Energy

Free Market Group: Stop Giving Handouts To Rich Tesla Drivers

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Jason Hopkins Immigration and politics reporter
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A coalition of 30 free market and conservative groups is calling on Congress to block an expansion of the electric vehicle tax credit.

“We, the undersigned organizations, write to strongly object to any effort to expand the current electric vehicle tax credit in any way. The justification for this tax credit was to spur innovation and encourage companies to offer electric vehicle options, not to permanently subsidize sales,” read a portion of the letter sent to the House Ways and Means Committee Chairman Kevin Brady on Wednesday.

The coalition — led by American Energy Alliance — includes numerous free market organizations such as Americans for Prosperity, Americans for Tax Reform, Competitive Enterprise Institute and others.

The federal government allots tax credits of $2,500 to $7,500 to buyers of electric vehicles (EVs). However, this credit caps off at 200,000 vehicles per manufacturer. Some lawmakers and EV lobbyists have proposed raising this limit, with a bill introduced by Democratic Rep. Peter Welch of Vermont calling for just that.

If any action should be taken on the EV tax credit, the letter argues, lawmakers should simply remove the EV tax credit altogether.

“The electric vehicle tax credit subsidizes expensive vehicles that only a fraction of wealthy Americans want and that do not necessarily pollute less than modern internal combustion engines,” said American Energy Alliance President Thomas Pyle in a prepared statement.

“Why should a typical middle class American family — with a median annual income of $44,000 — subsidize the lifestyles of the rich and famous? Political leaders should recognize that Americans can make their own decisions about how to spend their money and what cars they want to drive. We shouldn’t give handouts to wealthy individuals to help defray the cost of their luxury vehicles,” Pyle continued. (RELATED: Report: Costly Electric Vehicles Hardly Do Anything To Help The Environment)

Data on EV ownership gives credence to Pyle’s comments. A study by the Energy Information Administration found that the vast majority of households that own battery electric vehicles or plug-in hybrid electric vehicles have incomes greater than $100,000 while low-income households make up a small fraction of ownership. Thus, rich people are able to buy cheaper clean-air vehicles thanks to subsidies paid in part by less well-off taxpayers.

Other studies have also indicated that EV tax credits essentially serve as a tax on the poor to the benefit of the wealthy.

“Wealthy consumers who have purchased Teslas and Chevy Bolts primarily to signal their green bona fides for their friends and neighbors, and who have socialized many of the costs of their purchases to those who are less well-off, might wish to take a closer look at the numbers,” wrote Jonathan Lesser, the author of a May study that questioned the environmental benefits of electric vehicles. “Their hands may not be quite so clean as they believe.”

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