Math is hard and hippies are, well, hippies.
Greens like to do things that make them feel good about themselves, whether or not their actions actually do anything meaningful for Gaia, which is why they hate it when pesky facts shatter their planet-saving self image.
Remember Cash for Clunkers? The basic idea was twofold; to take old, polluting cars off the road and replace them with new, shiny green-friendly machines, and secondly to inject life into a struggling auto-industry. $3 billion later, now the event is over, it’s time to reflect on what sort of deal clunker-traders got:
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
Your government at work, in the name of green.
Green Math Part Un is here, featuring the amazing 83-year depreciation of a 20-year asset at Nellis AFB.