econscius

Road Trip to See Your Tax Dollars at Work: $140,000 Car for the 1%

In Electric Cars, Federal Deficit, Obama Administration, Tax Breaks, Top 1% on February 1, 2012 at 11:30 pm

In the interest of optimizing your blog reading experience, econscius went mobile today to see what all the taxpayer subsidies are doing for us in the world of electric cars. 

I took my blog on the road to see a Tesla Roadster at a Tesla Motors showroom.  More precisely, the Tesla vehicle at a Tesla Motors showroom.  These things aren’t exactly flying off the shelves and there is only one at the nearby dealership.  The car is very sharp, indeed, but it runs about $140,000.  The base price is supposed to be $109,000 so I am unclear why they were quoting me a much higher price.  Perhaps this yellow one has some upgraded options or maybe it is just supply and demand, they only have the one for sale here.  Perhaps I’d need to negotiate better.  Nevermind, though.  If you can afford $109,000 plus Illinois sales tax, you probably can afford $140,000.

The car is an example of fine design and engineering.  If I ever sell advertising on this blog and become filthy rich, sure, it would be nice to have one or two of these in an expanded garage!

“Filthy rich”?  Does that imply the 1% to you?  You know, the folks who earn over $343,927 a year? [1]  There are not many working class people who can afford to purchase a Tesla.

I hope you don’t mind a few Reverse Robin Hood manuevers subsidizing your 1% neighbors who’d like a Tesla!  Because you are doing exactly that.  According to the IRS, this Tesla Roadster qualifies for a $7,500 tax credit under Internal Revenue Code 30D, the “Qualified Plug-In Electric Drive Motor Vehicles”. [2]

There was a tax break of up to 50% of the cost of a battery charger installed in your garage, but the new frugal Congress just ended that credit. [3]

Tesla also received a $465 million loan from the Federal Government to develop an electric sedan. [4]  Unlike some other bankrupt Obama Administration green initiatives (think Solyndra, Beacon Power or Ener1), Tesla has not yet defaulted on its loan.  Also, there actually is a car here that runs and is freeway legal in every state.  Perhaps even more surprising, the Tesla is mostly made here in America unlike the Fisker electic car which is backed by a $529 million US government loan, only to be made in Finland! [5]  Tesla liked its first loan from you, the taxpayer, so much it was requesting a new one, but that financing need seems to have died down in the wake of the Solyndra scandal. [6]   Oddly enough, Tesla has never been profitable and continues to rack up a half billion in losses, despite the taxpayer assistance and the high price of the Roadster. [5]

This roadster will only go 244 miles on a battery charge [7], so it is best for cruising around and showing off to the yard help in a 1% neighborhood; it is not for driving the kids to camp or seeing the relatives in Ohio.

Thank you for reading, but please get back to work; President Obama and your Tesla desiring wealthy neighbors would appreciate you working a bit harder to provide the taxes to fund these cool toys for the 1%!  The Obama campaign contributors who will reap the rewards if Tesla is successful [5] surely would appreciate you putting in a little ovetime so they can get richer.

I know, I know, you say “what ever happened to Venture Capital?”  Yes, it is true that way back, before 2009, private investors used to invest their own money in new business ventures.  It worked for Microsoft, Groupon, Facebook, eBay, Amazon and thousands of other companies.  But that is so pre-Obama.  Today, private investors still put forward new companies but instead of turning to Venture Capitalists for funding, you the taxpayer are to be on the hook for tens of billions in government “investments”.  Enjoy the view of the Tesla, you paid for it!

Roadster 2.5 windmills trimmed.jpg

[1] https://econscius.wordpress.com/2011/11/17/who-are-the-top-1-most-arent-in-finance-fewer-still-in-mortgages/

[2] http://www.irs.gov/businesses/article/0,,id=214841,00.html and http://www.fueleconomy.gov/feg/taxevb.shtml

[3] http://www.usatoday.com/money/autos/environment/story/2011-12-30/electric-car-charger-tax-breaks/52234182/1

[4] http://www.wired.com/autopia/2009/06/tesla-loan/

[5] http://abcnews.go.com/Blotter/car-company-us-loan-builds-cars-finland/story?id=14770875

[6] http://blog.sfgate.com/energy/2011/09/28/tesla-fed-loan-update/

[7] http://www.carsdirect.com/electric-cars/how-much-does-the-tesla-roadster-cost

Showroom picture by author.  Windmills and roadster picture from Wikipedia Commons.

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