I recieved an email this morning that I found fantastic. I have been trying to explain why I believe of our administration has made poor choices and decisions for the American people but will admit I may have tried too hard to oversimplify it.
Here in all of it's glory is a very entertaining, simple to understand way to explain how WELL our present administration can manipulate math facts to make them sound much better than thy really are and the fact that sugar-coating them without giving them those facts is so digestible to the Americvan people. Enjoy!
If you traded in a clunker worth $3500, you get $4500 Off for an apparent "savings" of $1000.
However, you have to pay taxes on the $4500 come April 15th (something that no autoDealer will tell you). If you are in the 30%Tax bracket, you will pay $1350 on that $4500.
So, rather than save $1000, you actually pay anExtra $350 to the feds. In addition, youTraded in a car that was most likely paid for. NowYou have 4 or 5 years of payments on a car that you did not need,That was costing you less to run than the payments that you will nowBe making.
But wait, it gets even better:You also got ripped off by the dealer. For example, every dealer here in LA was sellingThe Ford Focus with all the goodies including=2 0A/C, auto transmission,Power windows, etc for $12,500 the month before the "cash forClunkers" program started.
When "cash for clunkers" came along, theyStopped discounting them and instead sold them at theList price of $15,500. So, you paid $3000More than you would have the month before. (Honda, Toyota, and Kia played the same list price game That Ford and Chevy did).
So lets do the final tally here:You traded in a car worth: $3500
You got a discount of: $4500
Net so far +$1000
But you have to pay:
$1350 in taxes on the $4500
Net so far: -$350And you paid:
$3000 more than the car was selling forThe month before
We could also add in the additional taxes (salesTax, state tax, etc.) on the extra $3000 that you paid for the car,Along with the 5 year s of interest on the car loan but lets just stop here.
So who actually made out on the deal? The feds collected taxes on the car along with taxes on the $4500They "gave" you. The car dealers made anExtra $3000 or more on every car they sold along with the kickbacksFrom the manufacturers and the loanCompanies.
The manufacturers got to dump lots of cars theyCould not give away the month before. And the poorStupid consumer got saddled with even more debt that they cannot afford.
Obama and his band of merry men convinced JoeConsumer that he was getting $4500 in "free" money from the"government" when in fact Joe was giving away his $3500 car and paying anAdditional $3350 for the privilege.