ICYMI: Don't Extend the EV Tax Credit. End it now
It’s time to look seriously at getting rid of subsidies for products that are otherwise not in high demand.
Only in Washington would a congressional committee recommend a one-year extension of the tax credit for electric vehicles (in this case motorcycles) the day after General Motors announces it’s pulling the plug on the all-electric Chevy Volt.
Rep. Kevin Brady, R-Texas, the outgoing chairman of the tax-writing House Ways and Means Committee, generally opposes these kinds of special provisions. They’re bad policy because they distort activities in the marketplace. Nonetheless, it’s right there in the bill he has proposed.
What’s even stranger is that Congress signed off on phasing out this credit in its entirety in the 2018 tax bill. It’s an expensive write-off that mostly benefits the uber-wealthy, who buy electric cars as status symbols and tokens of environmental consciousness... Under current law, the tax credit for electric vehicle purchases phases out for each type of electric vehicle once its manufacturer has produced 200,000 units ... It’s clear from the numbers that market demand for these cars is pretty slow. It might have been higher back when a gallon of regular gas cost more than $4, but back then the technology never matched the hype.
This controversy over the electric car credit gives the retiring Sen. Orrin Hatch, R-Utah, currently chairman of the Senate Finance Committee, one more chance to be a hero ...