You’ve probably heard about the new “Cash for Clunkers” bill that is offering up to $4,500 towards the purchase of a new car. The idea is to stimulate demand for new cars as well as raise overall fuel efficiency by promoting the trade-in of “clunkers” for new and more efficient vehicles. It is officially part of the Consumer Assistance to Recycle and Save (CARS) Act, which recently passed the House and is currently in the Senate.
It’s not finalized or sent to the President yet (don’t buy anything yet!), so there is still room for changes. However, here are the requirements in the House Bill:
Old Trade-In Vehicle Requirements
- Must be in drivable condition.
- Have been continuously insured to the same owner for at least one year immediately prior to trade-in. (You can’t just buy a $500 beater for the $4,500 voucher)
- Manufactured in model year 1984 or later. (mostly due to EPA mpg data not going back that far), and
- Have a combined fuel economy of 18 mpg or less. You can find your car’s combined EPA fuel economy at FuelEconomy.gov.
If you are trading in a “Work Truck”, defined as having a 8,500-10,000 pounds GVWR (gross vehicle weight rating), then your vehicle must be from model year 2001 or older.
Obviously, another common sense requirement would be that your car should be worth less than the $3,500 or $4,500 you qualify for, or else you could simply sell it yourself instead of going for the voucher.
Let’s check out our cars:
1995 Nissan Maxima
The first car I ever owned, which came to me in excellent condition in 2000. Besides the usual oil changes and stuff, I’ve replaced the starter and 3 out of the 4 power windows motors (annoying common flaw in this model). It is nearly 15 years old now and runs great. Edmunds says my car is worth about $2,500 (sold to a private party). $4,500 for it might tempt me.
My combined fuel economy is 21 mpg. Not quite gas-guzzly enough.
2002 Pontiac Grand Prix
Yes, I have a sad little orphan Pontiac. But I took advantage of its horrendous resale value and picked it up when it came off-lease at 3 years old at my workplace for cheap. The interior is really cheap-feeling, but you know what, it hasn’t run into any mechanical problems at all. The only thing that broke so far was a plastic air conditioner knob.
Edmunds says it is now worth about $5,000 Private Party, which means has depreciated less than $1,000 per year since purchase. My combined fuel economy is 21 mpg.
So I guess neither of our cars qualify, which makes me think that most “beater” cars won’t either. Think of the VWs, Hondas, and Toyotas out there. A 1985 Honda Civic gets over 30 miles per gallon! This law is mostly for SUV and truck owners, and you can qualify for a voucher with as little as 1 mpg improvement (for large trucks) to 4 mpg (for passenger cars). I don’t quite get it.
Indeed, just because you qualify, doesn’t mean you should necessarily go for it. You’ll get some fuel cost savings, but unless you pay cash you’ll also have a monthly auto loan payment. A new car also has higher insurance rates, and you’ll have to carry collision/comprehensive coverage.
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Awesome isn’t it? We get to subsidize everyone else buying a car. Maybe we can create a transportation bubble like the housing market. Give cars loans to those that can’t afford to pay them back. Artificially inflate the demand for cars… and boom.
“It’s not finalized or sent to the President yet (don’t buy anything yet!), so there is still room for changes. However, here are the requirements in the House Bill:”
Like… maybe they should require that you buy a 35mpg or better car. Don’t put it past them.
Just more government waste, control, power, and intrusion into our lives.
Wow, this seems like a horrible idea! Pile on that debt, Gov’t! I’d trade my cars in in a hear-beat if they qualified. They are worth much less than $4500.
Mine didn’t qualify by a few MPG. Crap.
60% the cars that are currently donated to charity will now be eligible for a $3500 or $4500 voucher under the cash for clunkers program. Since the tax deduction for donating a car is only $500 or what the car sells charities won’t be able to compete with the program and charitable car donation will end. A better idea is to just change the amount a person can deduct for donating their car back to the book value. That way every car is eligible, the government doesn’t have to spend $4 million of our dollars giving away vouchers and trying to administer a program that is way too convoluted!
I thought you commuted quite a way in a car? I figured you would have (slightly) nicer cars.
This country will go broke soon. This is yet another waste of tax-payer money that we don’t even have.
If the government’s primary goal was to improve the overall efficiency of cars in the US, the most obvious way to go about this would be to tax the hell out of gasoline like most of the world does. Thereby you would be encouraging greener vehicles while still keeping a free market model in effect. This would of course be very unpopular with voters and big oil companies alike. Would I myself like this solution, no. Do I think it would be the right thing to do in the long run….. probably.
My 93′ caddy would fall into place here perfectly 😉 Although, i’d much rather drive that around than a new car right now anyways. no car payments = heaven.
