Biden’s Child Tax Credit and How to Opt Out

Joe Biden doesn’t believe in tax cuts, but he is willing to mess with your refund and possibly prevent you from getting one.

My introduction to this brazen tampering with taxes was a form letter the I received from the IRS.

You may be eligible to receive advance payments of the Child Tax Credit (CTC) . If you’re eligible for advance CTC payments and want to receive these payments, you don’t need to take any action. You will receive a letter with more details.

The American Rescue Plan, signed into law in March, made important changes to the CTC for most taxpayers in 2021. The credit amounts increased for many taxpayers, and the credit is fully refundable, which means taxpayers can benefit from the credit even if they don’t owe any income taxes. The credit also includes qualifying children who turn age __ in 2021. The American Rescue Plan directs the IRS to make advance monthly payments of half the estimated annual CTC. The IRS will make payments from July through the end of this year.

For tax year 2021, the advance CTC payments will be half of the estimated CTC. The maximum annual CTC will be $3,000 per qualifying child between the ages of 6 and 17, and $3,600 per qualifying child under age 6, at the end of 2021. In general, qualifying children must live with the taxpayer in the United States for more than half the year.

The maximum credit is available to taxpayers with a modified Adjusted Gross Income of:

• $75,000 or less for single taxpayers,

• $112,500 or less for head of household,

• $150,000 or less for married couples filing a joint return and qualifying widow(er)s and• the maximum credit phases out for higher income taxpayers.

If you don’t wish to receive advance CTC payments, instructions on how to unenroll from these payments will be available by the end of June. Please continue to check for additional information about these advance CTC payments.

My first question after why, is what will this do to my taxes when I file on or before April 15th next year?

Folks, the question of whether you wish to participate in this is “dazzle the voters program” is in two parts. First what does the child tax credit do to my taxes? and second, how much will I get?

I took a look at my taxes from last year (2020 tax year). The Child Tax Credit in 2020 was $2,000.

The child tax credit is deducted directly from the amount of taxes that you owe.

Suppose per the tax tables, you owed $15,000 in Federal tax. The child tax credit is deducted directly from this amount. Thus $15K minus $2K is $13K. If you had $13K withheld from your pay, then you’d owe zero in additional taxes.

Biden is doing two things simultaneously with the credit this year. First, he raised the credit from $2K to $3K per child. (I’m omitting the amount for children under 6 in my example.) Then Uncle Joe is going to send you a series of checks between July and December which will total $1,500. The other $1,500 will then be available to deduct from your taxes.

Now I’m going back to my previous example to demonstrate the math.

Taxes per tax table $15K, minus Child Tax Credit of $1,500 is $13.5K. If you had $13K withheld from payroll, then you get to write a check to Uncle Joe for $500 next year. So much for free money. Thus, for every child between 7 and 18 years of age, you get to send in $500 per child to the government, come April 15th next year. So much for free money. Now granted, your mileage may vary but even if you usually get a refund at tax time, you will still get to pay by getting a smaller one or maybe having to pay.

If you are near the top of any of the earning amounts listed in the letter, then you probably better opt out. If you are in the bottom income brackets, then enjoy spending your refund this year instead of getting it next year like you usually do.

Frankly, I think this scheme will bite me in the fiscal butt, so I decided to opt out. Please note that doing so is difficult and time consuming. But I did it. Here is my guide.

Your adventure in opting out begins at IRS.GOV.

On right side, click on Get Answers on the Advance Child Tax Credit

Select Unenroll From Advance Payments

On next screen again click on Unenroll from Advance Payments

And just when you thought you were on your way, you hit a hard stop. You must verify your identity with If you’re like me, you now get to create an account. Folks this process is cumbersome, frustrating, and time consuming.

You begin by entering your email and creating a password.

You then get to select a method of two factor authentication.

Then you need to switch to your phone and then take a photo of the front and back of your driver’s license.

You cannot do this step on a PC even if you already have the photos ready, the program is broken and won’t let you. Instead, asks for your cell phone number and then sends you a text message with an embedded URL in it. It reminds me of the U-Haul self-return process. You can only take live photos of your driver’s license.

After a few tries, you’ll get both sides of your driver’s license uploaded and then you get to take a live selfie with your front facing camera. It checks your face against the photo ID that you submitted. This step is especially buggy.

Plan on 20 minutes to do the process.

At this point, I was then able to return to my desktop PC and completed the process.



Make sure box is checked and click on SUBMIT

Then you get a confirmation screen Unenroll From Receiving Advance Child Tax Credit Payments

Except, if you’re married and file jointly, the opt out process is not complete. Your spouse now gets to do the whole process that you just completed. Yep, when I opted out, I only opted out of half of the automatic payment. In order to truly opt out, my wife now has to go to the IRS site and do everything that I just did.

