Ongoing General Automotive Thread 2.0

[btimbit]

I'm ok with a luxury tax but 100k is way too low

[bizaro86]

Originally Posted by TorqueDog

"The rich" and "people who can spend >$100k on a car" aren't mutually inclusive. I most certainly would not consider myself 'rich'.

Depends on the definition of rich you use. For most people a rich person is "someone with way more money than me." A definition which is constant in basically all income brackets. The 1% in Canada starts at $245k income. After taxes I'd guess you wouldn't want to make too much less than that and be buying a $100k car.

This would certainly be a tax on at most the top few percent.

[Sliver]

Originally Posted by TorqueDog

"The rich" and "people who can spend >$100k on a car" aren't mutually inclusive. I most certainly would not consider myself 'rich'.

Isn't that what literally every rich person says, though? Like, you're not rich, but you're comfortable?

I think you do need to be pretty well off to buy a $100k car and a tax on luxuries is not the worst idea.

[Hemi-Cuda]

Originally Posted by Sliver

Isn't that what literally every rich person says, though? Like, you're not rich, but you're comfortable?

I think you do need to be pretty well off to buy a $100k car and a tax on luxuries is not the worst idea.

Ya if you have the ability to spend over $100k on a car and don't consider yourself wealthy, then you're quite out of touch

[nik-]

It's just populism. Lets be honest about it. It sounds good to most people and doesn't actually do much of anything.

A family with two earners making 100k a year could finance a 100k car and I wouldn't consider that wealthy.

[Bill Bumface]

Some people in this thread need to venture out of their gated community once in a while.

[chedder]

Originally Posted by nik-

It's just populism. Lets be honest about it. It sounds good to most people and doesn't actually do much of anything.

A family with two earners making 100k a year could finance a 100k car and I wouldn't consider that wealthy.

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.

[timun]

For all the $100,000+ car owners and lessees.

[MegaErtz]

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.

Wow, just wow. Alberta.

[chedder]

Originally Posted by MegaErtz

Wow, just wow. Alberta.

What does this have to do with Alberta? I'm sure there are people all over the country with massive car payments on expensive cars that aren't wealthy by any real measure of wealth.

Maybe the addition of the wealth tax will keep some of these people from over extending themselves. If they really can afford it, yeah, they're likely wealthy.

[GGG]

Originally Posted by nik-

It's just populism. Lets be honest about it. It sounds good to most people and doesn't actually do much of anything.

A family with two earners making 100k a year could finance a 100k car and I wouldn't consider that wealthy.

You aren’t taxing with a wealth tax because the person buying it is wealthy. Your taxing it because in a choice between taxing general income, groceries, transportation in general, or luxury cars twice as expensive as the functionally equivalent vehicle you want to choose to tax luxury.

It certainly is a nanny state value judgement but the concept isn’t to tax the wealthy it’s to tax excess.

The other thing is that the tax is relatively meaningless in terms of decision making. If I buy a 150k car today with tax is 157500. With the luxury tax it’s 167500. If that changes my decision to buy or not I probably shouldn’t be buying a 150k car. A 120k car only has a 4K luxury tax on it.

[Scroopy Noopers]

I don’t know a single person in real life with a $100,000 car.

[Erick Estrada]

Originally Posted by GGG

You aren’t taxing with a wealth tax because the person buying it is wealthy. Your taxing it because in a choice between taxing general income, groceries, transportation in general, or luxury cars twice as expensive as the functionally equivalent vehicle you want to choose to tax luxury.

It certainly is a nanny state value judgement but the concept isn’t to tax the wealthy it’s to tax excess.

The other thing is that the tax is relatively meaningless in terms of decision making. If I buy a 150k car today with tax is 157500. With the luxury tax it’s 167500. If that changes my decision to buy or not I probably shouldn’t be buying a 150k car. A 120k car only has a 4K luxury tax on it.

