Many people who traded did not know that they will have to pay income tax on the $4500 rebate. The tax on the rebate could be as much as $1400 depending on what tax bracket you are in.
Also, you have to pay sales tax on the $4500, since it's done as a rebate, that could be up to $300 depending on where you live. and don't forget State income tax on the 4500.
For a person in a top income bracket, there net gain was only about 2600-2700 dollars. They are ok if their car was worth less than that. But what about those people who traded in cars and trucks worth 3000-3500? they got ripped off.
Also, say you had a lower income family do cash for Clunkers. there car was worth 1500 max. Well, before they had no car payment, their insurance was just liabilty, and the tag was cheap.
Now they have a car payment, they have to pay full coverage insurance, and the tag is $300-$400 bucks or more depending where they live. This car is cost them a lot of money.
And, they still get a 1099 on the $4500, which may knock them in a higher income bracket, so they will not get an earned income credit.
And the emmsion reduction, is very small. The same amount of money could have made a bigger reduction if used other ways.
http://green.autoblog.com/2009/08/16...ssions-reduct/
Government has screwed us again.
Quote:
Originally Posted by Frank Lee
I saw an article that said a survey shows 17% of new vehicle owners under the clunkers program are already having doubts and second thoughts about the wisdom of taking on new car payments. 
For the sake of arguement, I'm going to assume 17% of program participants weren't really thinking of getting a new car but did because of the program. Then, 83% of the program sales were going to happen in the near term regardless- people that would have bought earlier but caught wind of the program and waited, and those who would have bought later but did it before program deadline instead.
If my assumption isn't total garbage, that means the $3,000,000,000 program spurred 117,000 "new" sales, at about $26,000/sale. :/ |