Senate will weigh bill to phase out tax credit for plug-in...

Senate will weigh bill to phase out tax credit for plug-in electric vehicles

Tesla cars hitting the road quietly. (Wikipedia)


WASHINGTON – With exactly 14 days remaining until the midterm elections on Nov. 6, Congress is out on recess.

Before heading home to Nevada to campaign for reelection, Sen. Dean Heller sponsored senate bill S.3582: A bill to amend the Internal Revenue Code of 1986 to establish a new phaseout of the credit for plug-in electric drive motor vehicles.

Presently, the electric vehicle credit provides up to a $7,500 federal tax credit for purchasers of electric vehicles from smaller manufacturers and begins to phase out the credit once an automaker has sold 200,000 qualifying vehicles in the U.S.

In July, Tesla sold its 200,000th such vehicle, meaning that starting on January 2019, the vehicle credit will be reduced in half to $3,750.

Sen. Heller’s bill would eliminate the $7,500 tax credit immediately. Starting in 2022 it would begin to phase out the tax credit altogether for electric vehicles from all automakers regardless of size or sales.

Supporters, such as Nicholas Loris, from the conservative-leaning Daily Signal, writes that “The indirect costs are particularly burdensome on lower- and fixed-income families who can’t afford electric vehicles and take advantage of the subsidies.” Loris continues that “Instead, the benefits of these subsidies accrue to America’s wealthiest households, which can also afford an electric vehicle without the subsidy.”

Loris continues that “This is borne out by data. The Pacific Research Institute found that in 2014, 79 percent of electric vehicle tax credits went to households making over $100,000, while 99 percent of them went to households making at least $50,000.”

But opponents such as Sen. Jeff Merkley from Oregon says in a press release: “It’s crazy that we might allow the electric vehicle tax credit to run out just as the American EV market is starting to gain a foothold.”

Doug Christian, Capitol Hill

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