Hmmmm… 1994 Land Rover Discovery in crappy condition… looks like it might qualify! But, don’t need a new car…
As far as I can tell, the idea is to stimulate sales by domestic car companies. So, how to do that without being obviously protectionist? Stimulate mainly sales of those cars that GM/Ford make money on, and not Honda, Hyundai etc -ie SUV’s. Owners of old SUV’s will likely buy another SUV, not a small car. They bought the original SUV for a reason. Therefore, only SUV/truck owners will be eligible for the credit, and the idea is to get them to buy another SUV. The ‘eco friendly’ aspect is a smokescreen to sell this to voters- apparently even a Hummer H3 qualifies as ‘green’ under this plan.
I vote for the gas tax. It’s a very straightforward (political suicide) way to efficiently entice conservation.
What I don’t like about this bill is that it rewards people who may have made anti-efficiency decisions in the past. How ’bout rewarding people with short commutes by taxing fuel (that they don’t have to buy).
I think of all these new cars sitting in lots around the country and I think why did they build them all in the 1st place? Overproduction just to keep plants moving? Most of us know that you can keep your car a really long time, saving money and even without a hybrid (who’s batteries are of questionable environmental value), you may be saving the planet a lot more by keeping your old car then causing the construction of a new one.
Foreign/Domestic, whichever, we don’t need so many new cars. Incentives to buy up the inventory will probably cause automakers to turn on the spigot again and create more unnecessary replacements. I think the true demand should be the guide for all automakers to stop overproducing.
I don’t think this is an awful idea. From an environmental perspective, gas guzzlers should be encouraged to be off the road, even at a minor subsidy (though 4500 seems like a lot).
But — if you have an 18 mpg car and replace it with one that gets 22 mpg (a 4 mpg improvement) you still get $3500? To me, that just isn’t doing enough and is a complete waste.
The improvement should be AT LEAST 10 mpg, and even older cars that get 22 mpg should be eligible — if someone wants to shell out for a car that can get 32.
But maybe that is just selfishness talking because I have a 10 year old car that gets 22 combined. 🙂 That would likely get me car shopping, even though mine probably could hold out.
Or… they could just tax the heck out of gasoline, making SUVs and clunkers expensive to drive, encouraging people to make better car choices for themselves.
@SP
This IS an awful idea. It’s another attempt for the gov’t to meddle with our lives and increase taxes. The $4500 would be coming from your and my back pockets. Thanks to our progressive tax system, it’s heavily biased towards the rich mans pocket.
If global warming is such a big deal, the gov’t should do one thing: Impose a high gas tax.
Remember back when gas prices were $5/gallon last year? I do. People suddenly found themselves carpooling, taking public transit, and taking less discretionary trips.
People are incentivized by money. Period. People claim to be incentivized by altruism, but that’s a load of crap. Penguin lovers still drive SUVs and but their $2 bottles of water.
If there is a high gas tax, there will be an incentive for people to buy more efficient cars. Mr Obama wouldn’t have to mandate a MPG requirement b/c automakers unable to provide a product able to meet consumer demands will go bankrupt anyway. Look at GM.
I’m pissed off at the gov’t meddling with my life. Given the future of this country, I’m perfectly content to minimize my expenses and keep a low income (i.e. work fewer hours) to keep my marginal tax rate low. The progressive tax system is disinsentivising me to work more. Given a flat tax or a consumption tax, this wouldn’t be the case. Frankly, the tax regime disincentivizes me to go back to school for a masters or PhD and to try get a better job.
Baughman – I was pretty much with you until your last paragraph. I’ve never quite understood the notion of the progressive nature of the tax system (at least our current system that maxes out at 35%) being a great disincentive to earning more. I suspect that many don’t work through the actual numbers. So I did.
Let’s say you work 4 days a week instead of 5 (a 20% reduction in hours), which puts you right at the top of whatever tax bracket you are in, so that every additional dollar you make is taxed at a higher rate. Using a single person with the standard deduction as an example, here is the effects of working the full-time 5 days a week, compared to the reduced 4 days a week (“Extra Taxes” being the additional bracket amount, ie 5% because you go from the 10% bracket to the 15%):
Tax Bracket Extra Income Extra Taxes
——————————————-
10% $4,426.24 $221.31
15% $10,816.00 $1,081.60
25% $22,900.80 $687.02
28% $45,223.36 $2,261.17
Now, while I’ll admit that there exists some disincentive here, it also strikes me as slight.
