S
stefen
Guest
If you traded in a clunker worth $3500, you get $4500 off for an
apparent "savings" of $1000.
However, you have to pay taxes on the $4500 come April 15th
(something that no auto dealer will tell you). If you are in the 30% tax
bracket, you will pay $1350 on that $4500.
So, rather than save $1000, you actually pay an extra $350 to the
feds. In addition, you traded in a car that was most likely paid for. Now
you have 4 or 5 years of payments on a car that you did not need, that was
costing you less to run than the payments that you will now be making.
But wait; it gets even better: you also got ripped off by the
dealer.
For example, every dealer here in LA was selling the Ford Focus with
all the goodies, including A/C, auto transmission, power windows, etc for
$12,500 the month before the "cash for clunkers" program started.
When "cash for clunkers" came along, they stopped discounting them
and instead sold them at the list price of $15,500. So, you paid $3000 more
than you would have the month before... (Honda, Toyota , and Kia played the
same list price game that Ford and Chevy did).
So let's do the final tally here:
You traded in a car worth: $3500
You got a discount of: $4500
---------
Net so far +$1000
But you have to pay: $1350 in taxes on the $4500
--------
Net so far: -$350
And you paid: $3000 more than the car was
selling for the month before
----------
Net -$3350
We could also add in the additional taxes (sales tax, state tax,
etc.) on the extra $3000 that you paid for the car, along with the 5 years
of interest on the car loan, but let's just stop here.
So who actually made out on the deal? The feds collected taxes on
the car along with taxes on the $4500 they "gave" you. The car dealers made
an extra $3000 or more on every car they sold along with the kickbacks from
the manufacturers and the loan companies. The manufacturers got to dump
lots of cars they could not give away the month before. And the poor,
stupid consumer got saddled with even more debt that they cannot afford.
Obama and his band of merry men convinced Joe consumer that he was
getting $4500 in "free" money from the "government" when in fact, Joe was
giving away his $3500 car and paying an additional $3350 for the privilege.
Think this was stupid for those who were crazy enough to swallow this
wonderful scheme?
Just wait until we get health care with no additional costs over what most
of us now pay for health insurance and the best medical care in the world.
Think that scheme might be designed by the same people who came up with
Cash for Clunkers?
Also, on TV the other day, it was calculated that the program costs the
taxpayers $24,000 per car sold. What a deal!
apparent "savings" of $1000.
However, you have to pay taxes on the $4500 come April 15th
(something that no auto dealer will tell you). If you are in the 30% tax
bracket, you will pay $1350 on that $4500.
So, rather than save $1000, you actually pay an extra $350 to the
feds. In addition, you traded in a car that was most likely paid for. Now
you have 4 or 5 years of payments on a car that you did not need, that was
costing you less to run than the payments that you will now be making.
But wait; it gets even better: you also got ripped off by the
dealer.
For example, every dealer here in LA was selling the Ford Focus with
all the goodies, including A/C, auto transmission, power windows, etc for
$12,500 the month before the "cash for clunkers" program started.
When "cash for clunkers" came along, they stopped discounting them
and instead sold them at the list price of $15,500. So, you paid $3000 more
than you would have the month before... (Honda, Toyota , and Kia played the
same list price game that Ford and Chevy did).
So let's do the final tally here:
You traded in a car worth: $3500
You got a discount of: $4500
---------
Net so far +$1000
But you have to pay: $1350 in taxes on the $4500
--------
Net so far: -$350
And you paid: $3000 more than the car was
selling for the month before
----------
Net -$3350
We could also add in the additional taxes (sales tax, state tax,
etc.) on the extra $3000 that you paid for the car, along with the 5 years
of interest on the car loan, but let's just stop here.
So who actually made out on the deal? The feds collected taxes on
the car along with taxes on the $4500 they "gave" you. The car dealers made
an extra $3000 or more on every car they sold along with the kickbacks from
the manufacturers and the loan companies. The manufacturers got to dump
lots of cars they could not give away the month before. And the poor,
stupid consumer got saddled with even more debt that they cannot afford.
Obama and his band of merry men convinced Joe consumer that he was
getting $4500 in "free" money from the "government" when in fact, Joe was
giving away his $3500 car and paying an additional $3350 for the privilege.
Think this was stupid for those who were crazy enough to swallow this
wonderful scheme?
Just wait until we get health care with no additional costs over what most
of us now pay for health insurance and the best medical care in the world.
Think that scheme might be designed by the same people who came up with
Cash for Clunkers?
Also, on TV the other day, it was calculated that the program costs the
taxpayers $24,000 per car sold. What a deal!
