Colorado is offering residents an extra $6,000 rebate for driving new electric vehicles through the Vehicle Exchange Colorado Program.
What a wonderful idea. If my state was doing this I would have a 73 Jeep CJ5 to donate. 
Andy
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What are they going to do with the used cars?
DB2
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Good question Bob. I suspect crush them and recycle but I canât say for sure. Remember that trade for clunkers that Obama had? I remember a lot of my friends who were conservatives were complaining about that and how government couldnât afford it, all while they drove their vehicles down to take advantage of the program.
Andy
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Soooo, what keeps someone from simply going out and buying a $3000 (or less) clunker to turn in for the purposes of this free money?
It wonât be anywhere near as popular as you think. Thatâs because there is a caveat to the rule that says -
âCertain income-related qualifications limit who can access the program. Your householdâs income must be under 80 percent of your areaâs median income. This is because the program specifically targets lower-income drivers, as opposed to people who can already afford to drive EVs.â
Someone early retired that can manage their annual taxable income might be able to avail themselves of this âfree moneyâ in the year they purchase an EV, but the typical middle-class EV buyer will not.
Before I read that part, I thought there will suddenly be huge demand for 20+ year old junkers worth $1k- in CO.
For someone who qualifies, itâs almost a no-brainer to buy a $1k junker and trade it in for $6,000 âcashâ. Or for those buyers who have no cash, a dealer to arrange to front the $1k for a fee. A $5k profit leaves room for lots of fees when necessary.
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Ahh an arbitrage move, nice Hawkwin. That might be a great business. Start a used car lot, buy old vehicles, give them to the state, make 50 percent.
Andy
Or someone like Mike Johnson the Speaker of the House, or anyone else that might have a trust fund.
Andy
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- His W2 has at least $174,000 of income on it, so that disqualifies him income-wise. This applies to all members of Congress.
- Heâs a resident of LA, not CO.
Most people with trust funds typically have income flowing to them from the trust. In some cases it might meet the income requirement, but that would only be for relatively small trusts. Usually the cost of setting up such a trust precludes such small ones, so most âpeople with trust fundsâ would also likely not meet the income requirement for this program. There may be some people who have trust funds that havenât started distributing anything, for example, those that have a starting age. Those types might qualify. But these would be tiny numbers. So there likely wonât be a huge demand for junkers in CO anytime soon.
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The original CFC indirect handout to the automakers required the âclunkerâ traded in had to be owned for at least a year, or something like that, to prevent people buying up beaters from junkyards and towing them in.
Steve
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Have you seen his W2?
Andy
Likely not of course. But his salary as a member of Congress is public knowledge, correct?
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Right but if he shelters it in some format who would know. It has been stated he doesnât have a checking or savings account.
Andy
To me, any politician who is shielding financial data cannot be trusted. (Iâm also looking at you, former guyâŚ)
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The only means of sheltering income on a W2 for a congress critter would be items available via payroll deduction. That is going to be mostly Thrift Savings, insurance, etc. That likely means that his W2 still has a number in excess of 100k for taxable income.
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What if he gave his entire paycheck to a charity and only accepted 1 dollar? I am not saying this is possible, because I am not a tax expert, but it seems plausible. @aj485
Andy
While tax deductible, CFC deductions are not pre-tax. Federal law does not allow for charitable donations through payroll deduction (CFC or any other payroll deduction program) to be done pre-tax.
In other words, his W2 would still reflect it as income even if his tax return does not.
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Nope. Charitable giving is a Schedule A deduction, which is accounted for after AGI, but before taxable income. The Federal program, which, from what I can tell, the Colorado program seems to be based on, uses AGI, not taxable income. Additionally, charitable deductions are limited, generally either to 30% or 50% of AGI, depending on circumstances, so to be able to deduct the entire amount that shows on his W-2, he would have to have at least that amount of other income that counted toward his AGI.
I suppose, with a lot of maneuvering, he might be able to set up a way to disclaim the income or have it sent directly to the charity, but that would probably be difficult to do and still keep other benefits, like retirement and insurance. And after paying for lawyers and trustees, it would probably cost a lot more than an EV credit would buy him.
AJ
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I canât find the link at the moment, but apparently his staff responded to the reporting by stating that he does have a banking account, but it does not pay interest - and therefore does not need to be reported as part of his financial disclosures.
Which is itâs own sort of weird, that a man in his 50âs with a family would have no savings or investments that provide any rate of returnâŚbut itâs less implausible than the idea that a man earning close to $200K could be completely unbanked.
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Didnât the feds do this a while back. When auto companies were facing bankruptcy.
To keep the cars turned in from being sold, they poured sodium silicate (water glass) into the engine air intake while the engine ran. This froze the block solidâimmediately. Reducing the vehicle to scrap metal.
They do know how. Much faster than sweetening your gas mileage by adding sugar to the gas tank.
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Not exactly. The car makers didnât ask for government assistance because of financial issues until Nov, 2008. The Energy Policy Act of 2005 offered credits for hybrid vehicles and in 2007, credits were expanded to include plug in vehicles - hybrid and full electric. Since then, the credits have morphed a few more times into the current incentives, which run from 2023 to 2032.
AJ