Re: $5000 'bonus' for fuel efficient cars

On NPR I heard a story about a soft-ware company in Santa Clara, Hyperion (?), that is now offering $5000 to any employe that buys a car that gets more than 45 MPG. The article never mentioned Diesels, but never said it had to be a hybrid, only stating the 45 MPG benchmark. The boss talked about how all of them had to get on waiting lists for Priui (prius plural? SP?). I wonder if they pay out on TDIs? What if an employee showed up in a 97' Jetta they bought for $4500? It gets 45 MPG easy as well...

http://www.bizjournals.com/sanjose/stories/2004/11/29/daily4.html You gotta love the headline:

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Hyperion offers employees $5,000 if they buy hybrid car

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Which later goes on to say:

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The standard also is achievable by fuel-efficient vehicles using technologies such as hybrid, diesel and electric that increasingly are available in most of the countries in which Hyperion does business, Hyperion says

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what do they give you if you ride a bicycle?

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Originally posted by ertzog
what do they give you if you ride a bicycle?

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probably nothing, it's too much work[:p]

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Originally posted by ertzog
what do they give you if you ride a bicycle?

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What are you? Some kind of anti-technology freak? [}:)] Driving an automobile is our God given right, not to be infringed upon by the leftist, pinko, commie gooks that infest our nation! [:0]

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Originally posted by jackbombay
On NPR I heard a story about a soft-ware company in Santa Clara, Hyperion (?), that is now offering $5000 to any employe that buys a car that gets more than 45 MPG. The article never mentioned Diesels, but never said it had to be a hybrid, only stating the 45 MPG benchmark. The boss talked about how all of them had to get on waiting lists for Priui (prius plural? SP?). I wonder if they pay out on TDIs? What if an employee showed up in a 97' Jetta they bought for $4500? It gets 45 MPG easy as well...

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I heard an interesting proposal from Fred Alger Management that believes in getting our desire to drive high MPG vehicle. I've recorded it and stuck it on my spreadsheet page. [url]http://www.saywhat.biz/richc/2003jettatdi[/url] It is an interesting tax incentive approach that create a very attractive reason to consider driving higher efficiency vehicles ... its worth entertaining the thinking but feel the uphill battle is a long, hard climb. I've always liked the postive incentives rather than the punishment added tax method ... I know its all relative as taxes still have to be generated to pay for our national spending unless you really like deficit spending???

Rich, I am listening to it right now. I guess I don't see a need for new taxes like this. Why not simply raise the gas tax to create the incentive? If you switch from a 15 mpg car and buy 1,200 gallons per year to a 50 mpg car and buy 360 gallons you save on 840 gallons per year and then if there is a $1.00/gallon tax you would be saving $840 in taxes and probably another $2,000 in fuel expense. If that isn't enough incentive for people nothing will be. It also uses the stick to smack those that are running around in Chevy Suburbans to buy their groceries and run the kids to school. I have the same issues with Oregon's look into GPS mile tracking and taxing and Washington's newest thougth of creating GPS tolls for each road you drive on. If they want to get more money simply raise the fuel tax. It solves multiple problems all in a single, simple tax. 1) The higher tax is and incentive to get a more fuel efficient vehicle. 2) The higher tax is a disincentive to burn fuel when there are alternatives (walking, biking, car pooling, combining errands) 3) The higher tax reduces total fuel burned helping reduce our dependence on foreign oil 4) The higher tax will result in more funds for road improvements reducing congestion and thus further reducing fuel consumption. The idea should be to simply start with an added $.50 a gallon tax and then raise it by some amount each year for the next 25 years or so. Not sure how much it would need to be raised, but that could be determined. Probably in the $.05 - %.10 a year range (so that in 25 years the tax would be between $1.75 and $3.00 per gallon).

