Michigan might ban direct auto sales

[shortylickens]

http://www.forbes.com/sites/micheli...l-michigan-ban-tesla-from-selling-cars-there/


They've been threatening this for a while, but it looks like they are finally pushing a bill to make it happen.


I think maybe we could reduce costs if auto makers sold direct. Of course, thats not what they would want.

 

[Fern]

http://www.forbes.com/sites/micheli...l-michigan-ban-tesla-from-selling-cars-there/


They've been threatening this for a while, but it looks like they are finally pushing a bill to make it happen.


I think maybe we could reduce costs if auto makers sold direct. Of course, thats not what they would want.

The Liberal argument says no, the auto company will just keep the same prices and make more profit.

States have a compelling interest in not allowing direct sales. It may cost them tax revenue. E.g., if I make a widget and sell it/ship it to you for $10 profit my state gets the income tax, not yours.

So auto dealers pay income tax in the state where they are located. Auto makers selling direct would pay income tax to their state (generally, the rules can get a bit complicated).

Fern

 

[ElFenix]

The Liberal argument says no, the auto company will just keep the same prices and make more profit.

what makes that a liberal argument?

 

[Fern]

what makes that a liberal argument?

That they keep using it?

Fern

 

[ElFenix]

That they keep using it?

Fern

where? seems more like a car dealer's argument.

 

[Fern]

where? seems more like a car dealer's argument.

In general whenever there's a discussion about reducing costs. E.g., reduce taxes (income, sales, whatever) when one claims the product could then be sold for less they usually counter that no, the business will keep more profit.

In any case it's not that important. There's a whole range of issues surrounding direct sales of auto's. We've been through the sublect a few times here already.

Fern

 

[shortylickens]

Sorry, I meant Price.


Sellers would be forced to reduce Price to compete. They would likely have to reduce their costs as well, but not necessarily.

 

[Fern]

Sorry, I meant Price.


Sellers would be forced to reduce Price to compete. They would likely have to reduce their costs as well, but not necessarily.

Why would direct sellers be forced to reduce their price?

Fern

 

[shortylickens]

Why would direct sellers be forced to reduce their price?

Fern

Increase of supply to consumers with no change in demand. People could get exactly what they want with no middleman.

 

[Thebobo]

Why would direct sellers be forced to reduce their price?

Fern

cause Liberals?

 

[OutHouse]

cause Liberals?

damn liberals.

 

[MooseNSquirrel]

In general whenever there's a discussion about reducing costs. E.g., reduce taxes (income, sales, whatever) when one claims the product could then be sold for less they usually counter that no, the business will keep more profit.

In any case it's not that important. There's a whole range of issues surrounding direct sales of auto's. We've been through the sublect a few times here already.

Fern

Please expound on this profound insight.

Examples would be helpful

 

[ivwshane]

Please expound on this profound insight.

Examples would be helpful

I'll expound for you...CBD in full effect!

 

[Exterous]

I think maybe we could reduce costs if auto makers sold direct.

Thats only if the auto manufacturers have any interest in selling direct. Since this wasn't banned before but hasn't reduced prices I don't think there is a very good chance removing this will create a benefit. Maybe if there was some serious competition that forces them too but I don't think Tesla has that kind of power other than in a niche segment

 

[unokitty]

When I lived in Okinawa, I bought my Honda directly from Honda motor corp...

Was happier with that transaction than with either of the two Hondas that I've bought from US dealers.

Change is hard though. And it might be too hard for Michigan at this time.

Nonetheless, I don't think that Tesla is having any problems selling as many cars as they can make.

Uno

 

[Genx87]

Cant anybody think of the car salesman? Oh wait Michigan and NJ have. If there is one profession that is noble enough to have govt protect. It has to be the car salesman.

 

[fskimospy]

In general whenever there's a discussion about reducing costs. E.g., reduce taxes (income, sales, whatever) when one claims the product could then be sold for less they usually counter that no, the business will keep more profit.

In any case it's not that important. There's a whole range of issues surrounding direct sales of auto's. We've been through the sublect a few times here already.

