Posts Tagged ‘Wasteful Spending’
February 22nd, 2019 at 6:21 pm
Time to End the Federal Government’s Wasteful Electric Car Tax Subsidy Program
Posted by Print

Whatever one’s opinion of electric automobiles, all reasonable people can agree that the federal government shouldn’t be wasting billions of dollars to pick winners and losers in a functioning market.

That’s especially true when nearly 80% of the federal subsidies go to households earning over six figures, making it essentially a regressive tax in addition to wasteful spending and a market distortion.

But that’s precisely what the existing federal electric vehicle tax credit does.  In 2008, President George W. Bush signed into law a bill passed by the Nancy Pelosi/Chuck Schumer Congress to provide $7,500 tax credits for the purchase of electric cars.  Shortly thereafter, Barack Obama extended that credit to cover the first 200,000 electric autos sold by any and all car manufacturers in the United States.  By 2017, the total cost exceeded $2 billion.

And here’s the real kicker, as captured by Congressman Jason Smith (R – Missouri):

Currently, the electric vehicle tax credit rewards buyers of electric vehicles with up to $7,500 in taxpayer-funded subsidies.  Unfortunately, the vast majority of the credits have been rewarded to people who don’t need government assistance to purchase vehicles, as 80 percent of the subsidies are given to people making more than $100,000 per year.”

But believe it or not, some in Congress actually seek to expand this indefensible program.  Under their plan, all existing caps would be removed, which the Institute for Energy Research estimates would cost an astonishing $95 billion between 2020 and 2035, and costing every American household up to $70 per year over that 15-year stretch.

But Congressman Smith and Senator John Barrasso (R – Wyoming) offer different and better legislation.  Their Fairness for Every Driver Act would eliminate the tax credit scheme for high-cost electric cars and save billions of taxpayers dollars:

The legislation would help fund new infrastructure projects by requiring users of alternative fuel vehicles to contribute to improving the nation’s roads and bridges…  Eliminating the electric vehicle tax credit is estimated to save taxpayers $20 billion over the next ten years.”

“Gas, electric and alternative fuel vehicles all use the same roads and put the same amount of wear and tear on those roads,” Senator Barrasso notes, and “every driver should contribute to maintain America’s highways.”

He’s right, and it’s time to put an end to this wasteful, market-distorting subsidy to wealthy car buyers.