GOP Tax Bill Nixes Electric Vehicle Tax Credits And Reforms Other Energy Perks
The Republican’s tax reform bill would eliminate a $7,500 tax credits for customers purchasing electric vehicles like Tesla.
Supporters of the tax credit claim it helps reduce the price of gas-free vehicles for consumers and helped the electric vehicle industry expand. The hefty credit is limited to the first 200,000 vehicles a company produces but is scheduled to end in 2018.
Advocates have lobbied for months to keep the credit afloat. But the legislation, which seeks to slash the corporate tax rate to 20 percent from 35 percent and reducing the number of tax brackets for individuals, would likely dash their hopes of keeping the gravy train on its tracks.
“Electrification for vehicles is extremely important for the future of the auto industry, particularly given the fact that as we move towards autonomous, self-driving vehicles,” Michigan Sen. Gary Peters, a Democrat, told reporters on Wednesday. “That tax credit is really important for moving this technology forward.”
Data show that the elimination of the tax credit could be a death knell for companies like Tesla, especially considering the Silicon Valley automaker’s inability to mass produce vehicles at the scale of its larger competitors. The company relies heavily on the credit for survival.
A July 10 data analysis from The Wall Street Journal, for instance, shows that there were no new Tesla Model S sedans and Model X SUVs registered in Hong Kong the month after that country revoked the tax credit.
There were 2,939 Tesla vehicles registered in March before the April 1 redaction of the credit, according to the WSJ, and nearly 3,700 entering the department’s books for the first quarter of 2017. The end of the tax break was announced in February.
Republicans are hoping to ax other energy-related credits to help pay for the bill, that some Democrats and critics argue could increase the deficit $1.5 trillion over the next decade. The legislation also reforms other energy-related tax credits.
It would repeal an inflation increase for renewable energy production tax credits, a move that would increase taxes for power sources like wind, solar, and biomass forms of energy. The move is projected to raise $12.3 billion in new revenue over a decade.
Republicans want to sacrifice green energy subsidies on the back-end for reduced income tax credits on the front end.
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