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Even More Collateral Damage From Cash for Clunkers: State Revenues Drop

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  • Even More Collateral Damage From Cash for Clunkers: State Revenues Drop

    http://www.bangshift.com/blog/Even-M...nues-Drop.html

  • #2
    Re: Even More Collateral Damage From Cash for Clunkers: State Revenues Drop

    overtaxation kills revenues due to slower economic activity and higher unemployment

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    • #3
      Re: Even More Collateral Damage From Cash for Clunkers: State Revenues Drop

      It should end up being a net loss because:

      1. Loss of some licensing revenues (you don't need license plates for cars that are destroyed)

      2. Sales shifted to cheaper "economy" models (lower sales taxes)

      3. Reduced fuel taxes (assuming that the C4C cars actually save fuel over what would have happened anyway in the not-so-free market*)

      4. Unemployment benefits paid out to former dealership personnel, mechanics, and used car market support business workersduring the post-C4C "depression."

      5. Lower sales taxes on reduced sales of auto parts, tires and services (vehicles that are crushed aren't repaired).

      6. Loss of sales taxes on the sales of the crushed cars (some of them probably would have changed hands several times).


      *If there were really a free market for new automobiles, Ford would be able to produce as many Shelby GT500s, Boss 429s, and large RWD V8 sedans as the market demanded without worrying about CAFE and EPA GHG effects. As it is now, supplies are necessarily limited (or non-existent in the case of big-block V8s) and massive price gouging is now an institution.

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      • #4
        Re: Even More Collateral Damage From Cash for Clunkers: State Revenues Drop

        I think some sharper folks predicted these items, but Congress wouldn't have understood or cared.
        I hope it never happens again.
        Act your age, not your shoe size. - Prince

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