Folks opting out is painful but for many, I think you will experience more pain on Aril 15th if you don’t.

Sacramento County is Voting on a Sales Tax in 2020

By Chief

Well folks Measure B was defeated in 2016, by the slimmest of margins—talking fractions of a percent here people! So, we were spared from a county-wide sales tax increase, which actually resulted in a decrease believe it or not. Sales tax measures here at the Sacramento County level require a 2/3 vote of all voters to go into effect, I believe it may be different for just local governments.

Editor’s note: the percentage needed for passage of sales taxes depends on whether funds are dedicated which needs 2/3 voter approval or just going to the general fund which requires a simple majority.
Legislative Analyst’s Office

Politicians hate tax decreases, it’s actually one of few bi-partisan things both parties can agree on. William has explained this better than I ever could but in essence: say there is a fund for a new overpass for 20 million. Money has already been set aside, but the general fund is running low due to lower than expected holiday shopping, so a tax hike is proposed to “pay for road condition improvements.” It passes and the government gets more tax revenue. The voter approved money goes into the transportation fund as promised, but since transportation is now fully funded by dedicated funds, other money that was being spent on transportation, is now freed-up and re-directed into the general fund to pay for pet projects. The net result of the tax hike is often that no additional funding increase—in real dollars—ever happened for transportation; money just got freed-up to be spent for other purposes. This bait and switch is a bi-partisan approach because everyone can find a project in their district to direct monies to, and when it’s completed, the elected can nominate himself for sainthood and give voters a reason to re-elect him/her/it. The City of Sacramento actually just did this saying the funds were needed for additional police/fire but re-directed it saying they had a “surplus.” Cities never have surpluses, trust me, it’s called creative accounting.

But I digress. There is a task force, the Sacramento Transportation Authority, made up of 16 elected members of this county (all 5 supervisors) (5 Sac City Councilmembers) (1 member from Folsom, Citrus Heights, Rancho Cordova, Galt/Isleton) and (2 members from Elk Grove). So, in essence, your tax dollars are funding a committee of your electeds to find ways to tax you even more on a countywide basis. To be clear, I have no problem with the mix of elected officials on a board, as they were elected by us the voters; however, I do have a problem with obvious conflicts of interest. Here is a glaring one: Sacramento’s Regional Transit (RT) is the local bus/light rail service in the county and of these “members” look how many reside on the RT board as well: Kennedy/Serna/Nottoli all Sac County Supervisors, Hume (Elk Grove), Howell (Folsom), Miller (Citrus Heights), Hansen/Harris/Schneier (Sac City).

Nine of 16 members sit on both boards. Thus, the Sacramento Transportation Authority has a vested interest in raising the local sales taxes and directing the money to RT which will be given a large slice of this new tax money. While you cannot do much about the supervisors, I find it hard to believe the other cities couldn’t find other city councilmembers to replace them due to a conflict of interest. RT is slated to receive a very large split of this money, I’ve been told upwards of 30%!!! No wonder Regional Transit took over/bought out Transit in Elk Grove and Citrus Heights last year, now they have a monopoly over the transit monies from this tax!

Henry Li—Regional Transit

City and county leaders in Sacramento are in the midst of debating a sales tax measure for the November 2020 ballot that would fund a long list of projects transportation projects, from freeway interchanges and bridges to sidewalks near schools.

Measure A could raise more than $8 billion through a half-cent sales tax over the next 40 years.

The decision to place a measure on the ballot will be made next year by the Sacramento County Board of Supervisors, if the project list is approved in coming weeks by the Sacramento Transportation Authority board. The STA board is made up of council members from cities around the county as well as members of the county board of supervisors.

Here’s what your community will get if you vote for Sacramento’s transportation sales tax

There is a whole list of projects this additional money will go towards, and while some of it seems like worthwhile ventures; widening bridges, replacing old ones, repaving roads, it’s also chock full of waste. Expanding bike lanes, creating one way streets downtown, making bus only lanes, making Interstate 5 add carpool lanes (this is occurring already by the way), walking trails, and creating a four lane mini-connector highway from Elk Grove to Folsom! It includes a slew of wasteful transit spending, everything from newer hybrid electric buses to expanding light rail to Elk Grove in the south county and the airport in the north county. Basically, the money is divvied up proportionally and the projects are already in the planning stages. Of course, it’s California so combating climate change even worked its way into the conversation.