You should also be aware that any “flat tax” (I put it in quotes because none of the proposals that call themselves that are truly flat, because they have an exemption amount – they are progressive taxes with only two brackets) or a consumption tax that is revenue neutral is likely to cost you more in overall taxes. Unless you don’t fall anywhere under my table above because you are above the 28% bracket. 😉
Dear Sir/Madam,
I wanted to find out more about how the MPG calculations are made for prior year models and how can they change overnight. My question is more specific to a couple of models and how the MPG has changed with respect to the “cash for clunkers” bill. I was following the MPG numbers for 3 cars 1996 Audi A6 Quattro, 1997 Audi A6 Quattro and a 1998 Ford Mustang GT. The source that I have been using to follow this is FuelEconomy.gov. On thursday the 11th of June of 2009, when I checked this website, all these cars had a mpg rating of 18 (combined city and highway). This was immediately after the house has passed the bill “cash for clunkers”. On sunday the 14th of June when the checked the same website, I see compelety different MPG numbers. For 1996 and 1997 Audi A6, the mileage has gone up from 18 to 19MPG (5.55% increase). For 1998 Mustang GT the mileage has gone up to 21MPG from 18MPG (16.67% increase).
I want to know what has changed overnight that the mileage numbers for these models have to be revised. There might be other cars, but these are the cars that I followed. Have these mileage numbers changed because of the passage of the bill H.R. 2751? What is the new evidence that has been provided to this organization that the MPG has been raised. Have these mileage numbers raised so that only people who have big SUV’s will be eligible to recieve the money under this bill? I would really appreciate if someone can answer my questions.
I did send this question to the energy commission. Lets see what they comment. But I think this is ridiculous that they changes these MPG numbers the bill gets passed. I smell something fishy here. Is there any other organization that can resolve this? If there is any I would like to report to them also. Any suggestions are welcome.
Not sure this is a good idea. Seems like it has a high potential for abuse.
Have people ever asked you how many miles you have on your car before? they sure have asked me that,lol,I always tell them,don’t worry about it,it’s all paid for. 1995 Chevy G-20 Van,206,000 miles and still going strong.
I don’t suffer from “new car fever” like some people do.
None of you who are surprised and annoyed at (as some of you say) “government meddling” voted for Obama, did you?
I agree with everyone here. This is a terrible waste of taxpayer money and it’s not even good for those who benefit. Getting a voucher for more than your car’s worth is good but getting into debt for a new car is not. If the voucher can be used toward a more fuel efficient used car, then I can see it’s at least somewhat useful.
@Baughman – Yeah, I mentioned the gas tax idea in my comment as well… Not an new idea, perhaps you should write your congressperson and support it if you feel so passionately.
I’m surprised that anyone would avoid getting a better job just to avoid paying a higher percentage in taxes…
wow. I hope this ridiculous bill does not pass. This is socialism at its worst. I bet they will also require that the new vehicle purchase be a GM vehicle.. LOL…
kuzbad, unfortunately, Bush did a lot of the heavy lifting for Obama. Remember when Bush gave out those “rebates”? (yeah, they just printed that money.) remember when Bush gave away the US economy at the G20 summit? (http://www.newsmax.com/morris/g_20_economic_summit/2008/11/19/153044.html) Don’t kid yourself, McCain would have done the same thing as Obama is doing, just in the Republican way (republicans like to keep taxes low as they monetize debt with printed money behind the scenes and democrats just come right out and raise taxes). The only REAL solution would have been to vote for Ron Paul.
Vote for a Ron Paul republican or an independent in 2012 to reverse the huge mistake you made by voting for Obama or McCain. (and no Huckabee wasn’t any better.. he spent more as governor of arkansas than Bill Clinton.. and his nickname was tax hike mike)
Jesus, wingnuts have invaded the comments section. You lost. Suck it.
Hear, hear for Ron Paul. Too bad…
You won’t ever see me defending Bush, and rarely the Republican party (the last 2 years being especially bad). What never ceased to amaze me during the election cycle was the government minimalists, the economically conservative, and the libertarians who actually thought Obama and an all Democratic congress would be better. Half a year in, I think the comparison is pretty stark.
Apparently saying that makes one a wingnut and deserving of personal insults however…can’t say I understand the lingering anger out there 🙁
Calling someone a “wingnut” or other insult is pretty obnoxious. Whats next, are you going to insult their mother just because they don’t agree with you. Lets try to pretend we are adults and have a discusion/debate rather than start with the name-calling.
Jonathan – I submitted a comment yesterday that I’m sure didn’t break any of the rules (particularly given the “wingnut” comment that was allowed), but it doesn’t appear. Is there a problem, or did I mess up somehow?
I second (or tenth) the Ron Paul vote. From what I’ve read about his policies, they appear to be spot-on and in line with what the founders of this country intended.
I’m not particularly fond of the republican or the democratic party. Despite claims to the contrary, they are essentially the same, big-gov’t machine with slightly different social regimes.
