How your Hybrid was Paid for by the Lower/Middle Class
Some thoughts on government intervention that I am sure most people at face value would say is great really distributes wealth from the lower and lower middle classes to the upper middle and high class.
It was all done with Hybrid cars. Turns out our all wise government decided we need to have tax credits when buying a new hybrid car (Reference). At face value sounds great, this will encourage production of hybrids because it will lower the cost to get a hybrid thus increasing the number of people who can afford them. It gets support from green/auto/union etc.
What is the side effect of this policy though? Turns out in absolute terms it’s not all great. Hybrids being new and complicated are kinda pricey. Cheapest base model I found was around$20,000 (2008 Toyta). This is out the range of price for a regular house hold. Remember the median house hold income is around $47,000/yr and that’s on average a family including kids. So the only people who can really afford these cars are upper middle class and wealthy people.
So this is where the short change comes in. Only wealthy people can afford these cars and thus they get the tax break. Everyone pays taxes though. So everyone pays in to provide these breaks but only those who are rich can get them.
Now there is some technical arguments against this, mostly based that we run a deficit and thus the whole does not make up for these credits, its just financed. In general thought though when was the last time you saw someone say we could raise the taxes on the rich (roll back the Bush tax cuts) also say and get rid of that tax breaks on hybrids. I best most who want to do the first would not want to do the second. In the end it’s all money.
Just trying to keep people honest. If anyone can think of a reason why we should do such things please try to convince me.