I call these projects “wasteful” because we as a county have not maintained these assets since they were constructed. I call it the “plug the holes and pretend all is well plan.” I drive a couple roads to get from my house to my job, the roads are horrifically maintained. When a pothole appears, the City tosses some asphalt in it, hammers it down with a shovel and moves on; only for said pothole to reappear a couple days later. When a re-seal or re-pavement should be done, we put it off in the name of saving money. Same goes for our bridges and overpasses, we ignore them entirely. I know this for a fact as a former Cal-Trans engineer told me no one even inspects them anymore, and if they do its more of a drive-by affair. This is not called a needed tax, it’s called fixing a bureaucratic time bomb waiting to blow up. Also what irks me is these planned “traffic easements” are total bunk, that mini-highway on Grant Line is only being proposed and funded because Folsom is building 10,000 new houses not far from there. Ditto with the new highway on ramp at Whitlock Road in Elk Grove. We are adding a casino and about another 8,000 homes there. I have heard rumors of a paid toll road on the 80, I thought toll roads paid for themselves? This wild looking bridge we are replacing at “I” Street seems necessary, but how come West Sacramento isn’t sharing in the cost? The street enhancements for autonomous cars seems very forward thinking but shouldn’t we wait until this becomes a bigger thing in the Bay Area…like you know, where all this tech seems to originate from?

I’m down on the transit funding for a couple reasons. First, I already fund transit whilst filling my vehicle with gasoline. The truth is that the Legislature is diverting money from gas, diesel, and other transportation taxes for use in other areas. Instead of fighting this diversion of funds, local government is trying to establish their own revenue stream to replace money diverted from them at the state level. Second, transit is required to recover so much of their operating costs at the fare box, and it seems like every year they are cutting stops, consolidating routes and raising fares, the business model seems very un-user friendly. Third, public transit just seems to constantly miss the mark. There is rampant fare-evasion, crime (including; violent, sexual, and petty), and in general people do not feel safe.

For example, look at the newly completed light rail extension to CRC junior college in my hometown. If I wanted to ride RT’s light rail to the Kings game, I must drive my car 20 minutes to the RT station, leave my car in a questionable area, and ride the train through quite a few downright rough parts of town on my way to the game and back. RT services are predicated on the expectation of leaving my car at a lot where everyone knows my vehicle will be unattended for many hours. RT just expects me to put my trust in the good citizens lurking in and around their parking lot.

Since I have lived, here everyone has talked about RT going to the airport. (I remember Joe Serna talking about light rail going to the airport back in the 1980’s when I was at Sac State—editor.) At one point they started work on the green line…but due to low ridership it was halted, now they want to use this tax hike to revive the idea yet again. Furthermore, they want to expand RT further south into Elk Grove. That seems all good and well, but land will be at a premium as much of that Bruceville Road route is built up already. This idea just seems like a boatload of waste. In addition, this light rail expansion…. completely skipped over our shiny new upscale mall built out at Delta Shores…just saying.

The task could be tough: Sacramento County transportation officials would have to persuade voters to agree to what would be a third ongoing transportation tax. The county already collects a half-cent sales tax for transportation projects, approved by voters in 2004 and set to last 30 years. Meanwhile, California state officials raised the gas tax in 2018 to provide more money for state and local transportation projects.

A 40-year sales tax to tackle climate change is likely headed to Sacramento’s November ballot

I predict a very close ballot box result next November, but don’t be shocked to see ballots “found” after counting ends.


Introducing CALSavers Your State Run Retirement Plan

The Chief explores another socialist step in the cradle-to-grave care provided by the almighty state of California.

In case you missed it, a new retirement program goes live in California starting July 1st. This plan was put in place because the state wants businesses who don’t offer a retirement plan to be forced to offer them. It’s very easy to enroll, actually you are automatically enrolled, unless you opt out. Starting next year, any business with over 100 employees is required to enroll, the following year, the employee number drops to 50, then by 2022, the employee threshold drops to 5.

Details on the actual program are tough to glean, so I called the Employment Development Department (EDD) and they could not answer my questions. Seriously if you want bruises on your brain by all means call them. The State Treasurer’s Office (STO) did provide some color, but not any direct answers. In fairness I totally threw him off his game, after he called me back and said a long spiel which sounded like Latin or some other generally accepted language in California. When he came up for a breath, I told him, “Sir, this is an Arby’s.” He was shaken. I continued to dig for answers, to which this guy either 1) didn’t know or 2) would get back to me about.

From what I could find out online, it looks like if you do nothing that you “opt in” resulting in 5% of your paycheck being remitted to the State and deposited in this retirement plan. The 5% increases by 1% each year until you reach 8%. Anyone can “opt out” or “opt back in” anytime. Such fluid policies seem like a strange hybrid model and an HR nightmare for a small business. If you opt in and don’t put an income level in the program it defaults to 30k a year, so if you make less than that you will be “feeling the Bern” on your paycheck. Something tells me that the paperwork won’t get corrected quickly nor will they “refund” the overage. Account changes are made with the state via internet or snail mail not your HR person so how does this state program communicate with employer to coordinate withholding amounts remain correct?

