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President Obama won't win any friends on the opposite side of the aisle with proposed EV tax credit

The fight over President Obama's energy policies are sure to get even more contentious in the coming months as the election season heats up. One particular area that is seeing an increased focus is the current $7,500 tax credit that is available for plug-in electric vehicle with battery packs equal to or greater than 16 kWh.
 
Vehicles that qualify for the tax credit include the Chevrolet Volt, Nissan Leaf, Tesla Roadster, and the Tesla Model S.
 
However, many in Washington have expressed outrage over the tax credit, stating that sales of plug-in electric vehicles have not met specified goals and that it only provides an incentive for people who are already wealthy rather than giving a break to people in lower tax brackets.
 
Representative Mike Kelly (R-PA) expressed his frustration with this policy in December 2011:
 
Like many green initiatives promoted by this administration and bankrolled by the American taxpayer, the electric car is better in theory than in practice; has limited consumer demand; is heavily subsidized; and has fallen short of reaching targeted goals. Despite the fact that the federal government has no business subsidizing a product that a manufacturer could just as easily promote through rebates and other buyer incentives, the tax subsidies are largely going to the affluent few who can actually afford to buy an electric car, which costs anywhere between $40,000 and $97,000.
 
Kelly and other Republicans in Washington will now likely take serious offense to Obama's latest proposal: to up the plug-in tax credit to $10,000. The increase was tucked inside Obama's proposed $3.8 trillion USD budget.


President Obama wants to raise the EV tax credit from $7,500 to $10,000 [Source: Getty Images]
 
According to the Obama administration, increasing the tax credit would help raise the total number of plug-in vehicles in the U.S. to one million by the year 2015. So far, that goal doesn't appear to be in reach given that only 17,000 plug-in vehicles were sold in the U.S. in 2011 according to the Washington Post.
 
In a separate measure, Senator Debbie Stabenow (D-MI) has suggested that it takes too long for consumers to get back their $7,500 tax credit (it can be applied for when preparing taxes for the year in which the vehicle was purchased). Under Stabenow's bill, consumers would receive their a $7,500 (or proposed $10,000) purchase rebate within weeks of qualifying plug-in vehicle purchase.

Sources: The Washington Post, Green Car Reports





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