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Ford reports 2nd quarter 2019 sales

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On 7/5/2019 at 7:48 AM, HotRunrGuy said:

I wonder how many of these higher-end trucks would sell if the tax code was different?  I used to work with a guy in MI that had a hobby farm, with his & hers XL Navigators, written off as a "business" expense. I have no problem with people spending their own money, I do have a problem when the rest of us have to subsidize their choice of vehicles.

Really, how many Denali's or KR's do you see with a load of gravel in the bed?

HRG

Yeah I have a friend that has his own business and his wife drove an Escalade for business. Wonder if she felt out of place driving to the free clinic to get the kids their shots since they had minimum health care.

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9 minutes ago, hoss96racing said:

Yeah I have a friend that has his own business and his wife drove an Escalade for business. Wonder if she felt out of place driving to the free clinic to get the kids their shots since they had minimum health care.

My wife wouldn't borrow my car when she worked down in MD for the county-she worked with alot of disadvantaged families that where on government support and didn't feel that it was proper-even though it was "just" a Taurus. Where she works now, one of her coworkers has the last refreshed steel Navigator that they take to clients (she does work with families that have autistic children)  and she said that doesn't set a good prescience because some of these families blow through their deductibles within the first 2 months of services-which is about $4 grand, to help pay for the services the children need.  

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On 7/5/2019 at 3:48 AM, HotRunrGuy said:

I wonder how many of these higher-end trucks would sell if the tax code was different?  I used to work with a guy in MI that had a hobby farm, with his & hers XL Navigators, written off as a "business" expense. I have no problem with people spending their own money, I do have a problem when the rest of us have to subsidize their choice of vehicles.

Really, how many Denali's or KR's do you see with a load of gravel in the bed?

HRG

How does the government stealing less of other people's money equal you subsidizing their vehicle purchase?

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8 hours ago, probowler said:

How does the government stealing less of other people's money equal you subsidizing their vehicle purchase?

Exemptions, deductions, credits, exclusions, lower rates, etc. in the tax code are subsidies by definition. These subsidies are available to you, me, and anyone else filing a U.S. Federal income tax return. 

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22 minutes ago, rperez817 said:

Exemptions, deductions, credits, exclusions, lower rates, etc. in the tax code are subsidies by definition.

Not really.  At least not vehicle business deductions.

Quote

subsidy

noun
sub·si·dy | \ ˈsəb-sə-dē , -zə-\
plural subsidies

Definition of subsidy

 

: a grant or gift of money: such as
a : a sum of money formerly granted by the British Parliament to the crown and raised by special taxation
b : money granted by one state to another
c : a grant by a government to a private person or company to assist an enterprise deemed advantageous to the public

 

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2 hours ago, akirby said:

Not really.  At least not vehicle business deductions.

 

A tax reduction is no less of 'a grant of money' than a check in the mail.

You will be hard pressed to find anyone who does not consider tax offsets tied to specific activities a 'subsidy'. Many finance-related definitions of the word explicitly include tax breaks in their description of subsidies. 

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14 hours ago, probowler said:

How does the government stealing less of other people's money equal you subsidizing their vehicle purchase?

People abusing the tax code and writing off everything as a business expense (most of which is not legitimate) is one issue while the government wasting, misappropriating and funneling our money to doners who help get them elected is another.  Both things are true but that does not make either one less wrong.

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3 hours ago, Noah Harbinger said:

A tax reduction is no less of 'a grant of money' than a check in the mail.

You will be hard pressed to find anyone who does not consider tax offsets tied to specific activities a 'subsidy'. Many finance-related definitions of the word explicitly include tax breaks in their description of subsidies. 

A tax reduction to purchase an electric vehicle is a subsidy.   You're subsidizing the purchase to encourage adoption of BEVs.

A farm subsidy is given to encourage farmers to grow (or not grow) certain things which ultimately benefits everybody.

Local power companies paying you to uprade your appliances or add insulation to your house is a subsidy.   It helps lower electrical costs for everyone.

A tax reduction based on how you classify an expense is not a subsidy because it's not designed to assist something that is deemed beneficial to the public.

 

The difference is semantic but it depends on why the tax break is given.

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43 minutes ago, akirby said:

A tax reduction based on how you classify an expense is not a subsidy because it's not designed to assist something that is deemed beneficial to the public.

Are you referring to the deductions/expense classifications in Section 168(k) and Section 179 of the IRS Code for vehicles over 6,000 lbs. GVWR? That's definitely a subsidy. Through these provisions in the tax code, the federal government is subsidizing the following things they deem beneficial to society.

1.) Encourage the creation of small businesses.

2.) Encourage sales of new trucks and SUVs.

