Ongoing General Automotive Thread 2.0

[edslunch]

Originally Posted by chedder

Exactly. And for a lot of people it's all about the monthly payment. Not to mention corporate leases etc. Owning a $100,000 car does not mean you're wealthy.

Forget about wealthy or not - that’s always going to be subjective. Whether you can afford it comfortably or not, buying a car that is 2, 3, or 4 times what a basic everyday car costs is the definition of a luxury purchase to me. Do you spend 2-4 times on your steaks, your clothes, your wine, your vacations….if so those are all luxury purchases.

[Erick Estrada]

Originally Posted by Enoch Root

The other issue with this randomly chosen tax is that it will inhibit the purchase of EVS. EVs are still quite a bit more expensive than ICE vehicles, and a large number of the nicer ones are greater than $100k (including some pickups, like Rivian)

For all the talk about banning ICE sales by 2035 the government surely has to realize that the current rate of adoption in Canada is not remotely close to making that feasible. The EV incentives right now are a joke. I'm not going to go down to a Nissan Leaf and I'm also not going to R&D a Tesla for Elon unless it's discounted.

[Scroopy Noopers]

Originally Posted by edslunch

Forget about wealthy or not - that’s always going to be subjective. Whether you can afford it comfortably or not, buying a car that is 2, 3, or 4 times what a basic everyday car costs is the definition of a luxury purchase to me. Do you spend 2-4 times on your steaks, your clothes, your wine, your vacations….if so those are all luxury purchases.

Yeah I don’t know enough about taxes to know if this idea is worth it or not (gut says no). So I don’t have an opinion on that at all. But I don’t know what planet you’d have to be from to not understand that a $100,000 vehicle is a luxury item. It is. Even by definition. It absolutely is.

[Enoch Root]

What about bicycles?

If a decent bike can be purchased for a few hundred dollars, then surely a $1,500 bike is a luxury that deserves an extra tax, no?

The point is: applying the tax only to vehicles is ridiculous. Unless you are going to try and apply a luxury tax across the board (i.e. to steaks, clothes, wine and everything else) it's entirely arbitrary, and completely unjustifiable.

[Enoch Root]

In other words, just raise the rate of the GST/PST/HST. At least that is fair to all industries. And to all people - the more you spend, the more tax you pay

[Sliver]

Originally Posted by Enoch Root

In other words, just raise the rate of the GST/PST/HST. At least that is fair to all industries. And to all people - the more you spend, the more tax you pay

But that can be too onerous on lower-income people.

I don't get the aversion to luxury taxes. They seem reasonable. I'm also in favour of raising income taxes on higher-income earners, too.

But we tax individual things over and above basic tax rates already, don't we? Cigarettes, fuel, alcohol, tires, hotel rooms, etc. A luxury tax on extremely expensive cars ($100k is very expensive...come on) seems fine.

And what's the damage, anyway? Will a guy who wants some fancy Bentley not buy a Continental and instead buy a watch or a boat because of this tax? I don't think so. I think people will buy these luxury cars regardless of the tax.

I get that it won't make a big difference to anything, but the spread between haves and have-nots is getting way too wide and over $100k seems generous to me. You can get a lot of car for under $100k and not even worry about this tax.

[speede5]

Originally Posted by Enoch Root

What about bicycles?

If a decent bike can be purchased for a few hundred dollars, then surely a $1,500 bike is a luxury that deserves an extra tax, no?

The point is: applying the tax only to vehicles is ridiculous. Unless you are going to try and apply a luxury tax across the board (i.e. to steaks, clothes, wine and everything else) it's entirely arbitrary, and completely unjustifiable.

The only reason they are doing it is because the items being taxed will most likely be registered in a government system that allows easy tracking and taxing. Same reason they tax used cars here in SK, because everyone has to go to their government agency and register them.

A lot hard to do with watches, clothes or other items.

It' easy low hanging fruit and since the majority don't own a +100K vehicle they don't get massive kickback.

A diesel truck can top 100k in a hurry and most gas trucks are over 60k. Is it a luxury when you need it for work or your business? 100K is not going to be a luxury benchmark for long.

[powderjunkie]

Originally Posted by Enoch Root

What about bicycles?

If a decent bike can be purchased for a few hundred dollars, then surely a $1,500 bike is a luxury that deserves an extra tax, no?