The account is an after-tax investment i.e. Roth IRA. It appears you have the choice of a mutual fund or a money market fund to deposit your money into. Investing in a money market fund makes little to no sense as they only provide about 1% interest a year. Fees run about 1% a year as well effectively destroying and rate of return on that account. The whole thing reeks of being a Ponzi scheme……

Well, actually it is.

The program was started with a loan (interest to be paid back) from both the SEIU and the CTA, two of the most powerful unions in California.

Two large public employee unions, the California Teachers and the SEIU, each contributed $100,000. Public employee unions played a major role in a national drive to create state-run savings plans for the private sector.

Public unions think improving private-sector retirement can help counter pressure to cut government pensions or, following the corporate trend, switch to 401(k)-style individual investment plans that create no long-term debt for employers.

The nine-member CalSavers board has looked at a public union-backed “pooled IRA” that could gradually, by diverting some of the investment yield in good years, build a reserve large enough to replace some of the losses in a bad year.

State-run retirement savings plan ready to launch

So, the “savers” will have to pay a fee to participate and must be enrolled automatically, or employers will be fined $750 per employee. So now an employer must complete all applicable forms for a new hire, and have them complete this paperwork? This is unfair. No wonder businesses are fleeing the state. Think of the food service industry or a minimum wage jobs where they turnover employees constantly. Another curve ball here, what if the employee doesn’t have a bank account and receives a paper check? What if the employee gets terminated and you fail to let “CalSavers” know? Do the deductions continue? Those fees are ridiculous and are literally just redistributing wealth to current retirees. For example, Vanguard offers accounts for literally a fraction of the fees. The “redistribution” I speak of is just a new way to keep current pension retirees happy. Keep this in mind, older folks (social security/pension recipient) vote in very large numbers, and it would spell the end for many a political career should said pension check bounce. Make no mistake about it, the SEIU and CTA could care less about any non-union member, they want their own taken care of first, and everyone else is a sucker and they are out of luck.

How would this plan even be enforced? The Treasurer’s Office representative said the state has a data base on all eligible business…. where? Even the Secretary of State’s Office can’t possibly have every business on record! Even if they did, how can they screen based on how many employees you have? Is their info really up to the minute? How can that be verified? This would be a nightmare to enforce!

Which parlays into my next point, the real point of this program is to create a brand-new layer of government workers, and a separate group of folks 100% dependent on government. While this may just be a pilot program initially, it will eventually expand to include 7.5 million workers in California… Why is what you may ask?

Low income citizens will opt out of said program (think about it $13 an hour with 8% of pretax paycheck deducted) doesn’t leave much room for food each month. Actually, it amounts to a salary cut…with rising fuel, food and housing costs retirement won’t be an option.

As a result, they will want to lure people like me into this scheme. If you earn around 80k that’s $6,400 a year that goes under state run control each year. By opting out and staying at Vanguard they lose out on that “revenue.” Trust us folks, there is a plan for this, and eventually I will be forced into the account or assessed a penalty for opting out.

As I consider this, I can think of many other questions. What if you leave the state while still working age? Can you roll it into another private account? Or is it heavily penalized and forced to remain in CA? I feel this will become a defined benefit scheme similar to current pension funds used by our state workers, where they are “funded” until they aren’t anymore and the last ones in are wiped out. What makes me skeptical is that the program was known as “Secure Choice retirement investing” prior to a name change. Is it just me or is using the word “secure” in regards to retirement plans just inviting a major lawsuit?

In addition, how does shareholder voting work? Obviously, these funds are going to hold a bunch of companies (more on this in a minute) and as a shareholder you have a right to vote but I don’t see this being allowed. Is Big Brother casting shareholder votes on my behalf so they can steer the market in a way more in line with their political ideology? What companies are being invested in? Something tells me Phillip Morris, Raytheon, Pepsico and other “sin/bad for you companies” will be passed over. Want to take bets Tesla, and other “green” startups will be preferred? Politics over investment return is part of the governing documents of this scheme.

ESG/Socially Responsible Investments: Responsible social, environmental, and governance investing is an issue important to some Participants, and an Investment Option reflecting that belief should be offered.


I noticed a bond fund is available, I assume any state with policies/laws we don’t agree with here in CA will be passed over in favor of CA junk bonds! This is just a new way to put a hand on the scale to get a desired outcome, no question it bothers some in this state Tesla is literally going up in smoke. Or is this a way to load up on company stock and push for policy changes? If this program goes the way of MYRA at the federal level what happens to the government workers? I have a feeling they won’t be laid off just folded into an existing bureaucracy.