Fern

What's interesting is that I'm pretty sure I've seen you make an identical argument the opposite way, that tax increases are invariably passed on to consumers. Very convenient how you seem to believe that only works one way.

The increase or decrease in costs to a consumer based on transaction or production cost changes has a lot to do with how competitive a marketplace is.

 

[TechBoyJK]

Meanwhile

http://freakonomics.com/2014/10/16/...many-teslas-a-new-freakonomics-radio-podcast/

Norway subsidizes Tesla by waiving sales tax, permitting use of a bus lane, and offering free parking in public lots.

 

[BoberFett]

The complexity of "liberal" allegiance is difficult to understand. "Liberals" tend to hate places like Amazon and WalMart because they're big and put Main Street out of business. But their hatred for auto dealers overrides their love of small, overpriced local businesses.

 

[fskimospy]

The complexity of "liberal" allegiance is difficult to understand. "Liberals" tend to hate places like Amazon and WalMart because they're big and put Main Street out of business. But their hatred for auto dealers overrides their love of small, overpriced local businesses.

Your mistake here was thinking that trade protectionism is a liberal value. It isn't.

Disliking the costs that Walmart inflicts on taxpayers is not the same as supporting protectionism like this.

 

[bshole]

The complexity of "liberal" allegiance is difficult to understand. "Liberals" tend to hate places like Amazon and WalMart because they're big and put Main Street out of business. But their hatred for auto dealers overrides their love of small, overpriced local businesses.

Pretty sure EVERYBODY hates auto dealers! LOL....

 

[CLite]

The Liberal argument says no, the auto company will just keep the same prices and make more profit.

States have a compelling interest in not allowing direct sales. It may cost them tax revenue. E.g., if I make a widget and sell it/ship it to you for $10 profit my state gets the income tax, not yours.

So auto dealers pay income tax in the state where they are located. Auto makers selling direct would pay income tax to their state (generally, the rules can get a bit complicated).

Fern

If we do engineering work in states where we don't have an office we still have to file a tax return with that state and pay taxes on earnings we accrued there.

I know athletes/performers have to file income tax returns with every state they play in.

I highly doubt car companies are any different, if Tesla sells a car in a state they don't have an office it I would bet a lot of money on the fact they will have to file for revenue taxes in that state.

 

[BoberFett]

Your mistake here was thinking that trade protectionism is a liberal value. It isn't.

Disliking the costs that Walmart inflicts on taxpayers is not the same as supporting protectionism like this.

And so eliminating the middle man fixes all ills?

 

[smackababy]

If we do engineering work in states where we don't have an office we still have to file a tax return with that state and pay taxes on earnings we accrued there.

I know athletes/performers have to file income tax returns with every state they play in.

I highly doubt car companies are any different, if Tesla sells a car in a state they don't have an office it I would bet a lot of money on the fact they will have to file for revenue taxes in that state.

How do automakers file taxes when they make sales to dealers? The consumer already pays the sales tax, unless they defer that to the dealer, who then pays it for them, on the final sale. The automaker would still be paying the same taxes on profits made by selling cars, except the state would lose the tax from the profits of the dealerships.

The problems with completely eliminate dealerships goes beyond tax reasons though. If there is no local (or reasonable local) certified dealership, where are you supposed to get your car serviced for recall and warranty issues? Or even serviced by someone you know is certified to assess that specific brand of car? There aren't exactly Tesla certified mechanics advertising as such, and every dealership has one.

I think banning direct sales is stupid though. We don't ban Apple from selling iPhones or Panasonic from selling TVs.

 

[ElFenix]

The problems with completely eliminate dealerships goes beyond tax reasons though. If there is no local (or reasonable local) certified dealership, where are you supposed to get your car serviced for recall and warranty issues? Or even serviced by someone you know is certified to assess that specific brand of car? There aren't exactly Tesla certified mechanics advertising as such, and every dealership has one.

because you have to have dealers to have service centers. obviously that's the only way to do it.

http://www.teslamotors.com/findus/service