income of $20.2 billion.

businessweek.com

In related news, When Congress passed the 2007 energy bill in December, it kept tax credits for oil and gas companies while allowing those for wind and solar power to expire this year.

The evil "big oil" equation is more than a few companies being evil profit mongers. It is about a profit stream that has developed that feeds things like dividends, commodities, and retirement accounts via 401-K and pension investments.

It's a tidal wave of money blasting it's way through Capitalism. It's too much of one thing, one force, one method of thinking; tunnel vision blinded by rows of zeros after the $.

With gasoline prices hitting a new high every day, the presidential candidates have been seasoning their speeches with blame and Band-Aids.

Barack Obama said that Democratic rival Hillary Clinton and presumptive Republican nominee John McCain are part of a Washington establishment that has failed to stand up to oil companies. McCain and the Republican National Committee are accusing Obama of flip-flopping on the idea of suspending the federal gas tax to help consumers. And Clinton is bashing Obama for voting for an energy bill that included tax breaks for oil companies. (Boston Globe)

It's tempting in an election year to appear to be cutting taxes, but in reality the 18 cents of tax that would be withheld cuts money from highway projects and mass transit. If anything, we should funnel all that money into mass transit and away from highways during the "gas tax holiday" so we can actually dig ourselves out of this hole. The US consumer has been enjoying a holiday from the real cost of oil dependence for some time.

A summertime reprieve from the gas tax will only promote consumption and delay the inevitable adoption of fuel efficiency by consumers. Adding to our own consumption is the growth by developing nations which continue to gobble oil even during the proposed US holiday.

The price of gas will probably increase more than 18 cents over the Summer, adding to the pointlessness when we get hit in the fall with the tax again at the start of the heating season.

Borrowing time from debt will not slow down the crisis, only reduce the tools needed to save ourselves. The only thing i can think of that would be more silly would be to give every person in the United States $600 to help stimulate an economy built on bad fundamentals, paid for by their own tax dollars that have disappeared into a $9,3336.468,539,220 national debt.

The York County Chamber of Commerce has studied I-83 and is presenting it's findings in a three part series in their Watchdog e-newsletter.
Some points:

--Highway construction costs are up 43%
--Would you be willing to support an increase in the gas tax, if it meant improved capacity on our highways?
--IRS hikes 2008 commuter benefit tax incentive
As more workers factor the price of their commute into their job choices, more employers are looking for ways to help employees cut their commuting costs. The IRS is helping by increasing to $115 per month the amount that can be set aside in a worker's qualified, tax-free transportation fringe benefit plan.

It seems odd that federal taxpayer dollars are used to enhance urban sprawl and congestion while we search for new revenue to build them bigger... fight air pollution and try to find ways to reduce dependency on foreign oil as the price of oil steadily rises.

Some cities, like Baltimore, are promoting work in your neighborhood programs to keep people from commuting.

So there could be a larger gas tax to help pay for larger highways that taxpayers fund demand by helping commuters make employment "choices" to drive further from their workplace. Sounds like an increasingly expensive cycle with no end in sight.

A lesson in environmentalism

The United States economy was built on production and consumption. Our fabric was woven from the Henry Ford concept; if you pay people a decent wage future consumers can afford to buy the products they produce.

Production increased, consumption increased; a loving relationship that lasted for decades. Business expanded searching for new markets in a global economy fed by communication and transportation. Business capitalized on new markets, now possible to exploit, polarizing labor and consumption in the United States.

Two key indicators in the past week indicated a tipping point:

1. A drop in the nonmanufacturing index caused turmoil in the markets because production has been dropping for years. wsj.com
During this decade things like banks and restaurants have come to make up 2/3 of our economy. The focus of our economy has moved from producing to interacting with people and serving customer rather than transforming physical goods. We don't make anything anymore. When you serve, you loose the ability to create and innovate. You also loose the connection between what is created and the costs and consequences of creation.

