Infrastructure Bill passed. I don’t think this is good.

mdrobc1213

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The latest House version of the BBB act, which appears ready to pass tonight, has the following new (revised) section with upper MSRP limits on eligible newly purchased EVs:

[cut-and-pasted from Part 4, Sec. 136401, new Sec. 36C.d]

(d) Manufacturer's Suggested Retail Price Limitation.--
``(1) In general.--No credit shall be allowed under
subsection (a) for a vehicle with a manufacturer's suggested
retail price in excess of the applicable limitation.
``(2) Applicable limitation.--For purposes of paragraph
(1), the applicable limitation for each vehicle classification
is as follows:
``(A) Sedans.--In the case of a sedan, $55,000.
``(B) Vans.--In the case of a van, $64,000.
``(C) Sport utility vehicles.--In the case of a
sport utility vehicle, $69,000.
``(D) Pickup trucks.--In the case of a pickup
truck, $74,000.”
Bill will still need to go to the Senate to pass then any changes back to the house for reconciliation prior to passage. Both have to agree before final gets to POTUS desk to sign. Next week is Thanksgiving then the holidays in Dec so window to do all of that and sign off on a final bill and language on this before 31 Dec 2021 is shrinking rapidly guys. I would not rule out that it gets done but with more changes and the final signoff gets pushed into early 2022. In that case can see a later implementation date. Point is we don't know what the final result will yet be...just lots of folks seemed to be waiting to take delivery of their cars. The new Sport Turismo release yesterday probably didn't help the anxiety tho! Waay outside of the limits above!
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Mr.Smith

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Bill will still need to go to the Senate to pass then any changes back to the house for reconciliation prior to passage. Both have to agree before final gets to POTUS desk to sign. Next week is Thanksgiving then the holidays in Dec so window to do all of that and sign off on a final bill and language on this before 31 Dec 2021 is shrinking rapidly guys. I would not rule out that it gets done but with more changes and the final signoff gets pushed into early 2022. In that case can see a later implementation date. Point is we don't know what the final result will yet be...just lots of folks seemed to be waiting to take delivery of their cars. The new Sport Turismo release yesterday probably didn't help the anxiety tho! Waay outside of the limits above!
Including today I believe there are 11 days in session left in 2021.
You're right, if there are any changes from Senate, it will probably move to 2022.
The saving grace could be the Union verbiage that can send it back to the House
 

Bella

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Including today I believe there are 11 days in session left in 2021.
You're right, if there are any changes from Senate, it will probably move to 2022.
The saving grace could be the Union verbiage that can send it back to the House
However is it likely that regardless when passed it will be retroactive to 12/31/21. Like many other people on this forum I have a 1/22 delivery .
 

JGF

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However is it likely that regardless when passed it will be retroactive to 12/31/21. Like many other people on this forum I have a 1/22 delivery .

Senate version is Retroactive to 01/01/2021 .. 2021!!! new rules would apply to TAX year 2021 .

""(d) Effective Dates.—

(1) EXTENSION.—The amendments made by subsection (a) shall apply to vehicles acquired after December 31, 2020.""

Senate S.395 - Electric CARS Act of 2021
 
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Prit

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Senate version is Retroactive to 01/01/2021 .. 2021!!! new rules would apply to TAX year 2021 .

""(d) Effective Dates.—

(1) EXTENSION.—The amendments made by subsection (a) shall apply to vehicles acquired after December 31, 2020.""

Senate S.395 - Electric CARS Act of 2021
Dang, no escaping. I was hoping it would pass after Jan too. Damn it!
 


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Senate version is Retroactive to 01/01/2021 .. 2021!!! new rules would apply to TAX year 2021 .

""(d) Effective Dates.—

(1) EXTENSION.—The amendments made by subsection (a) shall apply to vehicles acquired after December 31, 2020.""

