At least one group of needy Americans is getting timely government assistance during this recession — golf cart purchasers:
We thought cash for clunkers was the ultimate waste of taxpayer money, but as usual we were too optimistic. Thanks to the federal tax credit to buy high-mileage cars that was part of President Obama’s stimulus plan, Uncle Sam is now paying Americans to buy that great necessity of modern life, the golf cart.
The federal credit provides from $4,200 to $5,500 for the purchase of an electric vehicle, and when it is combined with similar incentive plans in many states the tax credits can pay for nearly the entire cost of a golf cart. Even in states that don’t have their own tax rebate plans, the federal credit is generous enough to pay for half or even two-thirds of the average sticker price of a cart, which is typically in the range of $8,000 to $10,000. “The purchase of some models could be absolutely free,” Roger Gaddis of Ada Electric Cars in Oklahoma said earlier this year. “Is that about the coolest thing you’ve ever heard?”
The golf-cart boom has followed an IRS ruling that golf carts qualify for the electric-car credit as long as they are also road worthy. These qualifying golf carts are essentially the same as normal golf carts save for adding some safety features, such as side and rearview mirrors and three-point seat belts. They typically can go 15 to 25 miles per hour.
The golf cart subsidies are a small but telling example of how interest groups can exploit the growth of government during crises for their own benefit, an issue I discussed in this series of posts, which also notes other dangers created by the expansion of government power in a crisis atmosphere.
Bruce Hayden says:
This must be popular in Sun City, Arizona, where driving a car is sometimes problematic with all the golf carts.
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October 18, 2009, 12:48 amCardinal says:
Why is this a “waste of taxpayer money?” Electric golf carts really do cut down on car pollution and the negative exernalities that pollution causes. For instance, my parents own a golf cart at their condo in Palm Springs — a condo in a golf community, but a mile or so from the first tee of the course. When they want to play golf, they don’t drive their car to the course, they ride their cart instead. Ditto for going to the gym, the grocery store, or elsewhere in the community. It adds up. (And to anyone who might say that it’s just as polluting to generate the electricity for all those golf carts, much of Palm springs’ electricity comes from the giant wind farm in the San Gorgonio Pass).
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October 18, 2009, 1:45 amBruce Hayden says:
And, I am sure that the windmills were totally built using energy from renewable sources too.
The answer though to your first point is that, while some people surely do use the golf carts to get around town, many likely use them for, well, playing golf. And, it is the idea that the taxpayers are somehow subsidizing the recipients of this largess playing golf is why, I suspect, some do not think that this was a good use of public funds, especially at a time like this, when we have the biggest deficit as a percentage of GNP since WWII, by a factor of two or three.
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October 18, 2009, 2:18 amMithras says:
So, if it had been a tax cut for the manufacturer, rather than a tax credit for the purchaser, would you have been as worried about a power grab in a time of crisis?
(And man, where were you when the USA PATRIOT Act was introduced? We could have use your freedom-lovingness then.)
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October 18, 2009, 2:28 amMahan Atma says:
Actually, you can blame a guy.
I’m pretty sure this is tax evasion, since there is no economic substance to the transaction. This type of lease-back scam has been identified as such by the IRS for years now.
I expect they’ll be knocking on his door any day now.
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October 18, 2009, 3:23 amJ. Aldridge says:
My mother lives there and it isn’t a problem. I prefer the gas powered golf carts over electric for street driving, especially at night.
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October 18, 2009, 3:33 amThe Volokh Conspiracy » Blog Archive » Cash for Golf Carts | BUY GOLF BALLS says:
[...] original post here: The Volokh Conspiracy » Blog Archive » Cash for Golf Carts Share and [...]
Ilya Somin says:
So, if it had been a tax cut for the manufacturer, rather than a tax credit for the purchaser, would you have been as worried about a power grab in a time of crisis?
As a matter of fact, yes. I oppose narrowly targeted tax cuts as well as similar rebates and tax credits. They are economically identical. This case, however, is a tax rebate, which is even worse than a credit.