2. The government/consumer money shot. Politicians of both parties want to avert recession with a quick cash give-a-way so people can buy. The irony of which is paid for by consumer tax dollars or taxed on the debt of future generations by further ballooning the federal deficit. Living on debt, without backing, got us into this mess in the first place. A panic gesture, continuing to throw Band-Aids on a psychotic pyramid scheme. Throwing twigs on a dying fire, this is a defining moment of our economy.

I am sitting here staring at my screen as the sun comes up showering golden rays across my screen... thinking of a conclusion. Maybe the sunrise is my conclusion.

In a post consum(er)ption era, the consumer is the solution. We hold the greatest numbers and define the greatest change of behavior. The beauty of Democracy coupled to Capitalism is that even in failure we have been handed the tools to fix it.

You really can't fault someone from Baltimore for seeking a better quality of life by buying a house here in York and commuting to Baltimore. Real estate prices, taxes and a high cost for life that come with high population densities in urban areas like Baltimore has pushed people into their cars and up Interstate 83.

Unfortunately, this consumes a massive amount of gasoline, clogs roads and creates bedroom communities that rob both Baltimore, York and in the end the commuter of a fully functioning life as they seek to survive in an never ending spiral of costs.

Once in a land long, long ago. cities like York were built up around factories. People walked to work, or took electric trolleys. They went to churches, pubs and stores in their community and were able to invest the time spent commuting into their children and neighborhoods. When your whole life is your community, you have an intense interest in preserving it's whole.

Baltimore City will contribute $1,000 per employee, which will be matched by over 85 participating employers. Employees will be required to contribute a minimum of $1,000 cash toward the purchase of their home. It's the idea of getting people back to living where they work.

livebaltimore.com/hb/inc/lnyw/

A federal income-tax credit on the Honda Civic Hybrid will drop to $1,050 on January 1, down from $2,100 today.

The law limits the biggest credits to roughly the first 60,000 hybrids that each carmaker sells providing an incentive for domestic manufactures as the program matures. Tax credits have already phased out on hybrids from Toyota and Lexus brand.
bostonherald.com/business

Clean diesel technology offers consumers a viable alternative to gasoline using technology that has already evolved and can be further tweaked. It is fuel with an entrenched fuel infrastructure that can be substituted with bio-fuels as inventiveness blossoms.

GEO2 Technologies is one of the flowers bearing fruit by developing a ceramic composite material for use as catalyst support substrates and particulate filters for diesel engines. According to their website, the technology can reduce manufactures cost by 30% with a product that offers low back pressure and a high filtering capacity.

About half of the vehicles in Europe are diesel while the technology in the U.S. stands at about 2%. A diesel engine is about 20% more efficient than a gasoline engine. Diesel ,gallon for gallon, creates more energy.

Source:U.S. Gov. Energy Infromation

There still a cost consideration to the consumer for running gasoline over petroleum diesel which is quite substantial in some parts of the country. If there is a 45 cent per gallon cost difference between each fuel as it often is here in York, Pennsylvania, a 20% gain in efficiency is quickly eroded. There are more taxes paid at the pump for diesel, which is an attempt to extract over-the-road charges for trucking. However, the diesel will probably be simpler, cheaper and easier to maintain in a high mileage vehicle than a gasoline hybrid.

Unlike corn based ethanol production (that places pressure on food stock with a highly taxpayer subsidized fuel that takes great amounts of energy to produce a fuel that is less efficient than fossil fuels), increasing clean diesel production isn't diverting a commodity jacking up prices/inflation for consumers.

If you need more diesel, you will need less gasoline the equation on the equity market actually decreases. As a bonus the cars running diesel take 20% less fuel so less crude is needed and we become less energy dependent.

While many countries have adopted diesel as their dominant fuel due to the necessity of historically overall high energy prices, the U.S. has historically enjoyed cheap gasoline and marginalized diesel via marketing and tax structure as a working fuel (for trucks/trains/farm).

