Hacker News Reader

Comment by stusmall | Hacker News Reader

I mean it's kind of the point of tax reform. You eliminate deductions that only wealthier people benefit from and lower the rate over all. You'll see a lot of deductions go away that are good on their own but in aggregate with all the other deductions give us such a massively complex system.

View on HN

> You eliminate deductions that only wealthier people benefit

The Nissan Leaf and Chevy Volt aren't particularly upper class cars. Neither is the Model 3.

Nor are people spending $30,000 on a vehicle showing particularly price sensitive behavior.

Lots of fine vehicles available for $15,000, $15,000 is an awful lot of gas (and you save on insurance and financing with a cheaper vehicle, so the lower maintenance on the electric isn't the only consideration).

Maybe it's not just about cost, but about driving a vehicle that doesn't directly contribute to diffused emissions? And use motor oil, hydraulic fluid, coolant, belts, etc?

If you're going to compare long term maintenance costs, you absolutely have to include the battery pack replacement cost. Otherwise you're being disingenuous or even deceptive.

Many '11-'12 Leaf owners are already complaining about significantly reduced ranges on their vehicles. What happens after 60,000 miles if your battery starts rapidly going under 9 bars?

Keep driving with terrible range anxiety? Plan your routes with chargers in mind? Have a stopless commute now require you to stop and charge, making trips even longer?

Replace the battery pack?

http://www.greencarreports.com/news/1111264_new-life-for-old...

Whoops, that's going to be $6,200.

> If you're going to compare long term maintenance costs, you absolutely have to include the battery pack replacement cost.

> Keep driving with terrible range anxiety?

If we're bringing all of this up; we must consider the reliability increase as well.

They aren’t an option for the majority of Americans.

Yes, those are cars for the wealthy. Most people cannot even afford a car. If they can, they’re probably not buying a new car. And, if they do buy a new car, they’re probably looking to spend close to $20,000.

My parents just spent a little over $20k on a Leaf. Not exactly a Bentley.

Congratulations, your parents are relatively wealthy.

And, did they buy a new one? MSRP is $30,680: https://www.nissanusa.com/electric-cars/leaf/versions-specs/...

New, yes, $30k no. electric utility provided a significant deal. In some states you can apparently get the 2016 model for $15k out the door now.

A 2016 model year car, at the end of 2017, is not “new”. Also, I don’t know what specific electric utility subsidy you’re referring to, but that doesn’t help your argument, in this thread about subsidies, IMO.

What was the out-the-door price for your parent’s 2017 Leaf?

> If they can, they’re probably not buying a new car.

While it's a subsidy; the benefits don't stop at the first purchase. As long as the subsidy continues, prices for used EVs will stay below prices of new EVs.

You make a great point.

I'd like to learn more about that dynamic of used car pricing. Do you have any pointers?

Here are some thoughts I have which might introduce subtleties:

* At some price level, there is a floor on "good condition used car that will safely take you from A to B",

* A used EV also price-competes with all used cars, and perhaps even with new non-EVs.

They are more like the 2nd/3rd car for the upper middle class. So many in the Bay Area are used just for commuting in EV lanes and charging at work by people who don't need the tax credit.

Are you sure about that?

Just because something is priced in a range that would be affordable to most professionals, liberals or conservatives, does not mean it isn't associated with the elite.

This toilet paper is made of gold... but do you think its the "elites" that are buying it?

http://wsimain.wallstreetinsani.netdna-cdn.com/wp-content/up...

I know 4 people who purchased used Nissan Leaf's for under 10,000 with the tax credit in California. They all make over 6 figures. My conservative neighbor makes less than $60,000 per year, and has a truck that costs that much.

It's not so much the value of the car that determines whether the credit benefits the wealthy or not. This is a tax credit, not just a check from the government. You have to have a fairly high income in order to have a federal tax liability of $7500. A single person would need to make almost $50k a year in order to benefit from the full credit.

That's not a big number by developer standards but it's more than the median household income in the US.

(Having said that I'm for the credit and have already benefited from it twice.)

Buying specialized vehicles is a very upper class thing to do. The middle and lower classes aren't willing to pay new car prices for something unless it can do everything, not just commute or tow their camper or boat.