Edited by rperez817

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9 minutes ago, rperez817 said:

Are you referring to the deductions/expense classifications in Section 168(k) and Section 179 of the IRS Code for vehicles over 6,000 lbs. GVWR? That's definitely a subsidy. Through these provisions in the tax code, the federal government is subsidizing the following things they deem beneficial to society.

1.) Encourage the creation of small businesses.

2.) Encourage sales of new trucks and SUVs.

No I'm referring to people who buy personal vehicles and register them under their business and count them as a business expense when they aren't actually used as part of the business.

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1 hour ago, akirby said:

No I'm referring to people who buy personal vehicles and register them under their business and count them as a business expense when they aren't actually used as part of the business.

Got it, thanks akirby sir. That's not a subsidy, it's tax fraud. 😯

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Fusion name should be re-used for a "white space" vehicle next time around, something that would compete with Subaru Outback.

Sure, some want "old girl" 2013 design around for years, but if it can only sell to fleets or with huge rebates, why bother? It cheapens the brand.

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3 minutes ago, 630land said:

Fusion name should be re-used for a "white space" vehicle next time around, something that would compete with Subaru Outback.

Sure, some want "old girl" 2013 design around for years, but if it can only sell to fleets or with huge rebates, why bother? It cheapens the brand.

Jim Farley has mentioned in a video about more 'white space' vehicles coming as well as in articles suggesting that there will be an all-new white space vehicle for 2021 likely based on the CD6 front drive setup and would be called the Fusion. I wouldn't be surprised if current Fusion continues with the Fusion Classic or Fusion Heritage name. Ford did this with F-150 in 2004 with F-150 Heritage.

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16 minutes ago, rperez817 said:

Got it, thanks akirby sir. That's not a subsidy, it's tax fraud. 😯

Actually I think it’s quite legal.  It’s a loophole in the law.

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2 hours ago, rperez817 said:

Are you referring to the deductions/expense classifications in Section 168(k) and Section 179 of the IRS Code for vehicles over 6,000 lbs. GVWR? That's definitely a subsidy. Through these provisions in the tax code, the federal government is subsidizing the following things they deem beneficial to society.

1.) Encourage the creation of small businesses.

2.) Encourage sales of new trucks and SUVs.

Enacted in 1982 under the TEFRA legislation when few people bought trucks for personal use.

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The only way one can define a "tax reduction" as a "subsidy" is to first feel entitled to other people's money.  Wanting others to pay more taxes so you can have more social services and benefits, is theft, and as we all know, taxation is theft; I didn't sign any social contract so you people could have free flu shots and unlimited war in the Middle East.  I applaud any normal citizen or small business owner who uses the legal tax code to their maximum benefit, and I disdain anyone who would bribe politicians to support their industry or raise taxes on others. And for Goodness sakes, corporations are not people and shouldn't be allowed to contribute to political campaigns! (Another of many sad examples of the failure that is the Supreme Court)


Don't like government granting protections and bailouts to big business?  Stop giving the government the necessary power to do so. We didn't need the government to bail out banks, or save GM from bankrupty, but we let that happen by electing crooked politicians who were bought by lobbyists. You can try to elect the "right" politicians to make more rules and laws, but it won't work. Both sides are corrupt, and unless things change, we will always be 4 or 8 years away from electing the next "Hitler" or "Socialist"

For as long as there is power in government, there will be people who seek to use and abuse that power.

Edited by probowler

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13 hours ago, 630land said:

Fusion name should be re-used for a "white space" vehicle next time around, something that would compete with Subaru Outback.

Sure, some want "old girl" 2013 design around for years, but if it can only sell to fleets or with huge rebates, why bother? It cheapens the brand.

Sad truth was that it was sailing along quite well up until the 2015 refresh but after that when the market toughened, Ford's modest MCE was seen as not enough. Even today,  if Ford announced a "new Fusion" with different sheet metal, 2.3 EB/8AT and 2.5  hybrids, the thing would till be selling with a much higher trim mix, which is what Ford lost when Fields went cheap.

Edited by jpd80

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15 hours ago, akirby said:

No I'm referring to people who buy personal vehicles and register them under their business and count them as a business expense when they aren't actually used as part of the business.

 

13 hours ago, akirby said:

Actually I think it’s quite legal.  It’s a loophole in the law.

Sections 168(k) and 179 do not apply to personal use of a motor vehicle, whether it is registered by a business or an individual. Claiming personal use as business use for tax purposes is illegal and subject to penalties. The IRS aggressively looks out for small businesses that are created simply to dump lifestyle expenses into the entity to reduce individual income taxes.

The 2019 Ford Ranger I bought for my family's lawn care and landscaping business is used for personal trips about 30% of the time. I use a vehicle tracking device from Geotab and Quickbooks to document personal use vs. business use.

The Ranger's GVWR is below 6,000 lbs, so I don't qualify for the accelerated depreciation/deduction schedule that one would get with say, an F-150 or F-250.

