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Climate XChange Carbon Pricing Awareness Raffle -- Grand Prize Model X (or S)

Climate XChange Carbon Pricing Awareness Raffle -- Grand Prize Model X (or S)

Dear Model X Forum Reader,

Please notice the Climate XChange Carbon Pricing Awareness Raffle at http://www.climate-xchange.org/tesla-raffle.

Raffle includes 6 great prizes that fit the theme of lowering carbon emissions. Grand Prize is a Model X or S ($110K value), plus Climate XChange pays a ton of the taxes (another $37K) that come with winning such a big prize. The idea is that anyone can afford to win rather than get socked with huge tax bills. Tickets available now, drawing will be held December 31, 2015.

I realize that the current round of X's are priced above $110K but (a) expect that by the drawing date Tesla will have an S90D configuration for the Model X and (b) in any case, you can apply the Prize towards whatever configuration of Model X you like, and then toss in your own funds if you wish.

The money goes towards education and advocacy for implementing carbon pricing in the form of revenue-neutral fee-and-rebate in Massachusetts. Help Massachusetts set an example that others may then choose to emulate.

Also, for an article on this written by technology, environment and automotive writer Steve Hanley, see: http://www.teslarati.com/tesla-raffle-looks-raise-awareness-global-clima...

Thanks,
Alan (aka Pollux on teslamotors.com and telsamotorsclub.com)

Pollux | October 9, 2015

*bump* to get the attention of some person who might just win an awesome Grand Prize! :-)

Pollux | October 13, 2015

bump

GLO | October 13, 2015

Interesting...

Pollux | October 13, 2015

Yeeeeeeesssssssss........? :-)

tomgibson9 | October 14, 2015

Great idea. Does anyone know whether the $250 is tax deductible?

Pollux | October 14, 2015

Hi, @tomgibson9,

I do know, and I'm afraid I don't like the answer and neither will you.

In short: a raffle ticket is NOT tax deductible.

The IRS regards it as a "thing of value" rather than as a donation. Thing of value: you are buying a chance at a prize (in this case, 6 prizes); you can get something back for your expenditure. Donation: essentially a gift, you will get and expect nothing in return.

Believe me, I wish I could tell you otherwise.

The one exception to this is when Climate XChange pays the winner's taxes for the Grand Prize; the net value of the Prize to the winner may be decreased by the amount the winner has spent on the raffle ticket, i.e., by $250. So instead of paying taxes on, for examples, $110,450, Climate XChange will pay on behalf of the winner taxes against the amount of "only" $110,200. (And if the winner were paying those taxes directly, the winner would also be able to deduct the cost of that $250 ticket from the tax calculation.) Now that's a relief, right?

Alan

jimvan | October 14, 2015

We bought one ticket. A one in two thousand chance - not bad! (And a donation to a climate change prevention project no less.)

johnse | October 14, 2015

I am not an accountant or a lawyer, but my understanding of any of these "pay your taxes" situations (whether it's this raffle or the appliance store having a tax holiday sale) is that they adjust the award in such a way that when you pay your taxes, you get the promised amount (or the promised savings).

Given the numbers above, they are assuming that your marginal tax rate is about 25%. Total value of the cash and prize is 147K. 25% taxes on that amount is 37K.

So your taxes do go up. You pay them. They just increase the prize enough so that they "pay them for you".

aesculus | October 14, 2015

And then there is AMT :-)

Pollux | October 14, 2015

Hi, @jimvan,

Thanks for your confidence in Climate XChange... and for your support of our raffle!

Alan

Pollux | October 14, 2015

Hi, @johnse,

Well... I am certainly not an accountant or a lawyer, either. But I *think* maybe we are saying the same thing. If you were to receive the Grand Prize without any tax considerations, the value is $110,450 (well, OK, that includes $5K cash to you to use for your state taxes but you could also use it to pay for a new washer/dryer combo I suppose, along with the car, the HPWC and the electrician). You would have to pre-pay to Climate XChange 25% of that amount for federal withholding taxes, which CXC would then forward to the US Treasury / IRS.

For CXC to pay the taxes on your behalf, we have to come up with 33.33% of that same $110,450. That includes the taxes that would be withheld, plus the taxes that would also be incurred because the winner ALSO now has a "gift" of the taxes that we paid. I think this is called "grossing it up". And the amount we have to pay is dictated by a formula set by the IRS. (You can find the citations on the raffle website in the Legal Details section and also probably in one of the Prize sections as well.)

"We", as in Climate XChange, assume nothing about the winner's marginal rate. We simply follow the dictates that the IRS lays down. This is one reason why we make NO PROMISES about your ULTIMATE tax situation, because it's just impossible to figure out in advance. We're pretty confident that we're taking a huge whack out of your "pain", hopefully all of it, especially when you factor in the $7500 federal tax credit you'll be able to use and any state tax credit as well. (Your mileage may vary, maybe you won't owe enough taxes so that you won't get the full benefit of the credits but then again that sounds to me like you're coming out a Winner of the Grand Prize and without any significant remaining tax burden.)