I just don’t know how to remedy the political mess that we’ve found ourselves in. I like the idea of Obama’s PAYGO proposal, which mandates that expenditures = income, but it has some loopholes and does little to remedy the 11.5 trillion dollar pile of debt that we’re in.
ttfitz – Sorry, it got caught in Akismet spam filter for some reason. It should be up now.
Thanks, Jonathan, I would have hated to try and recreate those figures again.
***Cash 4 Clunkers***
C4C is a great program but it rewards only a small segment people. Also, the program fails to realize that most older cars do not get the MPG quoted on the government website. Most older cars have a really bad carbon footprint and should be replaced. I have 2 clunkers that get bad gas mileage and emit harmful emissions – but according to the Govt website – the cars do not qualify. My 1993 truck gets 13 MPG (combined) ; the Govt website shows 21 MPG (combined). My 1992 Oldsmobile gets 17 MPG but the Govt website shows 19 MPG. I hope they change this program to allow more older cars to qualify for a new one.
All of you people freaking out about this program and saying it’s another wasteful government spending program and that we are all subsidizing peoples car purchases and the country is going to go broke blah, blah, etc. blah. just chill out for a moment. Look at these points:
1. Most cars, trucks, etc. are not going to qualify. You have to be at 18mpg or less. It’s hard to find a vehicle like that. Try it. Your list will be short. For example I thought my crappy 97 ford ranger which I know gets bad Gas mileage might qualify. Nope. IT is what the government has on record as the gas mileage for the vehicle when it was sold new. go to fueleconomy.gov to check a vehicle. It doesn’t matter if your vehicle now gets 15 mpg.(kind of like my ranger does) The gov says it gets 22mpg. End of that story.
2. The gov has made sure that crafty people dont take advantage of the plan. The clunker car had to be in the customers title for at least a year prior to the deal going down. So no go on buying a crap car from the scrap yard for 50 cents and limping it into the dealer for $4500. SO AGAIN RELAX. NOT MANY WILL GET TO USE THIS PROGRAM
3. I know alot of you don’t have the foresight to see past your own noses but this program will actually pay off in the long run for the US. That’s the point. When you get guzzlers off the road. Less gas gets consumed. Ahh, less we have to buy from ahole foreign countries. Yeah!!! By measure, one vehicle wouldn’t seem to be much dif. But you add em all up and suddenly it’s a big dif. Pollution gets cut. Yeah more healthy fish for me to catch at opener. Less crap in the air I breath. Some guy in Arizona lives 1 year longer and doesn’t go to the hospital for some health complication. I don’t know, point is there are alot of intangible(on the surface) benefits that the average joe doesn’t know about that the people who make it their business to study these things do. Boohoo bad government.
You know “THE GOVERNMENT” is actually a bunch of people from your community and communities like yours across the US who go work at government buildings and at least try to have a positive influence.
My “official” MPG is 21 on my car, but….I can tell you that it DOES NOT get 21 MPG. Shouldn’t there be an option to prove that your car does not get the official EPA estimate, so your car could potentially qualify for the 18 MPG requirement?
If y car is a 2005 Buick Terraza a Van, horrible in gas…does it qualify for the Clunker incentive…..I want a smaller car….less gas..usage..please advice
Thank you
MG
MG: re: the 2005 Buick Terraza.
Yes your van probably qualifies, but it’s worth more than $4,500. So why would you only accept $4,500 for it ?
Ironic .. I was planning on purchasing a new car this year to replace my old clunker (my clunker has 200K miles and runs fine). But I held off because of this program. Unforunately, my clunker has 19 MPG combined and does not qualify. But I’m relunctant to now trade in my old clunker because if they change the requirements of the program, I want to take advantage of the program. I wonder how many clunkers are in this same predicament ?
Something is stinky in DC. — When it was first announced I ran my car through the gov calculator and it told me that it qualified….but now (shock and awe – a few weeks later) it is now telling me that I am 2points too high to qualify. Somethings is goofy. I heard someone say that this program is custom made to take SUVs and Pickup Trucks off the road (other vehicles will thus be ‘close but no sale’)….and I am beginning to think that there is truth to that rumor.
Good old NC in DC again. 😉
**** The EPA has Doctored the results for Older 4dr Sedans*** They know that people with 1994 -1993-1992-1991-1990 Sedans want to get rid of them but they have artificially changed the results so we don’t qualify for less than 18 MPG.
Case in point My 1992 & 1993 Ford Crown Victoria Non Police Engine gets 18 MPG yet the EPA wants to say it gets 21 MPG only 1 engine offered in that car for the past 20 years a 4.6 L engine. I have never gotten 20 or even 19 MPG ouy of the car and with ETHANOL my mileage is down to 14-15 MPG. None of these cars mileage reflect the use of Ethanol yet Ethanol now is Everywhere lowering the MPG of everyone.
i wonder if my 1996 Ford Mustang would qualify? Does anyone know?