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6 hours ago, jpd80 said:

Sad truth was that it was sailing along quite well up until the 2015 refresh but after that when the market toughened, Ford's modest MCE was seen as not enough. Even today,  if Ford announced a "new Fusion" with different sheet metal, 2.3 EB/8AT and 2.5  hybrids, the thing would till be selling with a much higher trim mix, which is what Ford lost when Fields went cheap.

Amen. An Outback competitor with a Fusion nameplate would be fine, but a C2 or CD6 based sedan (whatever platform the NG Edge uses) would provide the volume Ford needs to cover a lot of the excess production capacity Ford looks like it will have.  I believe a new Fusion sedan would be more profitable for Ford than the Escape, small pick-up, or Transit Connect.

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20 minutes ago, Trader 10 said:

I believe a new Fusion sedan would be more profitable for Ford than the Escape, small pick-up, or Transit Connect.

No, not when you can get $3-4K rebates on a Fusion-which is why sales are generated for it. Sedan buyers (at least the market) has gone to "get it cheap" for people looking for an inexpensive vehicle. If people actually wanted a sedan-Ford wouldn't be dropping the Sport models and making the TI models hard to get. The are focusing on selling Hybrids (helping CAFE) and cheaper SE models to cover for the loss of the Focus and other smaller cars. 

The 2020 Escape S starts at $28,255 and the Transit Connect starts at $26K and is imported from the EU...the Fusion starts at 22K-before discounts. 

The Fusion would be more profitable as a Baja type wagon or something that has a starting price $25+ or higher, vs the current sedan (which the market is saturated with product and waning demand)

Edited by silvrsvt

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17 minutes ago, silvrsvt said:

No, not when you can get $3-4K rebates on a Fusion-which is why sales are generated for it. Sedan buyers (at least the market) has gone to "get it cheap" for people looking for an inexpensive vehicle. If people actually wanted a sedan-Ford wouldn't be dropping the Sport models and making the TI models hard to get. The are focusing on selling Hybrids (helping CAFE) and cheaper SE models to cover for the loss of the Focus and other smaller cars. 

The 2020 Escape S starts at $28,255 and the Transit Connect starts at $26K and is imported from the EU...the Fusion starts at 22K-before discounts. 

The Fusion would be more profitable as a Baja type wagon or something that has a starting price $25+ or higher, vs the current sedan (which the market is saturated with product and waning demand)

You're comparing a new generation Escape to the Fusion that's been around 7 years in its current form. The 2019 Escape starts at $24015 and is being offered with a 20% discount just like Fusion. The point is a new Fusion sedan would be able to command higher prices - just like the 2020 Escape vs the 2019 Escape. Plus the cost savings Ford has in building the Fusion in Mexico.No argument that a Baja type model (which I think would be good along with the sedan) would be able to be priced higher - I just don't think sales would reach 50k/year given all the competition just from other Ford CUV's.  The sedan market is slowing, but is still a large market and Fusion sales are up this year.  It must still be generating a reasonable return, otherwise Ford wouldn't have committed to keeping it to at least 2023.

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What it boils down to is an opportunity to pick up more valuable sales with a well thought out package, truth is, something like a Fusion properly reworked as a white space crossover vehicle would allow Ford to continue with a near car that picks up sales with better ATP.

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6 hours ago, rperez817 said:

 

Sections 168(k) and 179 do not apply to personal use of a motor vehicle, whether it is registered by a business or an individual. Claiming personal use as business use for tax purposes is illegal and subject to penalties. The IRS aggressively looks out for small businesses that are created simply to dump lifestyle expenses into the entity to reduce individual income taxes.

The 2019 Ford Ranger I bought for my family's lawn care and landscaping business is used for personal trips about 30% of the time. I use a vehicle tracking device from Geotab and Quickbooks to document personal use vs. business use.

The Ranger's GVWR is below 6,000 lbs, so I don't qualify for the accelerated depreciation/deduction schedule that one would get with say, an F-150 or F-250.

If it’s a legitimate business expense, you’re in the clear but those claiming it falsely run the risk of being found out.

while yo may not qualify for accelerated depreciation, you will get any shortfall on depreciation the year you turnover your vehicle.

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1 minute ago, jpd80 said:

What it boils down to is an opportunity to pick up more valuable sales with a well thought out package, truth is, something like a Fusion properly reworked as a white space crossover vehicle would allow Ford to continue with a near car that picks up sales with better ATP.

Part of increasing ATPs is going into a different market segment with less competition, especially one that is less commoditized.

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Or just simply following where your buyers are heading and what they’re asking for.

im not suggesting continuing with Fusion the way it is, careful reworked design could move the new package back into buyer’s radars offering something different to true Utilities without competing... a tricky thing I admit 

Edited by jpd80

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