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Tax Credit Changes in new bill [LOCKED DUE TO POLITICS & ARGUING]

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jollyroger

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That was not my point, it was the other responder that specifically mentioned housing. I don't own a house right now but losing the 7500$ credit wouldn't affect my ability to purchase a Rivian. That was my point, if a 7500$ tax credit is the only thing keeping you from the "biggest purchase in your lifetime" then you should seriously reconsider that purchase.
I guess I'm curious at which point you think the cutoff for the tax credit should be to make a difference if someone would purchase or not. $7500 is a lot of money to take off a vehicle. I could see many situations where that could be the decision point, especially if someone is stretching their budget to be better for the planet, reduce maintenance, etc.
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That was not my point, it was the other responder that specifically mentioned housing. I don't own a house right now but losing the 7500$ credit wouldn't affect my ability to purchase a Rivian. That was my point, if a 7500$ tax credit is the only thing keeping you from the "biggest purchase in your lifetime" then you should seriously reconsider that purchase.
And thats your situation, not everyone else’s. While I get where you’re going, the OP that posted that this was the “biggest purchase of a lifetime” that you all are responding to never said anything about a house purchase, that was another poster as you mentioned. If the OP of that comment doesn’t intend to buy a home what else would be a larger purchase than an R1T that they should reconsider for? Honest question, not trying to be inflammatory
 

jjswan33

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I guess I'm curious at which point you think the cutoff for the tax credit should be to make a difference if someone would purchase or not. $7500 is a lot of money to take off a vehicle. I could see many situations where that could be the decision point, especially if someone is stretching their budget to be better for the planet, reduce maintenance, etc.
I think you avoid most of these debates by making it a soft cap and have a partial credit up to some higher threshold, not sure the number.

Honestly though the $150k cap is MAGI so if you deduct things like 401k contributions ($19500), SALT deductions ($10k), mortgage interest (for homeowners) etc someone in a high COL location would likely be making closer to $190k annual before they lose the credit.
 

Bullitt

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I guess I'm curious at which point you think the cutoff for the tax credit should be to make a difference if someone would purchase or not. $7500 is a lot of money to take off a vehicle. I could see many situations where that could be the decision point, especially if someone is stretching their budget to be better for the planet, reduce maintenance, etc.
This is closely aligned to my situation. This is a stretch purchase and I want to do it to complete my transition of of fossil fuels for daily driving while still allowing me to go off the beaten path (unlike our M3).. It’s slightly outside my comfort zone and will push my budget, but is doable
 

Acoustic71

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I am not a financial advisor but would question one's priorities if one were to spend more on a means of transportation than on a place of habitation.
But what if they intend to live in their Rivian?
 

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Bullitt

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TXR1S

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I think you avoid most of these debates by making it a soft cap and have a partial credit up to some higher threshold, not sure the number.

Honestly though the $150k cap is MAGI so if you deduct things like 401k contributions ($19500), SALT deductions ($10k), mortgage interest (for homeowners) etc someone in a high COL location would likely be making closer to $190k annual before they lose the credit.
edit: I was incorrect
 
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emoore

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I don’t believe any of the deductions you listed affect AGI or MAGI. MAGI can only be larger than AGI. The deductions that come out for AGI are:


  • Certain business expenses for performing artists, reservists, and fee-basis government officials
  • Educator expenses
  • Half of any self-employment taxes21
  • Health insurance premiums (if you’re self-employed)
  • Health Savings Account (HSA) contributions
  • Moving expenses for members of the armed forces moving due to active duty
  • Penalties on early withdrawal of savings
  • Retirement plan contributions (including IRAs and self-employed retirement plan contributions)
  • Student loan interest
401k contributions are absolutely not include in your AGI. That's the whole point of the 401k, defer taxes until retirement.
 

TXR1S

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401k contributions are absolutely not include in your AGI. That's the whole point of the 401k, defer taxes until retirement.
you are correct, I’ll edit my post.
 

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I think you are misunderstanding what the tax incentives actually are, which is a manufacturing subsidy. If they only benefitted consumers, as it appears at face value, OEM's would not be lobbying for them so ferociously. They are doing so because that is money that goes into their pockets to incentivize the investment required to shift capacity over to EV production from ICE production (at least from the legacy maker perspective). For the upstarts, it provides better margins that greatly help them on a path to sustainability, which in turn made/makes them more attractive for investment from the capital markets.

