Potential EV Incentives

[thrill]

American made is decided by the amount of U.S. made content is inside the vehicle, not the location of the company or the factory. I believe 70% or more is required, last time I checked.,

For a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be "all or virtually all" made in the U.S.

Complying with the Made in USA Standard | Federal Trade Commission (ftc.gov)

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[DucRider]

American made is decided by the amount of U.S. made content is inside the vehicle, not the location of the company or the factory. I believe 70% or more is required, last time I checked.,

For a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be "all or virtually all" made in the U.S.

Complying with the Made in USA Standard | Federal Trade Commission (ftc.gov)

Whatever standard is used, putting those limits/qualifications on EV incentives makes little to no sense and adds complication, confusion, and way too much room for political posturing/games.

If some F150e pickups or VW id.4 are made with batteries from the upcoming Tennessee SKI plants and others are assembled from imported batteries, would you have to verify your specific vehicle before you buy? Does Ford/VW then have to price them differently in order to sell the ones that don't qualify?

If Rivian hired a subcontractor in the US to assemble the raw Samsung 21700s into modules that will later be incorporated into a pack by Rivian in Normal- are those modules then "American made"?

If SKI imports 100% of the raw materials needed to make the id.4 batteries in Tennessee, are they "American made"?

If "American Made" is important to the consumer (with whatever definition they prefer), let them vote with their wallet.

 

[Rhidan]

American made is decided by the amount of U.S. made content is inside the vehicle, not the location of the company or the factory. I believe 70% or more is required, last time I checked.,

For a product to be called Made in USA, or claimed to be of domestic origin without qualifications or limits on the claim, the product must be "all or virtually all" made in the U.S.

Complying with the Made in USA Standard | Federal Trade Commission (ftc.gov)

Whatever standard is used, putting those limits/qualifications on EV incentives makes little to no sense and adds complication, confusion, and way too much room for political posturing/games.

They don’t have to use some previous definition of “American Made” that is used in some other context that won’t work for for BEVs. The new law can define that term however they want, and in an effort to prevent any unintended consequences. There’s no real point in debating it until they release the draft text of a bill.

 

[Rise1Set]

What if you’re not wealthy and just want to buy a Rivian?

Putting a cap on the MSRP doesn’t incentivize ‘non-wealthy’ people to buy EV cars more it just means that more money will be available for ‘non-wealthy’ people to buy them.

It’s all relative - if a person makes $60,000 a year and buys a $40,000 they are spending “x%” of their salary a year on a car. If a person making $120,000 a year buys an $80,000 car they are spending the same “x%” of their salary a year on a car.

Also, if we look at the percentage of wealthy people versus non-wealthy buying cars, I’m sure in the end the non-wealthy will take the lion share of the incentive dollars.

Everyone is paying taxes, every EV car bought helps the environment the same, etc. etc. etc.

The idea of an arbitrary cap on the incentive is pretty upsetting.

 

[Rise1Set]

This is not true if you look at a percentage of dollars earned going to various taxes. Research over decades has shown that the poor pay a comparable percentage of their income to various taxes even with the lower rates due to sales taxes, payroll taxes (capped so the lower income pay this On all income compared to wealthy only paying up to that cap), and other taxes. Yes, the wealthy pay a higher absolute value, but are also benefitting greatly from their wealth. In short: Lower income folks will put any extra dollar back into the economy. Higher income folks put that into savings/stocks that serve no legitimate economic purpose if we care about keeping the economy going.

Evidence? My wife and I finally saved enough after 20 years to get a nice car and solar panels. We will not benefit from the full incentives because despite being middle class, we will not have enough federal tax debt to get the full value of both incentives. So if we were making more, we would get more out of these exact same incentives and we are by no means poor.

So wealthy folks should get some incentives, but lower income folks are much more likely to be pushed into a different decision because things go from out of reach to actual possibility.

The easiest fix was already mentioned: make the incentives either refundable, or more likely, roll over to succeeding years (this would take care of the problem of the government having to put money out and just reduce income in succeeding years).

I believe most people can modify contributions to taxes through HR - so essentially you could tell your HR department to not withhold any tax dollars. You would of course have to save a percentage of your earnings and pay all taxes at the end of the year, but this would ensure you owe at least $7,500 or whatever the credit is. Most financial planners can help with the calculations.

 

[Gshenderson]

It’s not about what you owe at the end of the year. It’s about whether your income resulted in a tax liability. It’s the number that you’d subtract what was withheld from in order to determine what you owe or get refunded.

 

[DucRider]

I believe most people can modify contributions to taxes through HR - so essentially you could tell your HR department to not withhold any tax dollars. You would of course have to save a percentage of your earnings and pay all taxes at the end of the year, but this would ensure you owe at least $7,500 or whatever the credit is. Most financial planners can help with the calculations.

"Owing" is not the issue - tax liability is (line 18 on the 2202 form 1040).
If your potential tax credits from Schedule 3 exceed this amount, you lose the excess (it doesn't roll over).
The calculation for payment owed or refund due comes later and that is where your withholdings and/or estimated tax payments are entered.

 

[CommodoreAmiga]

I believe most people can modify contributions to taxes through HR - so essentially you could tell your HR department to not withhold any tax dollars. You would of course have to save a percentage of your earnings and pay all taxes at the end of the year, but this would ensure you owe at least $7,500 or whatever the credit is. Most financial planners can help with the calculations.

If you reduce your withholdings too much then the department of revenue may step in and tell your employer to re-adjust your withholdings and not let you change it.

I worked for a company where a lot of the sales people would change their exemptions to 99 or even claim fully exempt before a big commission check. A lot of them ended up getting letters from the DOR and limited to 1 or 2 for exemptions.

 

[RobBot]

I believe most people can modify contributions to taxes through HR - so essentially you could tell your HR department to not withhold any tax dollars. You would of course have to save a percentage of your earnings and pay all taxes at the end of the year, but this would ensure you owe at least $7,500 or whatever the credit is. Most financial planners can help with the calculations.

Hi, financial planner (in training) here, that's not how that works.

Think of withholding as pre-payments. It doesn't affect how much you actually owe in taxes.

 

[trez63]

Re-igniting this old thread. Giving the recent drastic increase in all car prices, I think the cap should be either removed, or increased to $100k. If anything it should be tiered in reverse or something to the effect.

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