In addition to the amazing analysis below, you as an American taxpayer

need to know that the entire Cash for

Clunkers program dished out 2.1

billion to auto dealers all over the country, but the administration

of the program cost an additional whopping 2.6 billion for a grand

total of 4.7 Billion dollars. America wake up!! This is Fascism, pure and

simple and it's costing us our country’s treasure, our children's

futures and our freedoms.

 

Subject: The

Clunker Story

Ignore all the fuel savings, etc and just look at how the car buyer

got taken to the cleaners: 

If you traded in a

clunker worth $3500, you get $4500 off for an

apparent "savings" of $1000. That is, you could have gotten $3,500 if

you had just traded the car in. So you just really are $1,000 ahead at this point.

However, you have to pay taxes on the $4500 come April 15th (something

that no auto dealer 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 an extra $350 to the

feds. In addition, you traded in a car that was most likely paid for.

Now you 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 now be making.

 But wait, it gets even better: you also got ripped off by the dealer.

For example, every dealer here in LA was selling the Ford Focus with

all the goodies including A/C, auto transmission, power windows, etc

for $12,500 the month before the "cash for

clunkers" program started.

When "cash for

clunkers" came along, they stopped discounting them and

instead sold them at the list price of $15,500. So, you paid $3000

more 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: -$350

 

And you paid: $3000 more than the car was selling for the month before

  

Net -$3350

 We could also add in the additional taxes (sales tax, state tax, etc.)

on the extra $3000 that you paid for the car, along with the 5 years

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 $4500 they "gave" you. The car dealers

made an extra $3000 or more on every car they sold along with the

kickbacks from the manufacturers and the loan companies. The

manufacturers got to dump lots of cars they could not give away the

month before. And the poor consumer got saddled with even more debt that they cannot afford.

  

The governments merry men convinced Joe consumer that he was getting

$4500 in "free" money from the "government" when in fact Joe was

giving away his $3500 car and paying an additional $3350 for the privilege.