Sunday 3 January 2010

The Plan, The Scam, The Man

Don't ya just love it when a plan comes together?


Here is what a learned friend had to say about Democratic Math. It's even worse apparently than I first thought:

It's way worse than that. Ignore all the gas crap and just look at how the stupid car buyer got taken to the cleaners:

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, in LA every dealer was selling a 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?

Never trust the Government . . . . . . . . . . . . . STORMBRINGER


Curmudgeonly Liberal said...

See, there you go again. Publishing half-truths and outright lies with just enough reality tossed in to make the story seem plausible. Gotta hand it to you. You could be your own religion. Hmm...The-ologly Spark...

Unknown said...

Nope. The rebate check is not taxable income (at least Federally).

That does not invalidate your comments about dealers being able to raise prices because of increased demand -- that is quite valid.

Anonymous said...

80 percent of the cars for clunkers were foreign models, not GM Ford or Chryslers.


Yours is a typical Liberal knee-jerk reaction when presented with facts and logic. "On the Battlefield of Wits, you, sir, are unarmed."

Unknown said...

The cash for clunkers money is not subject to Federal income tax.