Driving change: Why the Clean Vehicle Tax Credits need to go

Congress has a chance to offer Americans real relief — and eliminate a green boondoggle in the process.

The 2017 Trump tax cuts reduced the family tax burden by $1,500, lifted 6 million Americans out of poverty, and delivered record-low unemployment. But as key tax cuts are scheduled to expire at the end of the year, some are pushing tax hikes to cover the cost of extending them — despite the economic consequences.

Tax hikes slow growth, shrink opportunity, and cost jobs. After four years of Bidenomics and with Americans still suffering the effects of inflation, raising taxes on anyone should be off the table.

If Congress needs to offset the cost of extending expiring tax cuts, it should start by rolling back Joe Biden’s green energy scam — the so-called Inflation Reduction Act’s bloated tax credits — beginning with those for electric vehicles.

The IRA’s tax credits are supposed to encourage clean energy use and production. But, in reality, they pick winners and losers, distort markets, and put upward pressure on consumer prices.

The federal government subsidizes the purchase of electric vehicles through generous tax credits — offering individuals up to $7,500 for new EVs, $4,000 for used ones, and companies as much as $40,000 for commercial vehicles. But these credits come with a maze of restrictions on who qualifies and which vehicles are eligible, reflecting a top-down approach that favors certain manufacturers and technologies over others.

The real winner with Clean Vehicle Tax Credits certainly isn’t the average American taxpayer. Instead, they are a windfall for the well-off and the politically connected corporate cronies of the Biden administration.

Lower and middle-income Americans are footing the bill for the rich

With the average new electric vehicle costing more than $55,000, it should be no surprise that a recent Gallup poll found that 42.6% of EV owners have annual incomes exceeding $200,000, while just 5% are from households with incomes between $40,000 and $100,000.

But the giveaways don’t end with consumers. These credits also squeeze money from taxpayers to help prop up industries, like auto manufacturers, that should be able to stand on their own. The individual mandates require EVs to be assembled in the United States and their batteries from domestic suppliers or a trusted trading partner.

These subsidies — and the complex rules that come with them — tilt the playing field in favor of electric vehicles as gas-powered cars are excluded from these valuable subsidies and burdened by overregulation.

There is a better use for the estimated $300 billion that eliminating the EV tax credits would free up. And it doesn’t pick winners and losers, distort markets, or lead to soaring inflation.

Let taxpayers keep it.

Republicans on the House Ways and Means Committee have made their choice. And they have chosen to stop subsidizing the wealthy, distorting the markets, and limiting consumer choice.

The full House and Senate should follow their lead.

It’s time to repeal the Biden green energy handouts and unleash American energy dominance.