Save Billions by Ending Electric Vehicle Subsidies for Wealthy
If the White House and Congress are looking for a place to cut, how about ending the $7,500 electric vehicle (EV) tax credit for those making over $200,000 a year?
The Congressional Budget Office recently reported that federal EV subsidies will cost taxpayers about $7.5 billion over the next few years. The majority of those buying costly "green" vehicles, like General Motors' Chevy Volt, are making far more money than the average American. Why should those that can afford to buy these green toys get reimbursed $7,500 each as the nation is going broke?
Does anyone really think that the dismal electric car sales will get that much worse if we remove the handouts? I believe most of the ideological and rich folks who buy a $40,000 Volt, much less a $100,000 Tesla or Fisker, would have bought the car even without the subsidies. Isn't it time to transition the wasteful green initiatives that beget failing ventures like Solyndra from a costly government sponsored quest to a privately-funded industry that will be based on free-market logic? While we're at it, subsidies for oil companies can be put on the chopping block as well.
The one most important consideration when determining where to cut spending or where to raise revenues should be a cost versus benefits analysis. The CBO report on EV subsidies admits that the lost tax revenue is doing very little to improve our environment or lessen oil dependence. If proponents of such wasteful policies can not bring themselves to end the subsidies all together, at least end them for the wealthiest Americans. This will give Democrats the tax revenue increase on the rich that they seek.
There are areas on the spending side that should be addressed as well, including wasteful spending by our Defense Department as, it too, seeks to go green. As America was running out of money (or more aptly put, having to print it as fast as it was spent), the US Air Force was spending $59 a gallon for bio-fuel when it could have purchased fuel for about one tenth that amount. Not surprisingly, according to Breitbart.com, the venture capitalists behind the green corporation that received millions of dollars for fuel were heavy donors to those that are in charge of doling out the taxpayers' money. CNN.com also ran a piece on how, "The Defense Department has a grand vision for the U.S. military's energy future, including 'green'-powered fleets, jets and trucks."
Of course, no green plan for the military would be complete without supporting the ever-struggling Chevy Volt. Stripes.com reported on the military's plans to buy Chevy Volts last August. This is precisely the type of government waste that needs to be eliminated. There is no reason that our military should not have to tighten their purse strings along with the rest of struggling Americans. We can no longer afford to so blatantly waste taxpayer money on programs that benefit no one other than GM executives who refuse to admit that the demand for cars like the Volt is not what it was represented to be.
Even Toyota and Nissan recently backed off of their electric car development plans and admitted that, in the words of Toyota Vice Chairman Takeshi Uchiyamada, "Because of its shortcomings - driving range, cost and recharging time - the electric vehicle is not a viable replacement for most conventional cars; we need something entirely new." Uchiyamada is considered the "father of the Prius." If such credible sources as these admit the shortcomings of EVs, why won't our leaders back off of the insane and costly quest to electrify America's auto fleet? At the least, Republicans should use the sequester showdown to finally address one of the most wasteful government agendas to date. The country's budget crisis is likely to put America at risk long before before climate change would. It is time to ask how much, if any, benefits we are getting for the billions of dollars thrown away on green subsidies; regardless of whether you consider ending the waste a tax increase or not.
Mark Modica is an NLPC Associate Fellow.