Colorado Wastes More Tax Money on Cars

October 27, 2009 6:00 AM 2 comments

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There are those who think technology should stand on its own in the marketplace next to existing products and that the consumer should decide on their own which one they want.  There are many examples of this during the past 30 years.  Laserdisc was advanced for its day but it never caught on and eventually was replaced by DVDs.  BETAMAX was technically superior to VHS but the higher cost of BETA ultimately was not embraced by consumers.  Mechanical watches were very popular and reliable but ultimately quartz watches took over the market relegating the former to niche products and almost killed the Swiss watch industry in the process.

And so it should be with cars.  Early in the car’s history there were wood power vehicles, electric cars, steam powered automobiles, diesel, and gas.  Gas won and diesel became a niche product (in Europe diesel and is taxed differently than gasoline giving it a big advantage).  And so it should be today… let the consumer decide if they want electric, gasoline, hybrid, or diesel.

Unfortunately, “Global Warmers” don’t like the marketplace to decide what’s best because they think they know which is best.  Hence you have all kinds of taxpayer giveaways meant to boost sales of “alternative” vehicle sales like carpool stickers, tax rebates, etc.

So we have news from Colorado that a consumer who purchases the expensive Tesla electric vehicle can get up to $42,000.00 in tax rebates:

According to the U.S. Department of Energy, The Colorado Department of Revenue is offering up to an 85% tax credit for the purchase of a lower-than-normal emission vehicle. To be more precise, Colorado is offering a 50% tax credit off of the purchase price of a new Low Emission Vehicle, 75% back on an Ultra Low or Inherently Low Emission Vehicle, and a staggering 85% back on a Zero Emission Vehicle. To qualify the purchase must be made between January 1, 2007 and January 1, 2010 – that’s it.

So which cars win big with this legislation? The clear winner is the Tesla Roadster which awards its purchaser with a $42,083 tax rebate. Many hybrid models such as the Toyota Prius, Ford Fusion and Honda Insight also qualify for substantial rebates and there are even pure gasoline models that also qualify for various levels of these substantial subsidized rebates.

The base price for a Tesla roadster is $109,000.00.  This money, of course, is not “free” it comes from the taxpayers.  If “alternative fuel” vehicles are so wonderful and have so many benefits, let them sell in the marketplace next to every other type of vehicle without a tax rebate and let the best completing design win!

An interesting side note to these kinds of subsidies on hybrids, diesels, and electric cars are the calls by lawmakers to actually increase the taxes on these types of cars because their fuel economy is too high!  The rationale is that if the average car gets 25 mpg but a hybrid gets 35 mpg the hybrid driver is “using” more of the road per gallon than the other guy so they should pay more to make up for that!

This thinking has already resulting in several legal remedies including one in Wisconsin:

Gov. Jim Doyle said Monday he’s open to a 3-cent gasoline tax increase as an alternative to his proposed tax on oil company sales.

Doyle said he preferred his plan to pay for roads by raising taxes on oil companies by $272 million over two years and barring the firms from passing the tax on to consumers.

The plan would seek to end that practice and over two years would:

• Raise $15 million by putting a $50 annual surcharge on hybrid vehicles.

When the government gets so involved in the marketplace the usual result is things are skewed and confusion is the result.  The answer is to let consumers decide.

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2 Comments

  • $42000 in tax rebate!!!!
    That’s quite an incentive. I think the situation prevailing regarding the environmental pollution, these initiatives were necessary. After all USA is the biggest contributor to the environmental pollution in the whole world.
    The response of some potential car buyers should have been posted so the excitement and perception of the consumers could also be judged.
    However the financial performance of the Tesla Roadster would be quite worth observing after the legilation is sanctioned.
    Car Modification
    .-= saad´s last blog ..Modified Cars Wallpapers-Cool Images Of Some Pimped Out Cars. =-.

    • Actually you are incorrect. The biggest polluter is currently China, with India fast on its heels. And the batteries used in the Tesla, nickel-cadmium, are made from materials mainly mined in China. Nickel-cadmium mines are some of the most toxic in the world with dead zones extending for miles around them. So, in fact, the Colorado government is offering people a financial incentive to buy a car that is extremely destructive of the environment, even if it is in another country.

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