Worst of all workers will be screwed. You will find yourself laid off and working the same job as an independent contractor or a “temporary staffing worker.” All in the name of your employer avoiding this new program.

You have been warned…..

“The Chief”

Tesla Drivers Starting to Feel the Burn

Yep, leave it up to Democrats to push for their “green” agenda and then screw the folks that drink the Kool-Aid thinking that they are socially responsible and saving the planet. You and I know this is utter crap, but some folks are slow learners.

Illinois drivers are learning that utopia isn’t cheap. If you own a Tesla or other electric vehicle, the Illinois legislature thinks that you can afford an annual registration fee of $1,000 per year. Why? Because electric vehicle owners don’t pay their fair share of gas taxes.

Electric car owners in Illinois could take a large hit to their bank accounts after lawmakers proposed an extreme hike in registration fees for electronic vehicles in the state.

The proposal would raise the annual registration fee to $1,000, more than 57 times the current amount of $17.50.

Illinois officials believe the legislation will raise $2.4 billion for future projects, the major one being roadway improvement, according to the Chicago Tribune.

The bill was introduced last week by Chicago state Sen. Martin Sandoval, a Democrat who says the registration fee hike is imperative to help fund necessary infrastructure improvements.

The reason for the extreme hikes are that electric vehicles don’t provide the state any gas tax revenue.

Oh, Liberals in the state are outraged:

“It’s outrageous,” Tesla owner Nicoletta Skarlatos, 56, told the Chicago Tribune. “I thought Illinois was progressive and would want to encourage EV (electric vehicle) ownership.”

“Imposing fees on EVs that are over 400 percent more than their gasoline-powered counterparts is not only unfair, it discourages promising new technology that will reduce our dependence on petroleum, reduce emissions, and promote the Illinois economy,” Rivian spokesman Michael McHale told the Chicago Tribune.

OK, learning opportunity for Liberals and low information voters…Progressive means getting financially screwed by the government because government can never really be too big, and after all it is your god and the proper way of worship is giving your all to the divine. “Green Agendas” and “Carbon Footprints” are all about centralizing power in the government by reducing your freedom. There is not now nor ever was any manmade climate crisis. It is hubris and arrogance to believe that is even possible. Oh, sorry, hubris is:

English picked up both the concept of hubris and the term for that particular brand of cockiness from the ancient Greeks, who considered hubris a dangerous character flaw capable of provoking the wrath of the gods. In classical Greek tragedy, hubris was often a fatal shortcoming that brought about the fall of the tragic hero. Typically, overconfidence led the hero to attempt to overstep the boundaries of human limitations and assume a godlike status, and the gods inevitably humbled the offender with a sharp reminder of his or her mortality.

Link: Definition of hubris

Oh, those of us using internal combustion engines are not exempt from the wrath of the legislature.

The bill would also make things more expensive for residents who drive non-electric cars. The state’s gas tax would go up 19 cents to 44 cents a gallon, fees for driver’s licenses would double and the registration fee for non-electric vehicles would go up nearly 50% from $98 to $148.

The article concludes:

Illinois was seventh in electronic vehicle sales last year and there are about 15,000 registered in the state. Over 200,000 electric vehicles were sold last year, about two percent of total U.S auto sales, according to Jenny Acevedo, an analyst with auto research firm Edmund.

“Every automaker has broadcast loud and clear that the future of automotive is autonomous and electric,” Acevedo told the Chicago Tribune. “Certainly, going from $17.50 to $1,000 in terms of registration isn’t going to move the needle in the direction the industry is hoping.”

Link: Illinois residents could be charged $1,000 a year to own an electric vehicle under new legislation

Did you note in the above that only two percent of autos sold in the country were electric, yet Tesla is now reportedly the number three US automaker. Using what metric? Sorry but production numbers do matter to us in the real world.


If this law is defeated, look for it to be followed-up with a mileage tax. I think that is the real plan here, but you need to mold public reaction to be that $1,000 per vehicle is harsh but a mileage tax on electric vehicles is “fair”. This “fairness” is a Liberal buzz word for spreading the misery. Note that no one is disputing the premise that vehicle taxes should be increased, its just a matter of how to do it. Most electric vehicles are purchased by the wealthy so making them pay more is going to happen. I have always said the greatest so-called benefit of electric vehicles is not paying the gas tax but politicians will fix that loophole.

California Sliding Into Sea of Economic Insolvency

Some folks around the social orbit our editorial staff just don’t have a clue what economic mischief is afoot at the “Bill Mill” so I thought I would break it down for the slow learners. If you are a low information voter or a 90-Day Calendar Guy, this includes you.