So at the end of the day, I think we are agreeing that the taxes belong to the Winner; but CXC is stretching hard to take care of as much of that issue as it can.

Oh, and @aesculus -- um, yeah, of course there's AMT. Again, we don't know your tax situation and can't promise you perfection. But I guess if you're really concerned, we can always give you the option to turn down having us pay off those taxes as part of the Grand Prize, if you're the winner. Or you could choose to take the alternative cash prize of $100,000 if that is of more use to you. I don't understand what corollary or implication you are trying to make when you point out the existence of AMT, but I certainly agree with you that it exists. :-)

Alan

AlMc | October 14, 2015

Bought one yesterday.......Feeling lucky :) AND a great cause.

KyleGoss | October 14, 2015

Looks like 266 tickets sold so far .. still 601 left to go before they make the minimum 867 for the Model X Grand Prize part of the raffle. Quite a bit of time left before the drawing though.

Pollux | October 14, 2015

Hi, @AIMc,

Way to go! Thanks!

Hi, @KyleGoss,

Nice try. :-)

Alan

aesculus | October 14, 2015

Pollux: No harm intended and I think you have a great program. The AMT point, and what you stated in that you cannot predict anyone taxes, is that IF you are near enough for AMT to kick in (and that could be the case with anyone here who wins), your taxes would not be at the rate you usually expect, but could be altered dramatically by AMT.

AMT is one of those IRS surprise benefits many never see or even comprehend unless they have seen it before or have a tax person monitoring their situation in near real time. It can become a shock to someone who thought the taxes you paid would cover the additional tax burden, but then AMT kicks in and then causes them to pay more on their regular income too.

But in the end of the day even with additional taxes, the fact you are providing them with a car and the additional tax payment makes this a great deal.

Pollux | October 14, 2015

Hi, @aesculus,

I agree that AMT can be a troubling surprise, especially as AMT begins to affect more and more people.

I really don't know how I could guard against that possibility -- and obviously at this point won't be making any changes like that in this raffle -- but would welcome suggestions in case of a hypothetical future raffle.

Thanks,
Alan

aesculus | October 14, 2015

@pollux: Nothing for you to do. I am regretting even posting the comment now :-(

I actually got effected by a 'surprise gift' like yours once and that is why I am so hyper and probably over reacted. I had to take out a loan to make up the difference to the IRS.

BTW you are doing way more than other people would do. I am surprised by the people on TV who win awards that are overly inflated and then have to pay the taxes on the stated amount. Sometimes the taxes are more than the actual value of the win.

This is definitely not the case in your contest.

KyleGoss | October 14, 2015

@Pollux,

Nice try of what? I was just analyzing how many tickets have been sold so far and making a note that the Model X will not be given away if enough tickets are not sold. I'm not doubting that you'll get there, but I do think it's important that people know it will be a 50/50 cash raffle if not enough tickets are sold.

Pollux | October 14, 2015

@KyleGoss,

Nice try at estimating the tickets sold! :-)

Alan

P.S. Please feel free to steer people to the website if they want to know more... there's a LOT written about the prizes and conditions and whatnot...

KyleGoss | October 14, 2015

If more tickets have been sold then you need to fix your validation rule on adding tickets to your cart. You can currently add 1733, but not 1734. Looks like another ticket sold in the past few hours. I guess maybe you have some other channels besides the website where you are selling tickets.

Pollux | October 14, 2015

Hi, @KyleGoss,

You are correct, you can't accurately infer the sales from the validation rule. Some kind of accident, no doubt. :-)

Alan

KyleGoss | October 14, 2015

Fair enough. Best of luck with your raffle, but I do believe you should be a little more up front with the availability of your Grand Prize and not hide it in "Legal Details". Perhaps a countdown of tickets that need to be sold for the Grand Prize to be available.

johnse | October 15, 2015

@pollux
Yes, we were saying the same thing and I think you are very much doing the right thing by the winner.

Pollux | October 15, 2015

Hi, @KyleGoss,

Actually, I quite agree with you about having people have to go through all of the Legal Details to figure out what's going on. The Legal Details are meant to be comprehensive, as it's simply not possible to put all information into a flat format, in roughly a screen's size, in front of a reader.

That said, you'll find an entire clickable section, displayed prominently as part of the list describing the details of every single prize, entitled "Alternate Cash Prizes and Raffle". This section describes how a winner may choose cash prizes instead of the listed prizes; and also how the raffle is a 50/50 cash raffle until the raffle makes available the full prize set. From 866 tickets on down, the raffle basically splits the proceeds between the prize pool and Climate XChange. In fact, the raffle even guarantees a minimum of $20,000 in the prize pool, no matter what, from ticket #1 onwards. In that case, the raffle relies on a guarantee from an anonymous board member as proceeds from the raffle ($250) wouldn't begin to cover expenses plus prize pool.