They changed the wording (since I was on the cars.gov website last week). I guess people were getting confused (cough cough-like me – lol)
NOW…when you look at the details it looks a little bit better (noted below):
Cars = 22, LightTrucks = 18, and HeavyTrucks = 15. So it you have a car that falls under the majic 22…you might still qualify. 🙂
Copy & Paste (below) from the Cars.com website…
The new vehicle must have a manufacturer’s suggested retail price of not more than $45,000. That price appears on the window sticker on new vehicles. The new vehicle must also achieve minimum combined fuel economy levels.
For passenger automobiles, the new vehicle must have a combined fuel economy value of at least 22 miles per gallon.
For category 1 trucks, the new vehicle must have a combined fuel economy value of at least 18 miles per gallon.
For category 2 trucks, the new vehicle must have a combined fuel economy value of at least 15 miles per gallon. Category 3 trucks have no minimum fuel economy requirement; however, there are special requirements that apply to the purchase of category 3 vehicles.
What’s not to love? Reward those that have wasted the most fuel with my money! B. Insane Obama to the rescue!
wow the dingbats in dc did not kn ow what they were getting into.
Much to amazment of many peope the epa on fuel maileage was based on today’s standards for cars not when they were produced.
I have a 1993 pontiac grand prix 3.1 egine that does not qualify only the 3.3 does.
Mean while I need to get a new car because its getting to expensive to repair and because it does qualfy for the clunker program, my trade-in is going to be very little.
Something very fishy going on here.
Hope the program is modfied otherwise many people like me are going to be left out
My can ( a clunky old wagon that gets abut 15MPG is deemeda 20-22 miles per galloncare by our beloved government. If you are as outrages as I am at the sloppy and unfair rules for the clunkers program WRITE OR CALL YOUR US REPRESENTATIVE AND RAISE HELL. That is the only way these dumb rules will be changed
I take back me previous comment… as I misread it. I guess #18 is still the majic number (ugh).
I dont know why people are saying to tax the shit out of the gas…. besides does anyone even remember just a year ago when gas was almost 5 dollars a gallon? i think that the high gas prices had ALOT to do with the current ecinomic condition, Higher gas prices= less travel=less business, im not saying that it is the main reason but it is a major reason. DONT TAX GAS MORE….. i do support alternative fuels but until we get something that will eventually replace the oil dependacy, i think this is a good way to start.
economic* lol sorry
We have a ’92 Oldsmobile Cutlass Cruiser. We are excluded from the Cash for Clunkers program because the combined gas mileage is said to be 19 mpg. I seriously doubt that the mpg stated is correct. The car is seventeen years old for goodness sake. Certainly, it doesn’t get what the government is saying it gets. You know what I think I’ll do? I’m going to drive the damn car until it falls into the ground. If it pollutes so be it. The government doesn’t care, nor do I!
I’m at a loss as to how this relates to Socialism, but apparently that (and ACORN) are the key words the aginners are suppose to apply to each and every program currently coming out of the new administration.
And I agree with ttfitz concerning Baughman’s “I’m going to earn less money so I don’t move up into a higher tax bracket” tactic. Apparently people don’t understand that there is no way you can earn more more gross and end up with less net because of taxes! I have never understood when people bring up that concept when talking about the tax system. Personally, I’m happy when my tax bill goes up because that means I made more money.
Too bad this program isn’t promoting dramatic gas mileage increases. I think that the 10MPG difference makes a lot more sense than just a couple of MPG improvement. I guess the idea is that it’s really going to help car sales more than the environment.
This program was CREATED to get pickup trucks, mini vans, and SUV’s off the road. This is COMMON knowledge. Don’t whine if your 20 mpg car doesn’t qualify, this AINT all about YOU!!!!
LISTEN UP. These gas guzzling dinosaurs are the MAIN MAIN MAIN reason why we are addicted to foreign oil. If we can get a majority of these relics off the road, we can cut our consumption DRASTICALLY.
After the C.A.R.S. program runs it course, then we will need to tax the living HELL out of people who refuse to upgrade to a better mpg vehicle. Hit ’em where it hurts. Assess a $1000 per year gas guzzling tax for ANYONE who drives a vehicle that gets under 26 mpg. That’ll make Billy-Bob think twice about keeping that Dodge Ram V-8.
Finally, this is BASIC economics, people: in order to prevent a recession and prevent this country from going bankrupt, you need to SPEND SPEND SPEND.
I find it absolutely amazing that both the UK and Germany have come up with a much better, much more straighforward program to stimulate car sales than we have in the US. The UK is giving 2000 pounds to new car buyers who scrap their 10 year or older vehicle. Germany is handing out 2500 euros to those who are willing to scrap their 9 year or older vehicle for one that is more fuel efficient. Car sales are up substantially in both countries. What is it about US programs? This program is so muddled with rules and regulations that few can understand it, and even fewer can qualify for the program Didn’t Congress ever hear the old adage, less is sometimes more?
