President Donald Trump says he wants a tax bill on his desk for Christmas, and Senate and House Republicans are working to reconcile competing versions of a reform bill in an effort to make that happen. In addition to allowing Americans to keep more of their own money, the final measure should eliminate as many special-interest write-offs as possible to advance fairness and simplicity.
Targeting deductions that primarily benefit the wealthy would help Republicans sell this accomplishment and shore up support among the middle class. One easy place to start would be to kill the $7,500 handout for buyers of electric vehicles.
The tax break was born in 2009 as part of the Obama stimulus package. Its primary beneficiaries have been well-off Americans and Tesla billionaire Elon Musk. The House measure kills the subsidy outright, but automakers and green activists are pressuring Republicans to preserve the giveaway.
“Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles,” a General Motors spokeswoman told The Verve.
Of course, what industry wouldn’t rush to preserve an artificial tax benefit that encourages consumers to buy its products? But “paying people to buy electric cars is a textbook example of industrial policy that subsidizes some businesses and consumers, loses revenue and complicates the tax code,” the Wall Street Journal pointed out this week.
If automakers envision an electric future, then let them produce and promote such vehicles in the marketplace rather than rely upon mandates and giveaways created in the political arena to benefit a select few. Kill the electric vehicle tax break.