I confess that, even though I worked all this out (with considerable help from an attorney), I'm not at all a fan of the cash raffle. If I had prize donors, I'm not sure I'd even bother with putting a cash raffle into the rules. It's actually a very common device in raffles, but I'd much rather award the Grand Prize and the associated prizes. A cash raffle isn't very appealing for a group that's looking to RAISE the profile of carbon pricing and offering associated no-carbon emission prizes.

Finally, I hope it's reasonably clear that Climate XChange is trying to be the most transparent raffle out there. I think if you look at other raffles, you're going to find that they describe much less, and do so much less clearly. If you have an example of a raffle that you believe to be more transparent, please send it to me so that I may learn from it. And if you see a hole in the disclosure, please let me know; it may even be something that I would choose to remedy now. All that said, Climate XChange (and I) ultimately have to make choices about how to organize and disclose everything on the website, and there will be occasions when the choices we make may not align with your preferences.

I hope after all this you'll consider purchasing a raffle ticket! :-)

Best,
Alan

Pollux | October 15, 2015

@johnse, thanks for the kind words!

Alan

Pollux | October 15, 2015

P.S. @KyleGoss, I actually really appreciate your last reply! I was beginning to feel like you were raining on my parade but now I see that you were concerned that important matters were not adequately disclosed. I would use your words, then: "fair enough". :-)

Alan

KyleGoss | October 15, 2015

You certainly are being transparent and thorough. I'll admit I hadn't read all of the sections on the website, there is a ton of information! It was just my initial reaction that it took a little digging to find out whether the Grand Prize would be included in the raffle. I do see that information in the Alternative Cash Prizes section as well. I'm impressed you included your expenses as well, I'm sure that lawyer wasn't cheap (unless someone did the work pro bono..)

I also see you now limit online ticket sales to 20 to prevent people from seeing tickets remaining, smart move :) After all, buying 1,000 tickets would be a bit daft.

RonaldA | October 16, 2015

Picked up two, good luck everybody!

leh22a | October 16, 2015

I got 2 as well! To the cause!!!

Pollux | October 17, 2015

@RonaldA, @Ieh22a -- THANKS!! We will make you proud!

I'm writing this as I listen to my wife, Jessica, President of Climate XChange, talk about a meeting coming up with one of her staff, one of her ex-staff, and one of the powerhouse Senators who has recently introduced some positive new legislation... plus Senate Bill S.1747, "An Act Combating Climate Change", which proposes a carbon-fee-and-rebate-all-the-proceeds-back-to-the-people plan, is now on the agenda for public discussion by the joint Telecommunications, Utilities and Energy committee on Tuesday, October 27, 1 p.m., hearing room B-1, MA State House. **44** co-sponsors! Anybody on this thread who wants to demonstrate support -- and believe me, this is the kind of thing that needs public support, it ain't gonna be getting a groundswell of enthusiasm from the MA Auto Dealers' Association or the natural gas power plant guys -- should come to this review. I know it isn't easy to do in the middle of the day, but then again, the committee members know that, too, so people who show up really matter. You could even give testimony if you want to -- who you are, why you think this is important, etc. Even if only for 1-2 minutes!

And you wouldn't believe how noticeable this raffle thing is... a "carbon pricing" raffle?!?! Offering WHAT kind of Grand Prize? Including Taxes?!?! What IS this carbon pricing thing and WHO ARE these people?!?! Double-whammy: attention-getting for the issue, funds for the organization.

Thanks again,
Alan

Pollux | October 17, 2015

bump

Pollux | October 18, 2015

bump

Pollux | October 26, 2015

bump

Pollux | October 26, 2015

blimp

Pollux | October 29, 2015

ba-bump!

jimvan | October 29, 2015

Is there anyplace to be able to see how many tickets have already been sold? (I have one.)

Pollux | October 30, 2015

Hi, @jimvan,

At this time, I'm not publishing the ticket sales data. While I hope you find that the raffle is as transparent as can be about rules, prizes, details, alternatives, blah blah blah (as visible on the raffle website), I am a bit flummoxed by the issue of publishing the ticket sales numbers. Is it motivational for people? De-motivational? Satisfies simple curiosity? When is the best time for me to publish this information to gain maximum attention for the raffle (and by association, carbon pricing)?

Anyway, there's no hidden corner in which to find the raffle sales data except in the CXC database itself. I'll probably publish the data at some point, I just don't know when.

Thanks for asking!

