Cash for Clunkers is essentially a TAX CUT for car buyers, the Right supports TAX CUTS don't they?

[wndycty]

Seriously. $4,500.00 on a car purchase is basically a targeted tax cut or at least it has the same impact that a tax cut would have. The right keeps crying about this TAX CUT. LOL

[slackmaster]

1. I think they view it as a tax increase for everyone who does not buy a new car

Or something like that.

[TexasObserver]

2. The Right hates anything that Democrats do which works.

But you're right. This is a tax cut that goes directly to the consumers while helping auto dealers move cars. This has been a great little program at a time when the economy needs a positive movement.

[AngryAmish]

3. Then why don't I get a tax cut?

I don't have a gas guzzler so I am unable to participate. No soup for me. I am buying a car right now and would love to have $4,500 but since I am not favored by the government I go without.

[ramapo]

4. My thoughts exactly

The Republicans are just unbelievable

[Skink]

5. tax rebate aimed at those making less than 250000.

what was he thinking.

[Cresent City Kid]

6. Let's see

1. People get price breaks, and a new fuel efficient car.
2. Dealerships get increased business.
3. Factories get back to work. (Plus suppliers)
4. States get sales tax revenue.
5. The Earth gets a slight break from carbon.

Why am I supposed to oppose this?

[endarkenment]

7. for the rich only

The clunkers program mainly benefits lower middle class families that keep cars for a long time and can now afford to buy a new car with this program. The rich collect old (antique) cars but it is the rare rich person that keeps a qualifying clunker.

Mostly the right hates and seeks to obliterate anything that looks like a successful and popular government program.

[Obamanaut]

8. Or, it's taking 1 to 3 billion dollars of taxes and redistributing it in

the form of a subsidy to those folks who can afford to make payments or pay cash for a vehicle AND who have the right kind of a vehicle to trade in. We have a Mercury Sable that gets about 29 mpg on the highway, about 24 total avg., so we are shut out.

[zbdent]

9. and the cash goes to the business owners, right?

I wonder how many auto dealership owners are NOT millionaires ...

(and no, I'm not talking about the corner "dealerships" where, two years ago, it was the parking lot of a 7/11 ...)

[endarkenment]

10. Huh? How does 'the cash goes to the business owners'?

The 'cash' goes to the buyer of the car in the form of a rebate on the purchase price. So if the car costs 20,000 to purchase, the buyer pays only 15,500. The government is effectively kicking in the difference. The dealer gets some of the 20,000 purchase price in markup, call it 10% or 2,000, the manufacturer gets the remainder. That remainder in turn has some profit and the rest is the cost of manufacturing the vehicle, including of course the salaries of everyone who worked on that car. How exactly do you figure that the 4500 goes into the dealers pocket?

[zbdent]

12. it ain't "cash to the seller of the clunker", right?

so, all that money that Congress provided for the "Cash for Clunkers" never goes to the person turning in the clunker ...

kinda like the old joke of a wife, who buys an expensive dress, tells her husband "But look how much money I saved because it's on sale!"

The car is on the lot of the dealership, right? As I remember, the dealerships have to take out loans to get more inventory ...

so, any money disbursed on the "cash for clunkers" would go to the place that gave the "rebate" ...

That's how I see it ... there's no "direct bribery" of the consumer ...

[endarkenment]

14. 'so, any money disbursed on the "cash for clunkers" would go to the place that gave the "rebate" ...

no. lets go back to the example. 20,000 car purchase price. 2,000 dealer markup. The dealer gets 2,000, 450 of which came from the government. The manufacturer gets 18,000, 4,050 of which came from the government. The buyer gets a 20,000 car for which he paid 15,500. Your original statement that the dealer gets the 4500 is just blazingly simplistic and wrong headed. Even if the dealer purchased the vehicle for cash from the manufacturer, he is still only 'getting' the markup value minus overhead from that 20,000, the remainder is replacing the money he put in to purchase the vehicle to begin with. The 4,500 is not separate from the other money that goes into the transaction. You can't pull that part out and honestly claim that money is going directly to the dealer.

[zbdent]

16. so when an auto dealer has stock at the end of the year ...

he/she can just send it back to the manufacturer?

[endarkenment]

17. no but so what?

The risk of the dealer's capital is in part why the dealer is justified in taking a markup on selling you a car. The cars he sells replace the capital he invested (or his bank invested for him) in his stock.

The dealer was going to charge approximately the same amount for the car, rebate or no rebate, and make approximately the same profit on that sale, rebate or no rebate. The rebate simply changes who is making some of that payment, not the dealers profit on the transaction. The dealer doesn't put 4500 in his pocket per car from the government to spend on yachts and bling. He replaces some of the capital invested in his stock and makes a profit on the transaction, just like any other retail outlet does when it sells something.

The program might help (and in fact has helped) dealers sell more cars, and thus make more profit, but that was the idea, right? Sell more cars, make more cars, more people employed selling and making cars, everybody wins, even us taxpayers, in the long run, as we all benefit from a healthy economy and the per capita cost of this program is really not very much.

[zbdent]

19. my point is this ...

the money goes to the dealership owner. Period.

You even said "Even if the dealer purchased the vehicle for cash from the manufacturer" ... the money has already gone to the manufacturer. If you sell your house to someone, and they've taken a loan from the bank, does the bank hold the money and dole it out to you in installments, or does it go to your (the seller's) bank account?

Once that $4500 goes to the dealership owner, then he or she decides what to do with the money. Pay bills, pay his employees, whatever. RIGHT??? You are the one who started saying that the $4500 goes to the dealership owner buying yachts, etc. If the dealership owner, with the $4500/car subsidy, doesn't pay the bills or the employees, then that person is committing something unethical, and possibly illegal.

If the car was "loaned" to the dealership by the manufacturer, then the $4500 FROM THE GOVERNMENT would logically go to the manufacturer. At the end of the year, then, you probably wouldn't have "inventory reduction sales" by the dealership to recoup losses.

Edited to add:

I am in FAVOR of this ... it's getting some movement on the system. But the "cash" just doesn't go to the every day joe. Unlike the $300/$400 "stimulus checks" of 2001-2008. But those went to everybody.

[ContinentalOp]

11. A tax cut for people who bought gas guzzlers. -nt-

[maxrandb]

13. No

They only support tax cuts if the wealthy make out. To get them to support the "cash for clunkers" program, you'd have to do this.

- $4500 rebate for the bottom 95% of American wage earners

- $450,000 rebate for the top 5% of wage earners

That way it's an "across the board" cut based on income.

Hmmmmm, something tells me there is a "good" Democratic National Committee advertisement in my above example.

[prolesunited]

15. What they hate is that is supports the auto industry

You know, the companies that still have good-paying UNION jobs with benefits. You can't destroy the middle class without annihilating unions.

[spanone]

18. the right supports THEIR taxcuts...it's all about politics. oppose, oppose, oppose.

if you present nothing it is all you have.