That reasoning seems spurious to me. Rich people are some of the cheapest fucks out there.
In that case we should also penalize purchasing ICE vehicles that cost more than $50k.
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They also capped it by the price of the car; $80k for trucks/vans/SUVs and $55k for other cars.
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It seems like the service industry is trying pretty hard to avoid that. My guess is that the upper middle class is getting raises that may outpace inflation, but not the lower middle class and below. I haven’t seen data broken down. Given that most of the inflation is in food/gas and linked to the supply chain issues and the war, I don’t think it’s as prone to an inflationary cycle. I also don’t know that the Fed is going to keep raising the rate beyond a certain point as a result of that.
From what I have gathered, very few cars are actually going to be eligible off the bat. This is due to the battery sourcing and final assembly restrictions.
Oh yeah, that too. A certain percentage of the car has to be manufactured in free trade countries and that ramps up over time because lol Manchinaments. So a bunch of the cars that have battery components from China are going to be ineligible for a while.
The main reason there is a phase out is, I believe, because Manchin wanted it. There was a phase out set much higher and Manchin wanted it lowered.
Nobody saw it coming.
All of the Dem voters I know who are really struggling right now were jonesing to buy a new $80k luxury toy but couldn’t quite swing it. Tax credit is a huge win for them.
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It would have been interesting if they had been able to keep the union-made EV tax credit bonus.
Your intuition is actually the opposite of reality so far. Lower wage workers wage increases are offsetting inflation much more than higher earners because their work is actually critical to shit getting done and everybody knows it.
Edit to include a source:
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its probably also because changing jobs as a higher earner is more complicated. the longer you stay somewhere, the less hard you usually work and more job stability you have.
I’m not sure those numbers paint an accurate picture in terms of what will drive inflation or not. I think I worded it and explained it poorly.
Like, hospitality got a 16% raise to $16.97 per hour. So they were making $14.63 before. That’s about $30K a year full-time. Now they’re making $35K a year.
Overall inflation was 7%, but food-at-home was 12.2% according to this site. Rent was about 14% according to this data. Gas prices peaked like 50-60% higher than a year prior. They didn’t stay up there, so let’s call it 30%.
If your monthly budget was the entirety of a $2,100 take-home pay, you might have been looking at something like:
Rent $800
Utils $100
Phone $25
Cable/Internet $50
Gas $100
Car insurance $150
Groceries $500
Health Insurance $150
Random Necessities $100
Entertainment $50
Total: $2,025
Remaining: $75
Now you got a raise to $35K and your take-home pay is $2,366. Let’s see how that budget shakes out with the above inflation rates added in, ignoring all other inflation:
Rent $912
Utils $100 (totally ignoring the impact of gas here btw)
Phone $25
Cable/Internet $50
Gas $130
Car Insurance $150
Groceries $561
Health Insurance $150
Random Necessities $100
Entertainment $50
Total: $2,228
Remaining: $78
Because the highest inflation applied to the largest categories in the budget, that awesome raise that was more than double the rate of overall inflation didn’t actually improve their situation much at all… and I underestimated the overall inflation by ignoring the impact on a few categories.
Now take an upper middle class person making $150K who got a smaller raise, say, 5% or $7,500 pre-tax, and they probably outpaced their increased expenses because the categories that took the biggest hit from inflation make up a smaller portion of their budget.
So basically the bigger raises for the working class did ~nothing to create an inflationary cycle on any discretionary spending. My theory is that retail and discretionary spending will be down for the poorer Americans and up for the richer Americans. I’m not sure where the flip will be, like bottom 50% vs top 50% or bottom 70% vs top 30%, etc.
But I wouldn’t be looking to invest in stuff like chain restaurants that cater to the middle class, travel that caters to the middle class, etc. But I think places the wealthy spend money for fun should do great.
That’s an indirect reason but the direct reason is pretty obvious to me, the more you earn the more your role is leveraging the work of others to create income for yourself. Most obvious and common is management. But a software engineer for Uber, as an example, is indirectly leveraging the work of Uber drivers.
Right now the nuts and bolts of our economy are stressed. Not enough people to move shit, fix shit, build shit, cook stuff, etc. and the problem can’t be solved with “software that optimizes processes,” “a New Age management approach for today’s economy” or any such other non-sense. It’s a raw manpower issue and businesses are going to have to compete vigorously for that manpower.
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yeah this is also where the millions of missing immigrants due to covid is coming into play.
That’s an awfully high grocery bill for somebody living with roommates.
Depends on how much olive oil they’re buying
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$16 a day and including stuff like toiletries and household cleaning products, with no other food expense in the budget?
Based on the first 4 items listed, you’re describing a person struggling to get by in shared housing. If they’re spending that much on food they are terrible shoppers with terrible budgeting skills.
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isn’t fisker inc just a rebranding of the bankrupt fisker automotive which has been around since like the mid 00’s and sold a total of 2000 cars worldwide… seems silly to give them the benefit of a “start up”.