Friday, August 6, 2010

As a majority owner of GM I want to know why is the Volt getting a $7,500 tax credit

The Chevy Volt, thanks to the lobbying efforts of GM (full disclosure: I am part of a group of about 300 million who own 61% of the company), has a $7,500 tax credit attached to each car. This is supposedly to encourage people to buy a $41,000 sedan that is pretty average except for the amazing drivetrain. But according to the NY Times dealers are now expecting a minimum of $5,000 mark-ups and potentially as high as $20,000 when the car goes on sale this fall.

As a majority owner of GM, I (on behalf of the American people) find this outrageous. If the market can support a large mark-up from dealers then there is no reason to offer a tax credit. This is just rent seeking by dealers, and we shouldn't subsidize anything if it is already priced below market demand. If only I knew who to complain to in this company I own a piece of.

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