Alan

P.S. Raffle sales have been good (whew!), and soon you will probably see other articles, FB posts, ads and whatnot. Bear in mind that our goals from highest to lowest priority are (1) attention on carbon pricing, (2) attention on MA Senate Bill 1747, which implements a carbon pricing fee-and-rebate system and is working its way even now though the MA legislative process, (3) raise the profile of Climate XChange and (4) raise revenue. The raffle is a good way to gain attention for the organization and the issue. And I have a personal, fierce goal: put someone in a Tesla!

jimvan | October 30, 2015

Thanks for the response, Pollux (Alan). I was thinking the numbers would be motivational to push ticket sales for all the goals you outlined, but I could, of course, be completely off base. Thanks for your work. Jim

Pollux | November 6, 2015

big ol' weekend bump!!

NumberOne | November 19, 2015

@Pollux - No more bumps? I got a ticket. I figure it is for a good cause and why not. I have waited more than 3 years, so this would really be icing on the cake for me.

Let us know when 2,000 tickets are sold. Not when the threshold is reached to actually deliver the grand prize. If fewer than the maximum is sold, it would be nice for you to let us know on the forum after the drawing, since we like to get updates.

Pollux | November 20, 2015

Hi, @LeonardD,

Bumps... I'm bouncing back and forth between FaceBook, teslamotorsclub.com, teslamotors.com, and various other fora and engagements that I'm finding it hard to keep up! I shall endeavor to be a more faithful bumper. :-)

I've been wondering why the raffles I found in my research never seem to disclose the final number of tickets that they sold. I make no promises about what we'll disclose from the Carbon Pricing Awareness Raffle when we're all done, but then again, we've disclosed so much, so comprehensively, that I certainly lean towards disclosing all the rest ultimately. Maybe there's some giant IRS troll that pops out to attack raffle sponsors if you publicize the number of tickets sold? I have no idea.

The big thing you may be sure we will disclose is the list of prize winners. Possibly their pictures, too, as we require permission to use the winners' likenesses as a condition of winning a prize. We want everyone to know who won! And not at all incidentally, the opportunity to drive another round of attention to the carbon pricing issue.

I've been thinking about what we might do with the Grand Prize winner. Posing with his/her family? A video interview of the winner, wherein the winner recounts the gripping story of how she/he decided to purchase a ticket, followed by the subsequent agonizing wait, and then the excitement of the drawing? Perhaps with a special segment, where the winner declares that the fact that Climate XChange paid off the withholding taxes meant that the winner's graduating senior will be able to go to college after all rather than losing the college fund to paying off taxes.

Alan

MyXinTx | November 21, 2015

This is a no-brainer.

Thanks for making it happen and announcing it on this forum.

Best of luck to all ticket holders...

Pollux | December 8, 2015

Hi, @WaitN4myX,

Thanks for the kind words!

Alan

Pollux | December 8, 2015

This is FYI.

On the S version of this thread, @pac wrote:

pac | DECEMBER 7, 2015
Looks like they did! Or at least they dropped that rule.

"As of December 3, 2015, Climate XChange determined that there were no longer any special cases for ticket sales between 1-299 and 300-866. The full set of Grand Prize and the 5 Special Prizes will be made available regardless of how many tickets have been sold to date and regardless of how many more tickets may be sold between this date and the conclusion of the raffle. We are striking out the text below that previously described special cases that are no longer applicable."

And I followed up with:

Pollux | DECEMBER 8, 2015
Hi, @pac,

Yup, the special cases for 1-299 and 300-866 ticket sales are gone. I hated those rules anyway, so good riddance to bad rubbish. :-)

I'm still not reporting raffle ticket sales numbers, although who knows, maybe I'll wind up doing that at some point, too. :-)

Thanks,
Alan

Pollux | December 8, 2015

Hi, folks,

For your amusement and/or edification:

1. Video of Senator Mike Barrett of Massachusetts discussing carbon pricing.

https://vimeo.com/weisswomanprodns/cxcraffle

2. Video of Climate XChange Carbon Pricing Awareness Raffle launch on Sep 26.

https://vimeo.com/143724931

Thanks,
Alan

MyXinTx | December 9, 2015

Alan, does my ticket number reflect the number of tickets sold to date?

If so, are you preferring that I do not share that number?

I am please that those rules have been dropped.

Is it OK to know who is funding the prizes or is that info confidential?

Just trying to asses if I want to purchase more tix.

AlMc | December 9, 2015

I have two tickets already but would like to see my odds of winning lowered by Alan selling more tickets....

BUMP

ian t.wa.us | December 9, 2015

Bump. Ticket bought.

Glad I finally read this thread!

kittylitter | December 9, 2015

I just bought two!

Good cause and GREAT 1st prise!

The rest of you should be checking out prises 2 through 6, they are nice,too.

Sorry!

AlMc | December 9, 2015

OK. If Kitty Litter bought two, I am going to buy a third.

Kitty...If I win, your litter on me for 1 year! :)

Bump...........

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