Senate S.395 - Electric CARS Act of 2021
Senate S.395 is only a modification to existing Internal Revenue Code Section 30D, which is the existing EV tax credit. The House BBB bill replaces/terminates Section 30D. I don't believe S.395 will apply, if/when the Senate takes up the BBB bill.

But as other posts have indicated, even if the "new" EV tax credit law is not passed by December 31, 2021, congress could always pass that provision later in 2022, and make it effective whenever they want. In the possible situation that no changes occur to existing law - section 30D - during 2021 buying a Taycan in 2021 probably gets you the credit. But then 2022 buyers will not know what will happen to the law before the end of 2022.
 

cometguy

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not that it matters much for a Taycan in terms of federal tax credit, but does a Turismo wagon count as a sedan or an SUV? Whoever wrote this in the House clearly thinks that sedans, vans, SUVs and pickup trucks are the only four categories of vehicles today... And I've never seen "SUV" definitively defined (or "crossover", for that matter) ...
 


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not that it matters much for a Taycan in terms of federal tax credit, but does a Turismo wagon count as a sedan or an SUV? Whoever wrote this in the House clearly thinks that sedans, vans, SUVs and pickup trucks are the only four categories of vehicles today... And I've never seen "SUV" definitively defined (or "crossover", for that matter) ...
Good question.
 

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not that it matters much for a Taycan in terms of federal tax credit, but does a Turismo wagon count as a sedan or an SUV? Whoever wrote this in the House clearly thinks that sedans, vans, SUVs and pickup trucks are the only four categories of vehicles today... And I've never seen "SUV" definitively defined (or "crossover", for that matter) ...
Extract from text of proposed law:
From text of H.R. 5376 section 136401

‘‘(2) APPLICABLE LIMITATION.—For purposes of paragraph (1), the applicable limitation for each

vehicle classification is as follows:

‘‘(A) SEDANS.—In the case of a sedan, $55,000.

‘‘(B) VANS.—In the case of a van, $64,000.

‘‘(C) SPORT UTILITY VEHICLES.—In the case of a sport utility vehicle, $69,000.

‘‘(D) PICKUP TRUCKS.—In the case of a pickup truck, $74,000.

‘‘(3) REGULATIONS.—For purposes of this sub section, the Secretary shall prescribe regulations for determining vehicle classifications using criteria similar to that employed by the Environmental Protection Agency and the Department of Energy to determine size and class of vehicles."


Maybe that means what is shown in this EPA document:
https://www.fueleconomy.gov/feg/pdfs/guides/FEG2021.pdf
 

cometguy

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Curious... So that document (https://www.fueleconomy.gov/feg/pdfs/guides/FEG2021.pdf) lists the Audi Allroad, Audi RS6 Avant, AMG E63, and Volvo V90 all as "midsize station wagons", and then the Mach-E is a "small station wagon" along with the Audi A4 Allroad... whereas the Panamera Sport Turismo is a "large car"... The Cross Turismo wagon is only about 2-3 inches shorter than the Panamera ST, so I guess it's a "large car" also?
 

Tooney

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Curious... So that document (https://www.fueleconomy.gov/feg/pdfs/guides/FEG2021.pdf) lists the Audi Allroad, Audi RS6 Avant, AMG E63, and Volvo V90 all as "midsize station wagons", and then the Mach-E is a "small station wagon" along with the Audi A4 Allroad... whereas the Panamera Sport Turismo is a "large car"... The Cross Turismo wagon is only about 2-3 inches shorter than the Panamera ST, so I guess it's a "large car" also?
May not be why you are asking, but for the purposes of the proposed/revised tax credit, unless Feds classify it as an SUV, van, or pickup, it is a "sedan".
Also, on page 20 of the document you linked, Turismo is listed in mid-sized car category.
 