That's why crossovers, SUVs and half-ton pickups with multiple rows of seating are so popular among less wealthy new car buyers.

Buying a commuter vehicle that can do little else well is definitely an upper class(es) thing.

That's why I said wealthier. As a lot of people pointed out new cars, especially electric, are still something bought by people earning more than average. These aren't yachts but they are still target higher end come breaks.

Even with the tax breaks that include middle class earners benefit the rich more just by the nature of how deductions work. The rich tax payer would have had this deducted income taxed at a higher bracket than the middle tax payer would thus a bigger absolute savings on their tax bill.

http://www.businessinsider.com/us-census-median-income-2017-...

Between 2015 and 2016, US median household income rose 3.2% from $57,230 to $59,039, according to a new report released by the U.S. Census Bureau on Tuesday.

So, yes, the median household income is right in line with being able to purchase a 20k vehicle.

This is not some exploitable loophole abused by the ultra wealthy.

Those will remain

The states and cities that are coming forward with ridiculous EV mandates should be the ones covering the subsidies, not the entire nation.

I disagree. Phasing out new production of C02 producing vehicles benefits everyone and by extension, failing to encourage it hurts everyone. This isn't a localized issue. It isn't like Texas (for instance) can produce as much carbon dioxide as they want, and it will only affect Texas.

Yet the state you criticize (Texas) is leading the country in green, renewable energy [1]

1. https://www.wsj.com/articles/which-state-is-a-big-renewable-...

I didn't research, I just picked one at random. Please replace Texas with whatever state you like. That isn't really the point.

Edit: And also, I just checked and Texas does NOT do very well on CO2 emissions per capita.

Edit: Also I did some more checking and Texas is not leading the country in renewable energy, it is 22nd

Yeah! Pollution is a local problem! Definitely address it at the city level. Can we go further? Why not just have specific individuals who care about this funding the subsidies?

Have you visited LA recently? Pollution is very much a local problem. Why do you think it's cities leading the way on gasoline engine bans? I have no problem with these bans, but cities that take them up should be providing the incentive for switching, not offloading their problems on the rest of the country.

Yes, some pollution is to a degree localized, but not all of it. Don't forget that LA residents aren't somehow polluting more than their counterparts. In fact I suspect they are polluting less. It's just that they are concentrated in one place. And once again reducing C02 emissions (probably the most pressing pollution issue of our time) is not localized.

Yeah, thats just the point guys, the middle & middle upper classes lose their deductions and the rich lose the estate tax, it all comes out for the little guy right?

Wake up.

Sadly, most of the deductions that disproportionately benefit wealthy people aren't going anywhere (mortgage interest, IRA/401k/tax-free savings, FSA/HSA, etc.) since they appear to benefit everyone and foster the american dream of home ownership.

* Mortgage Interest is dropping from 1-million to 500k.

* State / Local tax disproportionately benefits richer states (which tend to have higher income taxes). That's also going away.

The real issue IMO is that the standard deduction is going up, and the top tax rate is going down. The overall effect seems to be a tax-increase for me and a tax-decrease to those who are richer than me.

They probably should close the backdoor Roth loophole, and a few other corporate loopholes (Irish Double Sandwich or whatever its called).

https://en.wikipedia.org/wiki/Double_Irish_arrangement

The top tax rate is NOT going down. It remains at 39% under the proposal released by the House today.

The top marginal rate is the same, but because they're moving the brackets you can make twice as much money before you pay 39%(for a married couple)

And because taxes are marginal, that effectively becomes straight CA$H MONEY to everyone in the 39% bracket.

How does the standard deduction going up benefit the rich or harm the non-rich? Aren't lower- and middle-class people most likely to take the standard deduction, and thus be able to deduct more?

They're cutting a lot of deductions.

EDIT: Seems like my information is out of date. I'll just edit my misinformation out (ie: most of the previous post)

401k deductions and plans aren't being touched.

Yeah, my info was out of date. I edited my post to something way more conservative.

Probably not the time yet to write about the proposal as if it is sure to happen/stay the same.

Fair point. These things change dramatically with debate.

Reply on news.ycombinator.com