In effect, the move provides more up-front revenue to the Treasury, but potentially at the cost of revenue over the long term as taxes paid when individuals make withdrawals from their 401(k) plans would likely be far greater.
Unlike the iPhone, which is subsidized by carriers in exchange for a long term contract, prepaid phones are typically sold for a modest up front cost, and service is paid for month-to-month.
There is no question that the up-front ticket price is the most important consideration today in China, not the cost per kilometer over the life of the vehicle.