The point is: applying the tax only to vehicles is ridiculous. Unless you are going to try and apply a luxury tax across the board (i.e. to steaks, clothes, wine and everything else) it's entirely arbitrary, and completely unjustifiable.

If we want to do bike to car comparisons, I'd say:

$400 bike = base Hyundai Accent
$700 bike = base Honda Civic
$1000 bike = mid trim CRV
$1500 bike = mid trim 4Runner

$100k equivalent would be at least $3000.

I wonder what the sales numbers are of $3k + bikes vs. $100k autos...I suspect a lot more of the latter. Cars (and boats, RVs, etc. )are a purchase that already involve red-tape, so it makes sense from an implementation standpoint.

[powderjunkie]

Originally Posted by speede5

The only reason they are doing it is because the items being taxed will most likely be registered in a government system that allows easy tracking and taxing. Same reason they tax used cars here in SK, because everyone has to go to their government agency and register them.

A lot hard to do with watches, clothes or other items.

It' easy low hanging fruit and since the majority don't own a +100K vehicle they don't get massive kickback.

A diesel truck can top 100k in a hurry and most gas trucks are over 60k. Is it a luxury when you need it for work or your business? 100K is not going to be a luxury benchmark for long.

IMO taxes on any used products are ridiculous. I'm not even a fan of 'service' tax...I'd prefer a much higher 'goods' tax and limited/no service taxes.

At least work related vehicles can theoretically pass the cost on to the consumer (which isn't ideal in the grand scheme). It isn't much different than any other business expense decision...you direct your money where it helps you generate the best return...maybe that means replacing your dually a little less often, or buying used.

At least in the case of a work truck, I can't imagine many cases where it would make you less competitive in the wider world

[PepsiFree]

This whole $100k conversation is bonkers. Of course it's luxury, are you guys serious?

Go check out the Ford dealerships. They have a whopping 1 vehicle (Mustang Shelby GT500) over $100k... out of over 100 vehicles.

Go take a look at Mercedes, a luxury brand. 13/39 top $100k. That's not even half.

Big 4 offers zero vehicles over $100k with a whopping 3/225 over $90k.

I know CP is the land of six-figure double-meaters, but suggesting $100k is not a luxury vehicle is completely out of touch. "Is it a luxury when you need it for work?" uh yeah, because you do not need a $100k personal vehicle for work, you just want one... it's a luxury.

[TorqueDog]

^The hell? No one is saying it isn't a luxury item, but 1%-ers aren't the only people who purchase luxury goods. All you're doing is making it harder for someone who isn't already to buy themselves something nice. The 1%-er isn't going to give a crap, they're buying what they want, and they'll buy and import it if they're that bothered about the luxury tax.

[burn_this_city]

So long as its indexed to inflation and moves up over time I think its a reasonable cutoff level. The top 10% has taken the majority of the gains in the last 30 years.

This stuff is sensible policy, and we're still paying less than basically every country except the US. German cars in EU countries and places like Singapore are multiples more expensive than here, for the exact same vehicle.

20% over 100k will mostly affect the top of the professional managerial class. Does your VP/CEO really need a break on his luxury purchase?

[CorsiHockeyLeague]

There are two meanings for the word "luxury" when it comes to an automobile - the "it's a luxury" in the sense that it's not a necessity, but a "nice to have", and then the type of vehicle that is a luxury vehicle - i.e., designed for quiet, comfort, class, the sense of luxuriousness. Speaking of Ford, you're actually wrong - the Ford GT is over 100K, it's actually five times that, but it's not a luxury vehicle in the latter sense of the word. It's one of the least luxurious experiences you could have driving a car.

In any case, what counts as an "expensive" car is always going to be relative, but 100k seems like a pretty reasonable barrier. I'm a car nut and I've never spent close to 100k on a car. Maybe someday I will, but I kind of doubt it, and if I ever do it won't be more than once.

[powderjunkie]

Originally Posted by TorqueDog

^The hell? No one is saying it isn't a luxury item, but 1%-ers aren't the only people who purchase luxury goods. All you're doing is making it harder for someone who isn't already to buy themselves something nice. The 1%-er isn't going to give a crap, they're buying what they want, and they'll buy and import it if they're that bothered about the luxury tax.