Prop 13

Proposition 13 has been a protection on property taxes for Californians since Jerry Brown was governor the first time. If you have no clue who Rose Bird is then it was implemented was before your time. No one serving in the Legislature is old enough to remember the world before Prop 13 was enacted thus they have no idea what an economic benefit this has been to California businesses and homeowners.

Reasons for Prop 13

The holy grail of many Liberals in this state is to dismantle the protections afforded by this ballot proposition. The most logical way is to bifurcate the law by separating business from residential property. Most interpretations of this arbitrary split result in rental property ending-up in the business bucket. Give our “housing crisis”, all this will do is result in even more upward pressure on rental prices. Having businesses and residential property taxed at different rates is only the first step in scrapping Prop 13. At some point, residential folks will get stripped of their protections too.

Prop 13 allows max property tax increase of two percent per year

Rent Control

Using the “housing crisis”, California voters will be given another opportunity to enact rent control in 2020. Again, if this ballot measure does not implement a statewide rent control program like the one just implemented in Oregon, it will be a big step in that direction. I think rent control is likely to pass next time. If not, it will keep showing up on the ballot until it does. Look for the ballot title and summary to be the Affordable Housing Act of 2020 or something similarly deceptive.

2017 graphic–before Oregon enacted rent control

Sales Tax

Many services are currently exempt from charging sales tax. Since the Board of Equalization has been gutted, I see a path cleared to changing the law to get rid of most protections and subjecting virtually everyone and everything (except diapers and tampons) to sales taxes. Thus your haircut, car repair, tax preparation, attorney, etc. will cost you even more.


The above will all be sold on the basis of class warfare to economically illiterate people—mostly public school graduates—as a punishment on “the wealthy” because they believe that people can only get wealthy by screwing the “little guy”.

Ultimately, these issues will not be decided on what is best for you but on whether the Democrats are happy with the revenue stream going to Sacramento. This is allegedly a time of surplus revenue but I have my doubts. We know the long-term prognosis is bad but whether the folks at the Capitol have a clue… Oh, please don’t pin your hopes on that.

Anyway, the words quoted by H.L. Richardson keep flowing thru my mind, “But look what we let them keep”. Let’s hope the legislature keeps their hands out of our pockets but I don’t think they can help themselves.

The Farce of Tesla


Tesla sold 244,920 vehicles in 2018 and some on Wall Street said they were the number two US automaker–up until Ford’s quarterly financial report was released this week. What a crock.

Over the same period—2018—Ford sold 5,982,000 vehicles.

The math is this; Tesla sold four percent as many vehicles as Ford and people said Ford was the number three automaker.

Folks, we don’t even know if Tesla is selling their vehicles at cost let alone making a profit. Ford is outselling Tesla by a huge amount. Ford sold 5,737,080 more vehicles than Tesla and somehow Elon Musk is our role model?

Tesla is tethered technology.

Both my buddy with the Chevy Volt and my future son-in-law who owns a Tesla, have the same problem. Namely, where to charge the vehicles.

My buddy with the Volt says he tried to go to Oregon with his Volt and found that he was stuck near the I-5 corridor because there was no place to charge the car once you got away from the Interstate.

Tesla is s finicky vehicle. It has three charging modes: super-fast, medium, and super slow. My son-in-law candidate drives to Elk Grove from the S.F. Bay Area to see the daughter. Before going home, he must drive to the Arden Fair Mall because that is the only fast charging station in the area. After charging the Tesla for 45 minutes to an hour, he can then go home. Please understand that this means that he drives over an hour further to get to the mall and back for the privilege of charging his car. This charging evolution adds two hours to every visit that he makes here for the privilege of driving an electric car.

If you fail to use the Tesla installed charging stations, then plan to wait several hours—like six or more—to get a decent charge on the car. Lest you think I exaggerate, check out this story of a guy in New York that took his son to camp in a demonstration Tesla Model S given to members of the media. Here are excerpts of his travelogue.

I’ve screwed up my range calculations. We don’t have enough to make the closest partner charging station. The car was warning us of this, but we needed to get the boys dropped off on time. So we took a chance and ended up ALMOST RUNNING OUT OF GAS, er … ELECTRICITY!

There’s a cable in the truck of every Tesla that enables you to charge on the fly. But there are no high-speed charging options up here in the middle of nowhere in the Catskills. So we had to resort to the slowest option, good old 120-volt, wall-socket-level rejuicing.

You plug into this small charging port at the left rear of the Model S.

Tesla charging in BFE via 110 VAC

Photo by Matthew DeBord

… but we’ll be getting only 1 mile per hour of charging! That’s mega-slow.

A few hours, a few more miles in the battery, and we have enough to head back through the lovely scenery to find lodging — and charging — for the night.

Tesla charging at one mile per hour

Photo by Matthew DeBord

By the next morning, at a charging rate of 3 miles per hour, we have enough juice to make the closest partner charging location.
We’re plugged in …

… and drawing power again.