(And man, where were you when the USA PATRIOT Act was introduced? We could have use your freedom-lovingness then.)
I wasn’t a blogger back in 2001, though I did oppose some aspects of that act. I also criticized the Bush Administration’s assertions of untrammeled executive power quite a few times right here on this blog, after I did start writing for it in 2006, e.g. here:
http://volokh.com/archives/archive_2007_08_19-2007_08_25.shtml#1187914017
If you had actually looked at my record rather than made baseless assumptions about what I think, perhaps you would have written a better comment.
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October 18, 2009, 4:52 amWarren says:
Not housing assistance, not more food programs or money to medicare, just golf carts. Golf carts. No wonder the health care public option was vote down in congress...
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October 18, 2009, 6:03 amDYSPEPSIA GENERATION » Blog Archive » Cash for Golf Carts says:
[...] Read it. The golf-cart boom has followed an IRS ruling that golf carts qualify for the electric-car credit as long as they are also road worthy. These qualifying golf carts are essentially the same as normal golf carts save for adding some safety features, such as side and rearview mirrors and three-point seat belts. They typically can go 15 to 25 miles per hour. [...]
Duracomm says:
Mithras said,
I mean really Ilya where were you when the Alien and Sedition Acts were passed???
Don’t you realize that your failure to comment on every stupid government action in the past means you can’t comment on any current stupid government action???
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October 18, 2009, 9:59 amOren says:
I always wonder in cases like these — why can’t Congress quickly (and likely unanimously) pass a one-line bill restricting the benefit with some appropriate criterion that excludes golf carts? Must be capable of 60mph, must weight XXX lbs, must be sealed to the outside, must be capable of traveling on the interstate, must have a range of XXX miles — it can’t be that hard to figure it out.
I mean, it’s impossible to write a statute perfectly targeting the thing you wanted, but it’s not impossible to pay attention so as to iteratively fix each abuse as it comes along.
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October 18, 2009, 10:45 amChrisTS says:
Ditto Oren.
Maybe not 60 mph, but why not 40 or 50?
The SC island we usually visit in the summer is increasingly a place where folks do all their driving in the carts. The fact that they cannot go as fast as regular cars is a safety bonus.
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October 18, 2009, 11:21 amDuracomm says:
Oren,
Some tweaking of the tax law might be helpful.
The problem is that more detailed tax regulation often create more potential loopholes and unintended consequences.
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October 18, 2009, 11:45 amDirty Democrats » Cash for Golf Carts says:
[...] Cash for Golf Carts: “ [...]
troll_dc2 says:
Ilya, have you see this proposed legislation? If cash for golf carts is bad, how about an INTENTIONAL deduction for pet owners? And the sponsor is an allegedly conservative Republican!
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October 18, 2009, 1:31 pmTweets that mention The Volokh Conspiracy » Blog Archive » Cash for Golf Carts -- Topsy.com says:
[...] This post was mentioned on Twitter by Steve, golf. golf said: The Volokh Conspiracy » Blog Archive » Cash for Golf Carts: The federal credit provides from $4200 to $5500 for .. http://bit.ly/2yeGOl [...]
Oren says:
But Congress doesn’t even try!
The problem is structural — Congress is geared towards passing new laws, not carefully monitoring and tweaking the ones they have passed. Fixing this is a one or two-liner, no more.
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October 18, 2009, 3:12 pmBruce Hayden says:
He is referencing the “Humanity and Pets Partnered Through the Years (HAPPY) Act”, H. R. 3501, “To amend the Internal Revenue Code of 1986 to allow a deduction for pet care expenses.”
I have to assume that Rep Thaddeus G. McCotter is serious here. And he has two sponsors, Reps. Steve Cohen (10/1) and Jared Polis (10/15), though I seem to remember Rep. Polis coming from Boulder. It seems to be gathering momentum with its two cosponsors signing on just this month.
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October 18, 2009, 3:51 pmChrisTS says:
HAPPY? Now that is embarrassing. (Although, $3,500 per year for any/all vet expenses isn’t much.)