Jorpet... I think you miss the point just a little bit. Instead of adding a tax to gas or gasguzzling ... your reward those choosing to do what they can to make a difference for the better. Higher efficiency and cleaner cars ... get a tax incentive ... and make it worth considering. Here is an example of what I run into right now ... I live in a middle to upper income area and in talking to my friends and neighbor about cars and choices, they look at the total cost of driving. In their eyes even doubling the price of gas is still do-able and will not change their purchase. They laugh when they calculated how much a year difference in cost of a $40K vehicle ... like about $1000 in fuel cost difference ... on a weekly basis to them it is pocket change and a cost worth paying. Adding a tax at the pump would be far more regressive than offering credits for those purchasing >30 vehicles. (and I'm only using >30 because of the article. I'd like to see >30 >40 >50 >60 and each getting a better tax incentive?) Now create a tax credit in purchasing the >30 vehicle and I'll bet a few more will find a vehicle that fits there needs that get 30 MPG? Its not a punishment tax for chosing a gas guzzler .... an incentive for picking the more efficient vehicles. Look at what the small business vehicle purchases did for big SUV sales ... that was a tax based decision. I know its all perception in something that is a tax or and incentive when you boil it all down ... because the cost to run the country still has to be paid, but 'packaged' as an incentive to be more efficient sells better than a penality for those chosing to consume more fuel. (besides 50% of the fuel savings in buying higher efficiency vehicles is money being sent overseas) My bet is that car companies would have no problem producing >30 SUV and cars to fit the American lifestyle?

Rich, It is true that those with amazing amounts of money would laugh at $3.00 a gallon, even %5.00 a gallon, but that is all of about 5% of the population. If we focus on the other 95% that is more price conscious we would get further. I think of our neighbors who bought a Suburban for driving around town. It gets about 12 mpg and costs $80 to fill up every other week. Push that cost up closer to $150 every two weeks and they would definitley notice. My B-I-L just got a Suburban as well. He is probalby makes about $30-40,000 a year. If the cost for gas went up a buck a gallon you can be sure it would hit him where it hurts. These are the people you need to get changing cars. As for it being regressive, I guess it is if people with less money want to drive big cars, but they are the ones you want to target. I don't believe in government sponsored incentives since the cost/benefit always comes out upside down. The real beneficiaries tend to be the government and companies. The consumer almost always comes out even at best.

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Originally posted by JorPet
As for it being regressive, I guess it is if people with less money want to drive big cars, but they are the ones you want to target. I don't believe in government sponsored incentives since the cost/benefit always comes out upside down. The real beneficiaries tend to be the government and companies. The consumer almost always comes out even at best.

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We differ ... I prefer incentives for 'improving' our society verses increasing taxes as a disincentive for choices. Maybe its my simple minded way of looking at things, but most people respond well to positive encouragement v. punitive tax. Incentives put more money in the hands of the taxpayer ... punitive taxes put more money in the hands of government.

Who was going to provide this incentive? I thought it was going to be another government program. Thus my tax money would be going to support those who want to buy new cars (albiet more fuel efficient ones). Thus it means that a new tax must be levied somewhere else to pay for those incentives or we, as a country must go further into debt. Since every government subsidy program is rife with inefficiency and corruption it is another sink hole for our taxes to go into. One that costs the tax payers more than the benefit they recieve. Did I miss something on this? Were the incentives not government funded?

Credit means government doesn't get their grubby 'big' hands on the dollars to spend on pork. (unless you think it is pork to have people choosing to by an efficient vehicle rather than a 'guzzler?' This is all pie in the sky anyway ... you know that there isn't support for this or a bigger tax on already inflated oil this year. Auto lobby, Oil lobby, Average American that wants his truck/SUV/500HP sports vehicle ... there's just "a whole lot of consummin' going on." (who's quote was that???)

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Originally posted by Rich
Credit means government doesn't get their grubby 'big' hands on the dollars to spend on pork. (unless you think it is pork to have people choosing to by an efficient vehicle rather than a 'guzzler?'

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No, what it means is that the government will "give away money" that it doesn't have increasing the National Debt by even more. In the meantime they would have to create an entire new organization within the government to handle the program employing thousands of people. Then there would be those that manage to work the system and get money they shouldn't have or more than they are due. You sure you aren't a Democrat? [}:)]

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Originally posted by ertzog
what do they give you if you ride a bicycle?

