donbfishin
09-27-2009, 22:47
The New Math of Hope and Change:
If you traded in a clunker worth $3,500, you got $4,500 off for an apparent "savings" of $1,000.
However; you have to pay taxes on the $4,500 come April 15th (something that no auto dealer would tell you). If you are in the 30% tax bracket, you will pay $1,350 on that $4,500.
So, rather than save $1,000, 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 and 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 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 $3,000 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: $3,500
You got a discount of: $4,500
Net so far +$1,000
But you have to pay: $1,350 in taxes on the $4,500
Net so far: <$350>
And, you also paid: $3,000 more than the car was selling for the month before
Net <$3,350>
We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3,000 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 $4,500 they "gave" you. The car dealers made an extra $3,000 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 he cannot afford.
Obama and his band of merry men convinced Joe consumer that he was getting $4,500 in "free" money from the "government" when in fact Joe was giving away his $3,500 car and paying an additional $3,350 for the privilege.
If you traded in a clunker worth $3,500, you got $4,500 off for an apparent "savings" of $1,000.
However; you have to pay taxes on the $4,500 come April 15th (something that no auto dealer would tell you). If you are in the 30% tax bracket, you will pay $1,350 on that $4,500.
So, rather than save $1,000, 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 and 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 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 $3,000 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: $3,500
You got a discount of: $4,500
Net so far +$1,000
But you have to pay: $1,350 in taxes on the $4,500
Net so far: <$350>
And, you also paid: $3,000 more than the car was selling for the month before
Net <$3,350>
We could also add in the additional taxes (sales tax, state tax, etc.) on the extra $3,000 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 $4,500 they "gave" you. The car dealers made an extra $3,000 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 he cannot afford.
Obama and his band of merry men convinced Joe consumer that he was getting $4,500 in "free" money from the "government" when in fact Joe was giving away his $3,500 car and paying an additional $3,350 for the privilege.