More Consumer Reports rants

A local dealer is advertising P2s for $20,700, but that is a great price for the PIP, which is equipped like a P3. I probably would have bought one if I could have gotten one at that price.

 

There is a Roth 401k where you contribute using after tax money. You don't pay taxes when you draw it out and the same contribution limits as a 401k apply. I felt it was easier on my budget to save more in a regular 401k with pretax money so I never took advantage of it. I do have a regular Roth IRA though. The advantage of a Roth is the growth on your money is not taxed.

 

After TTL, that P2 ends up costing $23K for my area.

 

Se-riously,

Isn't TTL around 10% for your neck of the woods ?
If you paid under 22k USD after TTL, that means under $20k USD before TTL.

That is the most astonishing deal I have heard of.

 

Yes, but the poster was talking about having $200-$300K of PRE-TAX income and paying zero on it. So any money contributed to Roth wouldn't reduce tax liability on that income at all.

But he's since explained he is a professional that practices under a corporation. So technically his income stays in his corporation, and plowed into his corporation's "defined benefit plan" - essentially the old school pension upon retirement. His personal income would be subject to how much in distributions he pays himself. Being familiar with physician practices, this is not an unusual thing, but clearly not available to the vast majority of taxpayers. I've also seen some very questionable practices (e.g., the professional corporation pays for personal automobile, that imputed income not being claimed on the personal return). But if one lives modestly and piles corporate profits into a pension, it's entirely plausible and legal to do so.

 

Yes. TTL is around 10%. Note that you pay TTL based on the sales price of the car, and then all the rebates, etc. are subtracted thereafter. Net result was under $22K after everything.

 

If Consumer Reports had a reasonable grasp of statistics, it wouldn't be reporting data from an insufficient sample size. It also wouldn't be using data from voluntary submissions. Such pseudo-scientific polling may be fun, but it has no actual value.

 

The average person who works for a paycheck does not want a PiP.

You are quite right in saying that money tax sheltered by using retirement plans is not available for immediate use. This is why I have been saying that my specific case also includes a modest lifestyle, no debt, and other post-tax savings that I can use as required.

 

As I said, a common enough setup, and far from "unique." Not just for physicians though by any means. Any small business has the options I have chosen, and although much less common than a couple decades ago, high value employees are still offered defined benefit plans by companies; and of course government employees still typically have pension plans.

Is a pension contribution income ? Well, there is the IRS answer; and then there is the practical answer that says that money I save in a 401k or a DB plan is exactly the same to me. Since people say "I made X dollars, but put Y dollars into a 401k," I say "I made Z dollars, and put Q dollars into tax sheltered retirement plans." It does confuse the ignorantii, but that is not my problem.

A professional corp that tries to defraud the IRS over a car is being stupid. I profit handsomely by buying a Prius and and deducting my business miles as a corporation expense. For 2014 I think the per diem rate is 56.5 cents a mile. For me that works out to be about 20 cents a mile in avoided marginal * taxes. I piled up quite a few business miles these past 2.5 years and far exceeded a standard tax depreciation schedule.

*By marginal I mean the tax rate I would otherwise pay. In this case it is AFTER all other tax deductions and non-refundable tax credits have been taken.

 

Yeah...

The average US paycheck is somewhere around $40k, and they are not EE or top flight CS/programmers. There is no "may" about it LOL

 

i suppose the salesmen steer them away from the pip because the commissions are lower. does a car salesman have any other motivation? it's not because they feel it's not a good value for the buyer, that's for sure.

 

I'm more inclined to guess poor sell rate, and more time 'wasted.' I also suspect the salesperson does not know the car very well. All that comes down to money, but not the commission amount per se.

 

from my experiences, the salesmen don't know any hybrids 'well'.

 

I can top that. From my experience, car salespeople do not know cars 'well.' Period.

They do feel obliged however to dictate the conversation with brochure type information and BS. Prius has been around long enough for them to do *that* at least. I can just imagine the sales dweeb saying "the PiP gets 105 MPGe" (or whatever the exact number is) and then crossing his fingers that the customer does not then say "Wth is THAT ?! "

Or saying "The car goes around 10 miles on electricity, and then is a regular Prius." I'm sure the sales dweeb just *hates* the look of abject apathy many a customer gives. It is just not within their ability to ask a couple simple questions how a customer uses a car as a daily driver and calculate a liquid MPG. Too bad really, since that is where the car shines.

PiP is a victim of American inability to perform mental arithmetic.

 

agreed. good thing we have dianne to fall back on! (not literally di )

 

No doubt.

I never wished to suggest otherwise. My point all along has only been that it is hard to gauge what fraction of seriously interested *EV lookers or buyers are eligible for part or all of the tax credit.

It is non-obvious at first glance that people with top 5% incomes would have considerably smaller monthly budgets (and therefore less requirement for salaried taxable income) than the top decile of America, but these are the families that are more likely to not have any debt repayment obligations, can self-insure to a large degree and have savings or low tax investment income for one-off expenses.