mdrobc1213

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My take is that it will probably not pass before they break again for the holidays in the Senate given the current differences that hell took them 60+ days to figure out just for the House Bill. Remember any change have to go back to reconciliation in the House unless they all just accept what comes back from the Senate. No work for the rest of this week and next week is Dec...then short month also. I think it will likely pass in Jan 2022 latest February but suspect any huge tax changes if it passed later than Feb will be pushed past say 15 Apr 2022 to allow filers to file using ONE set of clear instructions. If they change thing midway thru filing season which starts remember in early Jan 2022 then they risk mass confusion amongst a small but growing portion of the tax filing base as to what the hell the tax rule is and what is owed. Mass confusion could and will likely result...hell none of us knows what's going on and look at how confused WE are! LOL

My daughter is currently waiting still for an amended return to be dispo'd since March 2021...each call still pending and unprocessed due to COVID19 closures prior....first 12 weeks then 16 weeks then 20 week and still hold on IRS says it WILL be processed...do NOT refile. Have already written her Congressman..no help other than to verify she's on the list/in the que. Do you really think the IRS wants to add to that amended return list from a couple o thousand to tens of thousand EV buyer? Probably not...smart money would be it goes into affect and is effective NEXT tax year for 2022 taxes filed in 2023. Would make sense and save lots of folks and IRS pain...but then again its the govt so why should they do the SMART thing!
 

plamichigan

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Why is it a "boast"? I never buy anything on credit when I can pay cash, especially a non-essential luxury item. All my retirement funds are in index funds, including the portion that are bonds. I've basically followed Warren Buffet's advice on that. I call it the Ron Popeil "Set it and Forget it" investment methodology.

The only time I've tried to finance a car I ended up paying it off in 6 months. I absolutely hate owing money. I'm not wealthy, at least I don't feel wealthy, but my wife and I are comfortable. At our age, we have zero debt and sufficient funds to maintain our lifestyle. We've both worked hard all of our lives and the last thing I'm interested in at this point is *working* to try and accumulate more wealth. As it is we'll probably end up leaving our heirs a decent amount. Note: If I could we'd plan it so our funds hit zero when we do ;-)

So, I'm not sure why it should offend you that not all of us are interested in leveraging debt or *working* to accumulate more wealth. And no, I'm not from a wealthy family, 20 years in the Army, 30 Years as a Data Scientist. If leveraging debt is your thing, go for it, but it is pretty rude to denigrate those of us that simply aren't interested.

Speaking as an economist that studies consumer spending, I'm quite happy when people avoid getting into debt. Debt has its uses, and it also has its problems. For many people, controlling their risk by avoiding debt makes sense.

You can, at least theoretically, financially engineer your asset purchases and financing to establish an overall level of debt that you find optimal. There's a lot of that in finance books (including the ones I cite from time to time.) However, in real life people face lots of issues and market imperfections and asymmetrical risks that don't appear in those finance models. One way, tried and true, to mitigate your risk is...avoid borrowing.

PLA
 

whitex

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Speaking as an economist that studies consumer spending, I'm quite happy when people avoid getting into debt. Debt has its uses, and it also has its problems. For many people, controlling their risk by avoiding debt makes sense.

You can, at least theoretically, financially engineer your asset purchases and financing to establish an overall level of debt that you find optimal. There's a lot of that in finance books (including the ones I cite from time to time.) However, in real life people face lots of issues and market imperfections and asymmetrical risks that don't appear in those finance models. One way, tried and true, to mitigate your risk is...avoid borrowing.

PLA
While I agree that debt needs to be managed, it is no different than any other economics decision. Whether or not to borrow money, or whether or not to buy or sell something, all are decisions which have associated risks and rewards.

An economy without any debt doesn't work well either. Debt can be a tool to enable opportunity, both at corporation level (expansion loans, production material loans, etc.) as well as individual level (student loans, trade tool loans, home mortgage, etc). Debt is also what enables people to build up savings (retirement funds, etc). There is no simplified "debt is bad" or "debt is good" answer for anyone - each situation is different.
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