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They probably fire you for showing up to work all sweaty and stinky. [;)]

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Originally posted by JorPet
Rich, I am listening to it right now. I guess I don't see a need for new taxes like this. Why not simply raise the gas tax to create the incentive? If you switch from a 15 mpg car and buy 1,200 gallons per year to a 50 mpg car and buy 360 gallons you save on 840 gallons per year and then if there is a $1.00/gallon tax you would be saving $840 in taxes and probably another $2,000 in fuel expense. If that isn't enough incentive for people nothing will be. It also uses the stick to smack those that are running around in Chevy Suburbans to buy their groceries and run the kids to school. I have the same issues with Oregon's look into GPS mile tracking and taxing and Washington's newest thougth of creating GPS tolls for each road you drive on. If they want to get more money simply raise the fuel tax. It solves multiple problems all in a single, simple tax. 1) The higher tax is and incentive to get a more fuel efficient vehicle. 2) The higher tax is a disincentive to burn fuel when there are alternatives (walking, biking, car pooling, combining errands) 3) The higher tax reduces total fuel burned helping reduce our dependence on foreign oil 4) The higher tax will result in more funds for road improvements reducing congestion and thus further reducing fuel consumption. The idea should be to simply start with an added $.50 a gallon tax and then raise it by some amount each year for the next 25 years or so. Not sure how much it would need to be raised, but that could be determined. Probably in the $.05 - %.10 a year range (so that in 25 years the tax would be between $1.75 and $3.00 per gallon).

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Personally, I'd prefer that they instead create a separate petroleum tax. The road tax ("fuel tax") is meant to be used for maintaining the roads. Instead of raising that, it makes more sense to make a separate tax that only applies to the problem - petroleum. That way, not only does it encourage people to buy more fuel efficient vehicles, but also to use alternative fuels, without using subsidies to do it.

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Originally posted by Rich We differ ... I prefer incentives for 'improving' our society verses increasing taxes as a disincentive for choices.

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Part of the problem with incentives in the form of credits or handouts to get people to do something is where will all the money come from once a lot of people start doing it? Say we have a $3,000 credit for people buying a >40 mpg car. If 10 million people buy them, that's $30 billion. Ouch! Also you run into the problem of having cutoff points. Say it's at 40 mpg - then a person who buys a 39 mpg vehicle gets squat. Maybe he needs a truck for work, and the most efficient he can find gets 39 mpg - he may just as well buy one that gets 12 mpg, if there isn't much penalty for that low of mileage.

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Maybe its my simple minded way of looking at things, but most people respond well to positive encouragement v. punitive tax. Incentives put more money in the hands of the taxpayer ... punitive taxes put more money in the hands of government.

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Money in the hands of the taxpayer that comes from credits or subsidies though has to ultimately come from taxpayers to begin with. A $3,000 tax credit means either we raise taxes elsewhere enough to pay that, or else we run a deficit. I favor a petroleum tax as a "sin tax" since it's easier to implement, and the effect is clearer and continuous - as well as encouraging the use of alternative fuels. Use the revenue to decrease income taxes so people don't pay more overall - but WHERE they pay it will encourage them to use less petroleum. Part of the problem with incentives comes with used cars. Does a person who buys a 2 year old vehicle that gets 60 mpg get the credit also? One-time credits I feel would encourage people to buy a high mileage vehicle, and sell it once they get their credit - and either buy another one, or buy something else that may get much lower mielage, but now they have extra money from the briefly owned high mileage vehicle to help pay for it.

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Originally posted by Rich This is all pie in the sky anyway ... you know that there isn't support for this or a bigger tax on already inflated oil this year. Auto lobby, Oil lobby, Average American that wants his truck/SUV/500HP sports vehicle ...

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Ayup. I wonder what it would take for the average American (and politician) to change their opinion on this.

OK. Make it a "National PetroleumDefense" tax that pays for defending/controlling the oil producing regions of the world. All of the military budget that doesn't go for direct protection of our national borders must come out of the tax. I would be all for that!

for shame. then it would be "un-american" to avoid the tax by having a fuel efficient vehicle. you would be minimizing funding for bushy's oil wars.