Ahhh yes. I saw this coming. Go ahead and curve up the cars MPG ratings so more people don’t benefit from this program. My vehicle is “said” to get a combined 25 mpg. I can tell you that is NOT what my vehicle gets. I love how they don’t bring into play engine wear and tear over the years. If I am utilizing this program, I apparently, don’t have the money to get the engine rebuilt and completely cleaned. I knew this was a bunch of BS. How can any car get a combined mpg under 18? Unless you are driving a one ton truck? Whata scam.
You will never take my Buick Roadmaster from me! It doesn’t qualify anyway, MPG is great for the baddest boat ever made…
What will the government do next to “encourage” our submission?
I might be kind of late to this party, but Gail’s comment is a really good one. The US government has come up with a program that is super confusing and then put struggling car salesmen in charge of explaining it to consumers. I feel bad for those Americans trying to figure this out. My ’96 Sentra is waaaaay too efficient. Maybe they were mistaken, a clunker is something worth less than $4500, not something you give $4500 for.
Also there is at least somewhat of a conflict of interest here with the government, who owns a car company, distributing money to people to buy cars based on mpg stats the government comes up with. I wonder how many 13 year old Chevy’s don’t qualify?
Ok… So i have a 1989 Ford Taurus. It runs like a dream, but surely looks like a clunker. So the site says it gives a mpg of 21, but I don;t think so. it’s more like 16 or 17, at best.
Do you think mine could qualify?
Why are the mpg fields pre-filling themselves?
Any way to by-pass that?
I’m worried for this country in more ways than one. We need to pray hard because President Obama is making some hasty bad bad bad decisions for this country.
Those qualified cars are all BIG SUV, BIG luxury sedans.. all RICH men’s toy. Why congress want to give those RICH cats $4500 tax dollar to buy new cars? A lot of poor people own very old SMALL car -REAL CLUNKERS, why don’t they qet $%*& 4500? Why Congress always take “wonderful” care of RICH cats?
To ttfitz: I wish more people would do a little math before they say something stupid about the progressive tax brackets. So tired of hearing someone say that because of it, they just want to be a lazy bum now–that guy probably was a lazy bum regardless. So, thanks for doing a little math to help people use their minds a bit more.
And I have more news about the Progressive tax rate: It’s not really progressive at all. See, I’ve been in the lower tax bracket and in the highest during different times of my life. I always love it when I get into that “high tax bracket”…BECAUSE IT’S NOT 35%. I wish you people-not you ttfitz-would think a bit more. With all the tax exemptions, the people in the “high” tax bracket…actually pay a smaller perccentage than your hard working laborer or assembly line worker, etc. THE FUNCTIONAL TAX RATE…which is what one actually ends up paying in that bracket: 14% to 17%!!!!! A PT I knew who made $75k a year had to pay nearly 50% in taxes-including payroll. After $50k, the payroll drops off and it means the well a SMALLER PERCENTAGE than the middle class.
Don’t believe me, just do the math. Look at Cindy McCains tax returns released during her husbands run for office. Why, and this is actually high-she only paid 21% of her income to taxes. And this woman knew it was going to be screwtinized, so I’m sure she was paying on the higher side just to be safe. And even then, she came no where near 35%. So to the idiot who has no incentive to work or go to school, you probably never had any drive. And maybe that’s why you can’t do basic math and made such stupid statements.
Congrats to ttfitz for being one of the few to actually use that thing between the ears! That’s what we need more humans to do and to be like.
Thank you.
GiGi
Have it on good authority that Cindy McCain would rather pay her accountants close to seven figures per year so she can deduct this as a normally Business expense off her business. There fore she lets them find ways to keep her in the 21% tax bracket. meanwhile the rest of the Non-enligtened world pays 35-40% in taxes…..
If the CARS program is President Obama’s way of reducing or discouraging Americans from buying gas guzzlers, he should follow the Europeans and Asians by taxing on the size of the engine instead of on the weight of the vehicle like what we’re doing. In almost all European and Asian countries, except those countries producing oil, road tax on vehicle is based on the engine size. Also, those non oil producing countries levy a big tax on gasoline and that is the main reason why small diesel engine cars are so popular them and it also gets better mileage.
And in Singapore, they’ve a program called COE(Certificate of Entitlement) in which would be car buyers must purchase before he/she could buy a car. It’s divided into three classes namely anything under 1000, 1001 to 1500 and above 1600 cc. The COE is good for ten years and auctioned monthly. The current COE price for cars above 1600 cc is running like US$12,000. This program was thought of about 35 years ago when oil was still quite cheap by today’s price to get rid of old clunkers.