But this time, we’re charging much faster. In a few hours, we’ll have enough power to get to the closest Supercharger location.

Link: A year ago, I had an epic adventure in a Tesla Model S — here’s what happened

Short version was that failing to charge the car resulted in an additional day of travel because it charged so slow.

Tesla = Tax Opportunities

Many early adopters of electric vehicles think that one big advantage is avoiding paying gasoline taxes. I’m here to tell you now thatBig Brother” is completely aware that you aren’t paying your fair share for road maintenance and has plans to remedy the situation. Soon Tesla owners will be introduced to the long-rumored mileage tax. Yep, you will be billed for each mile travelled by the electric vehicle that you drive.

Thanks to folks like the Chinese; government now has the power to track electric vehicles (and probably internal combustion powered ones too) via GPS. So, you won’t even have to do paperwork, you will be issued a mileage bill from government each billing cycle. Oh, I’m sure they will be happy to receive their funds via autopay.

For some folks, Elon Musk can do no wrong; however, I’m not a believer. America flirted with electric vehicles over 100 hundred years ago and the internal combustion engine won. In a free market, I think that same outcome would happen today, but our markets are anything but free.

Government is willing to put their thumb on the scale to help Musk, but I don’t think that gets this technology over the finish line. They just give him an unfair advantage in the short run.

Until electric power is plentiful and readily available, such technology is a novelty. Sadly, California is moving away from readily available energy and towards limited options at higher prices. They are restricting the market not unleashing it. Socialist utopias are like that.

If I had the money, I would buy a Tesla, disconnect the battery, wrap the car in plastic and hide it in a non-descript barn for 150 years, then it might be worth owning; otherwise, I’m sitting this revolution out.

Economic Illiteracy on Tax Cut

Taxes were cut under the Trump plan. However, because of how it was done, some folks out there are pushing the lie that Trump actually raised taxes on everyone but the rich.

Here is yet another example, this time from Reuters.

NEW YORK (Reuters) – Only one in five U.S. taxpayers expect to pay less income tax this year as a result of the tax reform law passed in 2017 by Republicans who promised big savings for everyday Americans, according to a Reuters/Ipsos opinion poll released on Friday.

The tax overhaul lowered federal income tax rates for individuals as well as for corporations, but it also capped certain deductions, such as for state and local taxes, which could mean that some people will wind up paying more.
The March 6-11 survey found about 21 percent of adults who had either filed their taxes or planned to said “the new tax plan that Congress recently passed” would let them pay less this year; about 29 percent said they would pay more; 27 percent said there would be no impact; 24 percent said they were not sure.

Link: Few Americans see savings from Trump’s tax reform: Reuters/Ipsos poll

Did you note the deception that is the premise of this article? It’s subtle. The verbal sleight of hand is this, the only federal taxes you pay or don’t pay are solely determined on whether or not you get a tax refund on April 15th. If you get a refund then the tax cut is good for you but if you write a check then you are paying more taxes and thus you are getting screwed once again by the Republicans. This article totally ignores whether you got to keep more of your money each month last year (once the new tax withholding tables were enacted) or on the whole paid less than the previous year. To reduce the value of the tax cut down to whether you get a refund on April 15th is deception and ignorance. This is economic illiteracy.

This ladies and gentlemen will be one of the Democrat’s chief arguments against Trump in 2020. Not whether on the whole you got to keep more of your money and really did pay less but instead whether your refund was larger after the tax cut. Talk about economic illiteracy and low information voters…

No Tax Refund: Financial Media Proves We’re ReallyRight

Finally, several weeks later and after two different articles written by me on this blog, the Wall Street Journal and CNBC are catching up to the fact that many people are either not getting a tax refund at all this year or a smaller one based on changes stemming from Trump’s tax cuts.

First the WSJ article.

FYI, I found that saving said articles from WSJ as PDF files is important because after their first day on the web, they are embargoed behind a pay firewall. As usual, I quote extensively to prove my comments and analysis art in context, something the Main Stream Media will not do.

WASHINGTON—The first tax-filing season under the new tax law got off to a slower start than last year and filers so far are seeing smaller average refunds, according to early Internal Revenue Service data released Friday.
With about 10% of households filing their returns, the percentage of households getting tax refunds is similar to last year, but average refund size is down 8%, to $1,865. The number of returns filed so far—16 million—is down 12% from the similar point a year ago.

The article points out that early filers are typically the ones expecting a refund and those numbers are down. Yep, no kidding.

Please note the next section carefully, overall you may have gotten a tax cut but that is not the same as a large refund because you had less withheld over the year and thus had more spendable money through-out the year.