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October 18, 2009, 5:14 pmtroll_dc2 says:
If the HAPPY bill gets enacted, this country, given its budget problems, will go to the dogs.
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October 18, 2009, 5:38 pmChrisTS says:
APPLAUSE!
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October 18, 2009, 5:53 pmTim says:
I own 2 golf carts that I drive around town in South Carolina. I use it to pick up my daughter at school instead of sitting in line with a car running and pumping out fumes. Most of the carts that qualify start at a price closer to $12,000. Standard cart don’t qualify for the tax brake. This site will help you learn more about golf carts.
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October 18, 2009, 6:51 pmSandy MacHoots says:
I had to blink a couple of times. We’re subsidizing the transportation of people who live in golf course condos so they can get to their tees?
And borrowing money to do it? It staggers the imagination.
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October 18, 2009, 7:11 pmTim says:
The carts that qualify don’t have the mounts to carry golf clubs.The are more car like. So this money won’t get used in that way.
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October 18, 2009, 9:06 pmMithras says:
Ilya–
I apologize for the PATRIOT Act remark. That was out of line.
I’m confused about your distinction between rebate and credit. Your linked article only refers to a credit; maybe you mean a refundable credit. Economically, they’re indistinguishable.
On the merits: Really, so what? The law says it has to be a street-legal vehicle. If a state says it’s street-legal, that’s it. (Federalism, you know.) One of the peculiarities of law is that when the language of a statute sets out certain criteria, then those criteria need to be applied in an even-handed manner, even if the result is aesthetically unpleasing to you.
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October 18, 2009, 9:14 pmChrisTS says:
So, the ‘golfcarts’ in question are not golfcarts? Just electric carts that look like golfcarts and/or are made by companies that make golfcarts?
So much for that red herring.
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October 18, 2009, 10:53 pmuberVU - social comments says:
Social comments and analytics for this post...
This post was mentioned on Twitter by GlockednLoaded: Your government at work. And we need more taxes? http://bit.ly/1FrVi4. WTF?...
NickM says:
ChrisTS — how hard do you think it would be to add the mounts?
Nick
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October 18, 2009, 11:57 pmMithras says:
I could add the mounts to a smart car or a Mini Cooper, too. Yet they would remain street legal cars. Just as these electric vehicles will.
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October 19, 2009, 12:11 amDon Miller says:
My State (Idaho) recently began street licensing of what used to be off-road type vehicles only. ATVs, UTVs, Golf Carts etc, call all be licensed for on-street use.
People in my town who lived near the golf course have long kept their golf cart in their garage and drove it to the golf course. Now the police are cracking down on them and requiring them to register it and get liability insurance on it. They are also giving tickets to unlicensed kids who are driving them. They should have been doing this all along, but it is nice to seem them doing it.
In return, I am seeing more and more Golf Carts and UTVs in the parking lot at the grocery store. Our local fire department is evaluating the cost effectiveness of using a UTV type vehicle for grass fire response and rescue situations. They weren’t interested two years ago because it would have to be trailered to a scene, but now that it is approved for street use, much more interest.
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October 19, 2009, 10:38 amKen says:
Well this is another great program from the Obama Administration with great ideas on how to stimulate the economy. Are golf carts made in the USA?
Ken
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December 11, 2009, 10:25 pmMargery Blake says:
Very informative post. I’m finding out more about becoming a better golfer from your site, then I’ve ever did from even my own golf instructor. Hope it’s ok that I share this post on Mixx?
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December 15, 2009, 7:12 pmAnna says:
A lot of people seem to be upset by the golf cart tax credit, but I have to admit that I don’t think it’s such a terrible idea. We got a golf cart a year or two ago to replace a farm truck and I’m pretty sure that it’s been as good a deal for the environment as it was for us. We barely have to charge it, and I’m sure the electricity we use per mile is a lot less damaging than the gas we used to use per mile.
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December 16, 2009, 11:55 amangel jones says:
Good overall site enjoyed reading will def bookmark.
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January 22, 2010, 4:17 amTerry Donahue says:
Check out our custom golf carts @ bigdogcarts.com
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February 1, 2010, 3:52 pm