My husband, he drives a 1997 Olds..He never had much money so he took
very good care of his auto….He drives them to they fall apart on the road, he told me that….He has his oil changed every 2,500 miles. He has it serviced regularly. By doing this, he gets 26 miles to the gal on the road…
He needs to get his car off of the road, but he does not have the money
to do so..It is a shame that people like him who has serviced their car, so they do not put out bad emission’s is being duly punished by this…Why can’t they just say cars that are older then the year 2000…and be done with it….and if it is newer, offer the 3,500…That would solve a lot of peoples dilemmas and help the auto dealers too! Thank you
The worst part of reading through these posts is seeing just how ignorant people are of basic facts concerning our country. To every person above saying tax gas or engine size, you show your total incompetence on USA demographics. Comparing us to Europe is illogical. Our country is far more agrarian than England, (who have ridiculous gas prices), and the millions of people who strive to live by farming or who live in rural areas are the ones least likely to survive those kinds of taxes.
I live in Kentucky and most of our citizens cannot possibly live in urban environments. The vast majority of our state is rural and we have very few upper middle class people compared to those barely making a living. Every one of those people living on farms would be taxed to starvation. If you’re not taxing the manufacturers you simply make it so that hard working poor people cannot even feed themselves. Ever tried to pull a livestock trailer with a Chevy Aveo? Just because millions of people have decided to live an easier, lazier life in the city doesn’t mean that the rest of us agree. This is exactly the kind of thinking that leads to a welfare state many in our government desire.
To the gentleman above who thinks everyone should move into the city so that their commutes are shorter, what would your neighborhood look like if the population jumped by 500% over the next year? Even if everyone drove the highest mpg vehicles the impact to the local environment would be devastating. These kinds of ignorant ideas will cripple our poor people and wreck the local environment. If you’re not taxing the source of these problems, (the vehicle manufactures themselves), you allow them to not bother to research for better efficiency. Costs would be increased for people in the short term but through competition and time those prices would stabilize where a fuel tax would simply enrich our government while continuing to hurt the environment indefinitely.
My ’96 Isuza VAN is listed at 19 mpg, so no trade-in. What is truly sad is that, with common sense, a better law could have been passed. Don’t penalize folks who bought more fuel efficient vehicles in the past. Simply require that the new vehicle get better mileage (5+ at least). It’s so obvious that this would meet the goals of more efficient cars on the road, more efficient cars being built, and more people fairly qualifying. Hey, it’s my tax $ funding this, why am I ineligible for the program for having bought a 4 cylinder van 13 years ago?
To the people accusing me of bad math: Here’s the deal:
2009 Married Filing Jointly:
10% on the income between $0 and $16,700
15% on the income between $16,700 and $67,900; plus $1,670
25% on the income between $67,900 and $137,050; plus $9,350
28% on the income between $137,050 and $208,850; plus $26,637.50
33% on the income between $208,850 and $372,950; plus $46,741.50
35% on the income over $372,950; plus $100,894.50
Anyone see gross discontinuities here? How about the 15% -> 25% jump? At a 15% marginal tax rate, I’m taking home 85 cents on the dollar. At a 25% marginal tax rate, I’m taking home 75 cents on the dollar. 25 cents of taxes / 15 cents of taxes = 1.666. At $67,900, I begin to pay 66% more taxes than I did previously. For those who think that 66% is “slight”, you’re misinformed. It creates an obvious disincentive.
75/85=0.75, so yeah, I’m taking home 85% of what I was taking home before, but you can use that same rational to justify a progressive tax system that goes up to 99%, with each incremental step adding just “a little” bit more hurt.
http://gregmankiw.blogspot.com/2008/10/blog-post.html
Jake, your argument why we can’t afford more taxation is pathetic. Taxation is borne by everybody, living in the city or the country. Anyway, when was the last time you went to a city? If you did, didn’t you see the many homeless people sleeping in park, in car and on the side walk? Most of them are not homeless by choice, they’re homeless because they lost their job or don’t make enough to pay for rent and buy food for the family. Well, what I’m trying to say is that there are more poor people living in the city than in country. At least, the poor in the country won’t starve like those in the city if they’re prepared to work.
As to your argument that many farmers would go broke if the govt levies tax on the engine size and not the weight, would you like to know majority of the buyers of gas guzzlers live in the city and not in the country and many of them own more than one car. The govt. could always subsidize those farmers using fuel efficient vehicle, like those with diesel engine, with minimum excise tax as well as less diesel fuel tax.