About two-thirds of households are getting tax cuts for 2018 under the law, and just 6% are paying more, according to the Tax Policy Center. But the size of those tax cuts may not be reflected in refunds, which are just the end-of-year reconciliation of what a taxpayer owes and what was withheld or paid during the year.
Many taxpayers received much of the benefit through reduced paycheck-withholding throughout 2018. On average, refunds should be larger than usual according to estimates from Evercore ISI and Morgan Stanley .
Still, tax experts and preparers expect many households to be surprised by the size of their refunds—in both directions—and, on balance, millions of people may shift from getting refunds to owing taxes.

Early Data Show Slower Start to Tax Season

CNBC also has a similar article up today.

Though the 2018 filing season only started on Jan. 28, some early filers are discovering that they either owe the IRS or they’ll be getting a smaller-than-expected refund from the taxman.

About 30 million people, or 21 percent of U.S. taxpayers, are expected to owe money to the IRS this tax season, according to a report from the Government Accountability Office, a legislative agency that provides data to Congress.
“The people who are most likely to be surprised this year are the ones who lost some deductions they had last year and who didn’t make changes to their withholding,” said Nathan Rigney, lead tax research analyst at the Tax Institute at H&R Block.

If you owe this season, consider it a lesson learned and do what you can to head off the same troubles in 2019.
It’s generally a good practice to review your withholding, especially if you’ve been through major life changes, including getting married or having children.

If you failed to withhold enough tax in 2018, the IRS has a nasty surprise for you

If you do owe Federal taxes, TurboTax will let you eFile now and schedule payment anytime until April 15th.

Occasionally here, our posts do beat the Drudge Report, Wall Street Journal, local television stations and others by hours or even days. For a guy that runs this blog in my spare time, I think that’s kinda cool. Oh, and in fairness I do have a little help.

Why You Won’t Get a Tax Refund This Year

The bad news is you won’t get a tax refund from the IRS this year. The worse news is you will be writing Uncle Sam a large check.

But why? Didn’t we get a tax cut this year?

I will get to that in a moment but first let’s talk about a financial planner’s view of tax withholding.

Zero Due—In Theory

If you always get a tax refund, you are not having the correct amount withheld from your paycheck each month. Really you are making an interest free loan to the government in order to get a large refund.

On the other hand, if you always write a check on April 15th then you are not setting aside enough throughout the year for your taxes.

A financial planner would advise you to try to owe zero each year; not too much either way. Like you, I tended to ignore this advice and enjoyed a large refund. Sadly, those days are gone.

Trump Tax Cut

Trump did two things that will rock your fiscal world.

First, he reduced the amount withheld for Federal Taxes each month. This resulted in you having more take-home pay in 2018. Tax rates were cut; in addition, however, some deductions were also limited or abolished. This leads to the second point.

Second, a cap was placed on the deductibility of local taxes. This cap is $10,000. If you live in states that voted for Hillary, then you are likely in trouble. If you live on either Coast: California, Oregon, Washington, New York, New Jersey, etc. then buckle-up. If you are employed and own a home, you will hit the $10K limit. Here’s how it works.

Above is a portion of 2018 Schedule A
Line 5a Supposed you had $6,500 withheld from your wages for California Payroll Tax and State Disability
Line 5b You paid $4,578 in property taxes on your house in 2018
Line 5c Remember the portion of your DMV bill that is deductible?
Line 5d Congratulations, you are above the $10K limit

You now owe Federal Income Taxes on anything above the $10K limit. In the past all this was deductible. This was viewed as a subsidy to people living in high tax states. Why? Because the state could tax the snot out of you and the Feds allowed this taxation to be deductible. Thus, it awarded high local taxation.

The only other items on the Schedule A are Mortgage Interest and Charitable Giving. Unless these two are more than $14,000, you and the wife will get the standard deduction of $24K.

Also missing from the new Schedule A is Unreimbursed employee expensesjob travel, union dues, job education.

Also gone from the Form 1040 is the Individual Deduction.

If you are married, you can claim the Standard Deduction $24K plus a tax credit of $2K per child and that’s about it.


Last year between itemized and the individual deductions, a client was able to deduct $42K off their gross income. This year for the same client deductions total only $26K ( Standard Deduction plus one child). The one-year difference on the Schedule A is $18K. The net result of all tax changes is that their taxable income increase $22K over last year. Thus on April 15th, their refund is gone, and instead they get to write a large check to Uncle Sam.

Sample above was created using TurboTax–some numbers rounded for simplification

In 2018, you did enjoy more take home pay with the new and lower tax withholding. Under the new tax tables, the couple in the example above got about $250 more in their paychecks each month; but clearly, they need to visit their HR department and have more withheld in 2019 if they don’t want to write another large check next year.