I think you are oversimplifying things here. Maybe a multimillionaire doesn't care about paying $16.8k tax on a $150k car but if a $150k car is your comfortable max you are all of a sudden reconsidering that purchase and looking at something lower cost. I know a lot of wealthy people that are cheap and do not like to spend a penny more on anything than they have to and many are especially adverse to paying excess taxes. It's just like dealer admin charges as I simply won't pay them for any car even if it's $1k I will walk away as I won't pay over MSRP for a vehicle. These taxes are kind of like Government admin charges. If anything this tax is more of a punishment to luxury automobile dealers as they will simply sell less of their premium models.

[Erick Estrada]

Originally Posted by Scroopy Noopers

I don’t know a single person in real life with a $100,000 car.

If you have a decent sized circle of acquaintances you probably do as plenty of the full size German SUV's can get that high. Heck even some pickup trucks can get dangerously close.

[GGG]

Originally Posted by Erick Estrada

I think you are oversimplifying things here. Maybe a multimillionaire doesn't care about paying $16.8k tax on a $150k car but if a $150k car is your comfortable max you are all of a sudden reconsidering that purchase and looking at something lower cost. I know a lot of wealthy people that are cheap and do not like to spend a penny more on anything than they have to and many are especially adverse to paying excess taxes. It's just like dealer admin charges as I simply won't pay them for any car even if it's $1k I will walk away as I won't pay over MSRP for a vehicle. These taxes are kind of like Government admin charges. If anything this tax is more of a punishment to luxury automobile dealers as they will simply sell less of their premium models.

What a person wants to pay and their ability to pay are two different things.

If the difference between 150k and 160k is affordability then you probably shouldn’t be buying the vehicle.

[bagofpucks]

I assume this applies to trucks as well? There are a lot of >$100K trucks driving around the city for sure and most one tonne trucks are right around $100K too.

In general, I agree with luxury consumption taxes, but one issue I see is what about families that have one beater and one luxury vehicle by choice? We have two newer vehicles that combined would be over $100K, but I could definitely could have seen us getting one $10K kid hauler and one over $100K vehicle. Doesn’t make sense to me that we would be taxed differently depending on that choice. Or if we decided we only needed one vehicle and one of us was going to take transit.

[Scroopy Noopers]

Originally Posted by Erick Estrada

If you have a decent sized circle of acquaintances you probably do as plenty of the full size German SUV's can get that high. Heck even some pickup trucks can get dangerously close.

I am also familiar with what vehicles cost $100,000. I don’t know anyone who has one.

[TorqueDog]

Originally Posted by bizaro86

Depends on the definition of rich you use. For most people a rich person is "someone with way more money than me." A definition which is constant in basically all income brackets.

That's what I'm guessing is going on here, because people in this thread are setting waaaaay too low a bar on what would be considered 'rich' and using kind of a silly yardstick for defining it.

"Well off" vs "wealthy" vs "rich" all have different meanings, and to me give off very different impressions of a person's financial standing. "Well off" is doing well, living comfortably and not worried about money while also not rolling in it. You could be 'well off' at various income levels, given cost-of-living in your city, living arrangements, ability to save and plan your finances, etc. Someone who is 'well off' could reasonably acquire a car worth +$100k, but it would be a big deal and it would be something they worked really hard over a period of time to achieve.

Rich is the high-income earner, that kind of 1% yearly compensation amount you mentioned.

Wealthy is 'f-ck off' money; you don't have to work, your money makes you money. That's wealthy.

[Enoch Root]

People's personal definition of 'rich' is irrelevant.

The problem with a luxury tax like this is that it creates unlevel playing fields. Why cars over $100,000? Why not watches over $10,000? Or boats? Or homes over $1M?

Imagine you own a car dealership, or sell cars for a living? Suddenly the inequity becomes apparent. It is taxing one commodity, and not others, which unfairly penalizes that one business.

Sales tax is a good tax, because the more you spend, the more you pay - it's fair. Income tax, on the other hand, isn't always fair, because there are ways to defer income, and some people pay none at all.

Taxes need to be fair, and at lest somewhat universal. Taxing specific items, such as automobiles over $100K, is anything but fair or universal.

[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)