If the European farmers and majority of the people there could use diesel engine car/ truck (it gets better mileage) why can’t Americans? There are many very well made American made trucks with diesel engine and with high torque for towing, so why can’t American farmers? Is it because of the fiasco by GM faked diesel engine vehicles made during the 1973 oil embargo that we fight shy of them now? And if you say they are too slow, you would be surprised to know that many of them are now turbo charged and could out perform a gasoline engine vehicle.
The group you should blame for high oil price are those environmentalists who are against oil exploration off the California shore as well as Alaska.
So who is the ignorant one here?
Who decided on the vehicles to qualify for this program….why are new cars on the list when I have a 1990 Dodge Caravan with a 3.0 Liter engine that does “NOT” qualify for this program….
My 2000 Dodge Caravan was 1 point off. The van has nearly 300K miles on it. I’d say it is a clunker. It is listed as getting on average 19 mpg. With the rebate and a nice down payment I would have a paid for smaller automobile better mileage.
it is ironic where someone would take part in this initiative, offering a car that say gets 22 mpg in order to purchase a car that gets 35 mpg (keeping with the spirit and real intent of the initiative), and you are then refused due to the guidelines; 22 mpg is too much.
there should be something that would encourage people to take a larger mpg leap, at least larger than 4 mpg more.
If our govt will just imitate what the UK and Germany have done, much more straighforward program to stimulate car sales. The UK is giving 2000 pounds to new car buyers who scrap their 10 year or older vehicle. Germany is handing out 2500 euros to those who are willing to scrap their 9 year or older vehicle for one that is more fuel efficient. Car sales are up substantially in both countries. Take all out junk cars off the road, the parts falling apart, rusty vehicles, these all ruin our roads, cause accidents, traffics, pollutions, etc. SUV’s, mini van’s, luxury cars, must be taxed higher. This CASH for clunkers program was an idea of a not that bright person in the government, and they work for us, the people. We are paying them to work for the people, so if we are not satisfied with what these workers for the people are doing, we better correct them or let them go. They are just spending our money for nothing.
Many of us don’t realize that those gas consumption figures given by EPA do not reflect the true mileage of a car because of two major reasons.
One, when testing the car in the EPA laboratory, the car was run stationary with no load and no wind resistance.
Two, at that time in point, the gas used by EPA to test the mileage of those clunkers was pure gasoline and wasn’t adulterated with alcohol as it’s now for mixed gasoline reduces a car gas mileage.
No amount of incentive will ever make me have a car payment again–husband lost his job 2 yrs ago and has another but lot less pay-we are staying out of debt.Makes me sick that I have to pay for my friend to have a new car..and she was one of the ones saying it is a waste of money–yet she used it.
I bought my son a 93 honda civic that 4 month ago when it was purchased ran great for about a week. since then we have put a radiator,thermostat,timing belt,water pump, and 2 new tires on the car. it still over heats and is a complete piece of crap. it doesn’t qualify because of mpg. if you ask me it is more of a clunker than a car that runs perfect and gets 17mpg that they are going to crush for scrap. if you got screwed on a used car that should be in the junk yard than that should be the 1st to qualify.
Talking about the quality of American made cars other than those transplanted foreign cars made here, have you guys watched the latest GM tv advertisement? GM, with its recent “heart by pass” was boasting about their car mileage being better than those of Toyota or Honda.
Wake up GM, that kind of advertisement was good during the 1973 oil embargo days but not today. It’s not so much the gas mileage that American consumers care but the quality of your cars. Have a bumper to bumper warranty for X number of years, and I bet you, you would be able to regain American consumers’ confidence in buying your cars, even after the expiration of the CARS program.
Now the next question is, how long do you think it will take for this to back fire and put us where we were LAST NOV! Selling 700,000 cars in this program, if even 25% of them get reposed because people purchased cars they can not afford, that equals 175,000 car loans defaulted on. That does not incude the people who really needed the help. You know the ones that bought there cars in 2005, before the gas increases, the mortage breakdown, you know THE MIDDLE CLASS, who are still trying to make those 400-500 payments that were not a burden in 2005 2006 ans 2007. Now there cars are worth @ least 50% less then they paid for them, thanks to “improving the economy” u also can not get parts to fix them, because all the small business you know The MIDDLE CLASS are out if business, you can not sell them because you owe more then they are worth, so that will be 2010, gift to the MIDDLE CLASS. So glad “FOR THE CHANGE it is taking such good care of the MIDDLE CLASS! I guess the upside is when we lose everything we can qualify for all these PROGRAMS! No wait then our credit will be in the crapper! Looks like all the forty and 50 somethings, will be retiring living in apartments or with thier children and driving the clunkers that did not get destroyed! Is’nt”CHANGE” just great!
I apologize for the grammer and spelling errors, just very frustrated!
I have a 1983 Chevy van Does it qualify for CA Cash for Clunkers and how much is it worth?