Ok, the top 5%. We can afford to pay more [if it's that important to us].

This is a simple, relatively gentle force on certain consumer decisions. Not much different than the price of many commodities [which can be heavily influenced by political decisions].


Perfect doesn't need to be the enemy of good. Perhaps there are other areas this could apply: any wine or liquor over $100? Maybe with an exemption to local products (if possible given trade agreements).

[PepsiFree]

Originally Posted by TorqueDog

^The hell? No one is saying it isn't a luxury item, but 1%-ers aren't the only people who purchase luxury goods. All you're doing is making it harder for someone who isn't already to buy themselves something nice. The 1%-er isn't going to give a crap, they're buying what they want, and they'll buy and import it if they're that bothered about the luxury tax.

How much more difficult is it for someone to buy a car that costs $110,000 + GST vs. $110,000 + GST + $2000?

Really? For this hypothetical car guy who has saved for this $110,000 purchase, an extra $2000 is going to crush his dreams?

[Enoch Root]

Originally Posted by powderjunkie

Ok, the top 5%. We can afford to pay more [if it's that important to us].

This is a simple, relatively gentle force on certain consumer decisions. Not much different than the price of many commodities [which can be heavily influenced by political decisions].


Perfect doesn't need to be the enemy of good. Perhaps there are other areas this could apply: any wine or liquor over $100? Maybe with an exemption to local products (if possible given trade agreements).

This is precisely the problem, and why the GST was instituted in teh first place. It used to be the case that there were tariffs and taxes on individual items, all different, and none of it fair, or easy to track. One of the primary benefits of a general sales tax, is that it is easily implemented across all industries, and is fair (all industries treated the same.

Originally Posted by powderjunkie

If we want to do bike to car comparisons, I'd say:

$400 bike = base Hyundai Accent
$700 bike = base Honda Civic
$1000 bike = mid trim CRV
$1500 bike = mid trim 4Runner

$100k equivalent would be at least $3000.

I wonder what the sales numbers are of $3k + bikes vs. $100k autos...I suspect a lot more of the latter. Cars (and boats, RVs, etc. )are a purchase that already involve red-tape, so it makes sense from an implementation standpoint.

That's the thing - it is impossible to determine what is a luxury from one product to the next, and no one will agree. Best to have a single standard.

Many of you are probably too young to remember what it was like before the general sales tax - different rules and different tariffs and taxes in every industry.

[Enoch Root]

Originally Posted by PepsiFree

How much more difficult is it for someone to buy a car that costs $110,000 + GST vs. $110,000 + GST + $2000?

Really? For this hypothetical car guy who has saved for this $110,000 purchase, an extra $2000 is going to crush his dreams?

So that's how we should build a tax system? "As long as it doesn't crush his dreams"

[PepsiFree]

Originally Posted by Enoch Root

So that's how we should build a tax system? "As long as it doesn't crush his dreams"

Not at all, just responding to the notion that this somehow really just hurts the little guy buying his $100k+ vehicle.

I've shared my general feelings over an ideal tax system in my view before, but this doesn't particularly seem like the thread to rehash it (but for the record, taxes like this would not be part of that ideal).

[puckedoff]

What about the single moms, Pepsi? Are you going to tell them that after slaving away, just scraping by working two jobs and taking care of their kid that the money they have been saving for their Bugatti isn't going to be enough?

[powderjunkie]

Originally Posted by Enoch Root

This is precisely the problem, and why the GST was instituted in teh first place. It used to be the case that there were tariffs and taxes on individual items, all different, and none of it fair, or easy to track. One of the primary benefits of a general sales tax, is that it is easily implemented across all industries, and is fair (all industries treated the same.


That's the thing - it is impossible to determine what is a luxury from one product to the next, and no one will agree. Best to have a single standard.

Many of you are probably too young to remember what it was like before the general sales tax - different rules and different tariffs and taxes in every industry.

Sure...but maybe the best answer is actually somewhere in the middle, and there are certain products/services that should be treated a little differently and that can be done easily (e.g. liquor, fuel, etc.).

We should keep things relatively simple, but it doesn't mean there isn't room for tweaks. IMO the list of GST exempt things could be longer while vice/luxury taxes could be a bit more severe...