Electric Car Tax Credit Bill Will Cost $16B, Critics Say
An extension of a consumer tax credit for electric vehicle purchases sought by a bipartisan contingent of lawmakers could cost as much as $15.7 billion, according to an analysis prepared by opponents of the effort.
The analysis of legislation by Senator Debbie Stabenow, a Michigan Democrat, to grant automakers a $7,000 tax credit for an additional 400,000 vehicles was commissioned by American Fuel & Petrochemical Manufacturers, a Washington trade group.
The current $7,500 per-vehicle incentive for consumers, credited with helping establish the nascent market for electric cars, phases down once a manufacturer sells 200,000 of the vehicles.
Stabenow’s bill would allow the automakers to exceed the cap and also extend a credit for hydrogen fuel cell vehicles for 10 years.
“This study confirms that expanding the EV tax credit would make an already expensive and inefficient policy even more burdensome for U.S. taxpayers,” said Chet Thompson, AFPM’s president and chief executive officer. “Simply put, working families should not be asked to subsidize luxury vehicles for the wealthiest among us.”
Backers of the bill, which include Republican Senators Lamar Alexander of Tennessee and Susan Collins of Maine, say the legislation would reduce carbon emissions that cause climate change.
Representative Dan Kildee, a Michigan Democrat, has introduced companion legislation in the House.
“At a time when climate change is having a real effect on Michigan, today’s legislation is something we can do now to reduce emissions and combat carbon pollution,” Stabenow said when she introduced the measure in April. “Our bill will help create American jobs and cement Michigan’s status as an advanced manufacturing hub.”
Provided By: Accounting Today