The biggest hurdle to drawing in clean diesel technology as one of our short-term Band-Aid energy solutions will be overcoming a long standing perception by consumers and bureaucrats that this is a truck fuel and shouldn't be part of the equation. Propelling an idea that doesn't create large profits for a large market force and only may benefit the consumer in the short-term isn't a market motivator.

Change behavior by taking your money

New York City is toying with the idea of charging cars $8 and trucks $21 to enter Manhattan's business district, other U.S. cities are also toying with the idea.

Other ideas include dropping subway bus/fares, odd/even license plates, increasing other tolls into the city and lowering fees for energy efficient trucks. wcbs/tv

Voluntary conservation measures have a long standing history of not working in the United States. It usually takes financial penalty to change behavior Even in the case of high gas prices, the consumption rate continues to climb.

It is the nature of Americans to strive to "profit" against each other and nature - size and level of consumption are the marks of success. The independence of stretching out in our own automobile has become part of our identity. At some point the penalty, either by shortage or cost will change behavior.

Section 45 of the tax code calls for tax credits for electricity produced from certain renewable resources, including poultry waste, as well as wood shavings, straw, rice hulls and other bedding material for the disposition of manure. The rational is that it is better to burn it than let it seep into the ground water even though the EPA already requires chicken farmers to take actions regarding waste disposal.

This and others like clean-coal tax credit, which promotes coal over cleaner energies is known as a windfall by lobbyists, is enacted by legislatures and paid for by consumers.

With the Volumetric Ethanol Excise Tax Credit, a federal tax credit that took effect in 2005, when you buy E10 at the pump (which is 10 percent ethanol), the company that blended the fuel is getting a tax credit of 5 cents for every gallon you buy.

Add all the corn and ethanol subsidies up, according to the International Institute for Sustainable Development, and you have subsidies approaching $1.40 per gallon of ethanol.

The Irish Minister for Finance Brian Cowen is reportedly going to stop tax breaks for large hybrid cars in next month's budget. A number of Irish government ministers have recently switched their business cars to large hybrid sedans.

Europe is already has a plentiful supply of clean running small diesel cars which environmentalists claim produce less emissions than large hybrid cars and SUV’s
http://www.irishexaminer.com/breaking/story.asp?j=202359368&p=zxz36xx74&n=202360128

In the United States,

The qualified Alternative Fuel Motor Vehicle Credit was enacted by the Energy Policy Act of 2005. The new credit includes separate credits for four distinct categories:
1. fuel cell vehicles
2. advanced lean burn technology vehicles
3. hybrid vehicles
4. alternative fuel vehicles.

Lacking tax/social incentives and suffering from import duties, the Toyota Prius isn’t selling well in China. The Chinese car is double the price of the American counterpart. What seemed like a sure bet for Toyota in a boom market turned out not to work too well.

China’s largest cities are choking on pollution and the Chinese government is pushing up taxes on gas guzzlers, but the public is hungry for horsepower.

As night fell over the 24 Hours of LeMans this summer, spectators at France's prestigious endurance race detected a pattern. While competitors entered the pits to refuel, a sleek pair of Audi R10s kept stealing laps around the 13.7-kilometer track. Already the fastest cars on the course, and eerily quiet thanks to a unique emissions filter, the Audis were also proving the most fuel-efficient. When the checkered flag flew, the Audi had made history as the first diesel car to win a major internationa race.l race.http://money.cnn.com/magazines/fortune/fortune_archive/2006/10/16/8390259/index.htm

The Internal Revenue Service announced yesterday that Toyota has submitted quarterly reports indicating that its cumulative sales of qualified vehicles to retail dealers has reached the 60,000-vehicle limit during the calendar quarter ending June 30, 2006.

The Internal Revenue Service has acknowledged the certification of a few more vehicles for the Alternative Motor Vehicle Credit created by the Energy Policy Act of 2005.

Starting today, hybrid vehicles can travel the New Jersey Turnpike’s HOV lanes. This follows a trend by other states like Virginia and California to allow solitary drivers with hybrid vehicles in lanes traditionally reserved for carpools.