Cash for Clunkers Disaster page 2
Up to 306 million people did not take advantage of the C.A.R.S. incentive paid for by tax payers, and about 282 million of those paid taxes (according to recent unemployment figures of 24,700,000 unemployed or underemployed Americans). Any program that discriminates against so many people while taking their money is an unfair program. It’s not okay for over 281.3 million people to be asked to subsidize 700,000, simply because those 700,000 made small tax contributions, too. That’s an unfair burden to the rest of us to fill a nonessential need for a few.
The Liberal mantra of caring for the poor or caring for the environment ignores the facts surrounding the C.A.R.S. program.
The destruction of old vehicles means the poor will have fewer affordable vehicles available in their price range. The availability of used junkyard parts has declined through planned destruction, which forces up the cost of the limited on-hand supply. This forces the poor to pay more to keep their older vehicles operational, or to face the obsolescence of an otherwise satisfactorily operational vehicle.
And then there are the costs to the typically poorer buyers of financing the balance of the price of the new cars. Financially less able buyers were strapped into loan paybacks for cars whose prices dealers didn’t budge on because buyers were happy to get free money over true market value for their trade-ins. These buyers traded in cars that were most likely paid for so that the participants could take on new debt. It’s probable that the attractive car loans (minus the need to finance the $3500 to 4500 knocked off the purchase price), like the mortgages that prospective but financially ill-equipped homebuyers couldn’t afford, which brought on the mortgage crisis, will be defaulted in record numbers, increasing the costs to the dealerships and lending banks to repo and resell the vehicles in a down market.
If you traded in a clunker worth $3500, and got $4500 off for a new car, you have an apparent savings of $1000. However, you have to pay taxes on the $4500 in April. Those few in the 30% tax bracket who took advantage of the free cash will pay $1350 on that $4500, actually paying an extra $350 to the feds after having traded in a car that was most likely paid for. Now you have 4 or 5 years of payments on a car that you didn’t need, and you’ve lost a car that was costing you less to run than the payments you’ll now be making. On top of that, the buyer is stuck with sales tax on the inflated sticker price of the new car.
Is the environment really helped? The cars that get 18 MPG and under doesn’t mean those cars pollute the environment more than older engines that get better MPG but smoke like a California forest and go through a quart of oil a week. Some environmentalists are actually opposed to the bill because it takes functioning cars off of the road before their time is up, and does not permit the vouchers to go toward used vehicles on dealer lots, even if they are more fuel-efficient. The rules demand that the newly purchased cars get 22 miles a gallon for a $3,500 rebate -- just four more than the derogatorily named clunker.
Gas guzzlers mean those drivers pay more taxes, regardless of the gas guzzler’s ability to pay for gas, an ability they budgeted when buying the vehicle. I’m not interested in what those owners can or cannot afford. The welfare of strangers isn’t a proper concern for me, and it’s never been my place to make their choices in life my concern.
Then there are the opportunity costs to the poor. There are 3 billion more dollars that won’t go into the education system or applied to home mortgages in consumer aid, or toward any other social program.
| Previous Page | Read more |