Monday, October 19, 2009

"Is that about the coolest thing you've ever heard?"

Where is another example of why the Federal Government should never be allowed to spend our money. This is a story from the Wall Street Journal published on 10/17/09:

http://online.wsj.com/article/SB10001424052748704107204574473724099542430.html

The details of this fiasco would once again be funny if not for the fact that we are paying for this nonsense:

  • We thought cash for clunkers was the ultimate waste of taxpayer money, but as usual we were too optimistic. Thanks to the federal tax credit to buy high-mileage cars that was part of President Obama's stimulus plan, Uncle Sam is now paying Americans to buy that great necessity of modern life, the golf cart.
  • The federal credit provides from $4,200 to $5,500 for the purchase of an electric vehicle, and when it is combined with similar incentive plans in many states the tax credits can pay for nearly the entire cost of a golf cart. Even in states that don't have their own tax rebate plans, the federal credit is generous enough to pay for half or even two-thirds of the average sticker price of a cart, which is typically in the range of $8,000 to $10,000. "The purchase of some models could be absolutely free," Roger Gaddis of Ada Electric Cars in Oklahoma said earlier this year. "Is that about the coolest thing you've ever heard?"
  • The golf-cart boom has followed an IRS ruling that golf carts qualify for the electric-car credit as long as they are also road worthy. These qualifying golf carts are essentially the same as normal golf carts save for adding some safety features, such as side and rearview mirrors and three-point seat belts. They typically can go 15 to 25 miles per hour.
  • This golf-cart fiasco perfectly illustrates tax policy in the age of Obama, when politicians dole out credits and loopholes for everything from plug-in cars to fuel efficient appliances, home insulation and vitamins. Democrats then insist that to pay for these absurdities they have no choice but to raise tax rates on other things—like work and investment—that aren't politically in vogue. If this keeps up, it'll soon make more sense to retire and play golf than work for living.
It is easy to attribute this policy to “unintended consequences” from a large federal spending program. I think that some research would lead to a different conclusion. I believe that the wording of this federal law was intentionally vague so that those who were positioned to gain from the sale of these vehicles would directly benefit from this legislation.
Imagine the “unintended consequences” that have been inserted into the 1,500 page health care legislation.

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