Without the incentives, Tesla would have had to forecast lower prices for their models and possibly might have decided it wasn't feasible. Rivian may not have attracted the capital necessary to get where they are today, if they had to charge $7,500 less on every vehicle sold which would have been a longer road to profitability and a riskier bet.

In a world with supply and demand equilibrium (admittedly not where we are today), prices for EVs would be lower without incentives, so it really makes no difference to the consumer whether they exist or not. The market sets the price (net of any applicable incentives) that a product can be sold for and the seller should be pushing the limits of what that is on a constant basis.
I think you might want to go back and take a look at macro economics. The whole concept of buyers incentives are to increase demand, not to subsidize the suppliers. While more sales will ultimately result in cashflow for the suppliers, there is a price elasticity and competition that does not allow suppliers to automatically increase the selling price by the incentive amount.

Thanks for you perspective. We have to agree to disagree on this point.
 

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I guess I'm curious at which point you think the cutoff for the tax credit should be to make a difference if someone would purchase or not. $7500 is a lot of money to take off a vehicle.
7500$ can be a lot of money to take off a vehicle. If you take 7500$ off a 35k vehicle, that is a significant savings. For a Rivian, the 7500$ would be, at most, 10% off for people pre price hike. If getting a 10%-off coupon on your luxury adventure vehicle is what's keeping you from buying it then, again, I would suggest you seriously reconsider your priorities.

Now if we were talking about a legitimate need, something like housing or just a commuter vehicle, then saving 10%, especially if it's a recurring or large purchase, could be quite meaningful. Even then, 9 times out of 10, if 10% of the cost is prohibiting you from making a large purchase you should still be seriously rethinking your options(in the case of the commuter car or housing example, that would mean considering cars/apartments/houses with a lower overall cost). This is just budgeting 101, it's really quite sad that I have to explain it in such detail.

especially if someone is stretching their budget to be better for the planet, reduce maintenance, etc
If someone is "stretching their budget to be better for the planet" by buying a Rivian then they aren't helping the planet, they're just boosting their own ego under the guise of "I'm doing my part".
 

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7500$ can be a lot of money to take off a vehicle. If you take 7500$ off a 35k vehicle, that is a significant savings. For a Rivian, the 7500$ would be, at most, 10% off for people pre price hike. If getting a 10%-off coupon on your luxury adventure vehicle is what's keeping you from buying it then, again, I would suggest you seriously reconsider your priorities.

Now if we were talking about a legitimate need, something like housing or just a commuter vehicle, then saving 10%, especially if it's a recurring or large purchase, could be quite meaningful. Even then, 9 times out of 10, if 10% of the cost is prohibiting you from making a large purchase you should still be seriously rethinking your options(in the case of the commuter car or housing example, that would mean considering cars/apartments/houses with a lower overall cost). This is just budgeting 101, it's really quite sad that I have to explain it in such detail.



If someone is "stretching their budget to be better for the planet" by buying a Rivian then they aren't helping the planet, they're just boosting their own ego under the guise of "I'm doing my part".
Budgeting 101… you realize you’re being a jerk in trying to make your point… Kinda like boosting your ego for the planet
 
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Olsonsolar

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Yikes, then people need to seriously reconsider their priorities.
You don't know anyone's financial situation. How long they may have had their house paid off or what they paid for it, what part of the country they live in, whether or not they had any kids to push thru college, or whether they felt the need to try and keep up with their neighbors, just because that truck may be their biggest purchase doesn't mean they will go in debt over it. I for one worked hard and knew how to save money and have never felt the need to try and keep up with a rich neighbor or friend.
 

rohobono

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Budgeting 101… you realize you’re being a jerk in trying to make your point… Kinda like boosting your ego for the planet
So expecting someone who is considering the purchase of an ~80k luxury vehicle to know the very basics of budgeting and then being disappointed when that isn't the case qualifies as being a jerk to boost my own ego?
 

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A salary of 150,000 is very different in San Diego vs Albuquerque, New Mexico. Or NYC vs Billings, Montana.

My house (over-inflated right now at 400k in Albuquerque) would be a 3-5 million dollar house on Coronado Island.

Most situations are like that...there is no one answer for finances. I make a fair salary for NM, and we are doing fine. But we would struggle in my birth town of Santa Monica if I tried to buy the home we lived in on 3rd Street.

Now I've never come close to having a 1000 dollar a month car payment, but a lot of people do. And I'm at a place I can afford that payment and I've decide to "spoil" myself. While yes helping the world with my electric truck, electric bicycle, and roof covered in solar panels. No oil for me for years now.
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