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He wants to make EVs more attractive to middle class Americans

For the most part, mainstream consumers aren’t exactly flocking to electric vehicles since they aren't always practical for everyday use. Two of the biggest downsides to EVs include a higher MSRP compared to a comparable gasoline-engine vehicles and a limited driving range before it must be recharged.
 
The U.S. government already offers a tax credit of $7,500 on eligible EVs to help soften the blow when it comes to pricing, and one congressman wants to further increase that federal tax credit.
 
Vermont Rep. Peter Welch (D) announced this week that he wants to make it easier for consumers to purchase EVs by increasing the tax credit to $10,000 via the Electric CARS Act.
 
In addition to boosting the credit by $2,500, it would allow the tax credit to be applied at the point-of-sale instead of when the individual’s taxes are filed. The bill would also be tailored to better accommodate “many middle-income Vermonters do not have enough tax liability to qualify for the full tax credit.”


Vermont Rep. Peter Welch plugging in a Ford Fusion Energi
 
“One of the biggest contributors to climate change in Vermont and across the country is vehicle emissions. It is essential that we transition to cleaner, more efficient transportation like electric vehicles,” said Rep. Welch said an electric vehicle charging station near the Vermont Statehouse.
 
“The battery life and fuel efficiency of electric vehicles are steadily improving making them more accessible and practical to drive. This legislation will make them more affordable while saving Vermonters money at the gas pump and reducing their environmental footprint.”
 
Welch says that he plans to introduce new legislation to increase the EV tax credit when he returns to Washington.
 
It should be noted that Rep. Welch isn’t the only politician that has called for an increase in the federal tax credit for EVs. President Obama also called for increasing the credit to $10,000 back in 2012.

Sources: Christian Science Monitor, Congressman Peter Welch's Office Website



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RE: why not
By freeagle on 5/5/2014 11:03:33 AM , Rating: 1
Please, help me understand.

From wiki: "A tax credit is a sum deducted from the total amount a taxpayer owes to the state"

That means you still have to earn the money for the whole car by yourself. No one is giving you 10,000$ to buy one. You're just given 10,000$ worth of freedom in how to spend the money you earned when conidering buying an EV.

Where is the problem?


RE: why not
By Griffinhart on 5/5/2014 11:38:20 AM , Rating: 2
quote:
That means you still have to earn the money for the whole car by yourself. No one is giving you 10,000$ to buy one. You're just given 10,000$ worth of freedom in how to spend the money you earned when conidering buying an EV.


It is still 10K that you don't actually have. It increases your purchasing limit by diverting funds from roads, social programs, education, defense, etc and giving them to auto companies. Those diverted funds need to be made up from somewhere, either in the form of a larger deficit or increased taxes for everyone else.

In the end it amounts to a benefit to wealthier Americans (those in the top 25% tax bracket)and the corporations selling the cars. Households earning less than $70K a year are not buying $40,000+ cars.


RE: why not
By FITCamaro on 5/5/2014 12:13:25 PM , Rating: 1
My household income is now $120,000/year and I'm not buying $40,000 cars. I pay too much in taxes to afford them. And me and my wife are still paying for our educations so we could earn that much.


RE: why not
By Spuke on 5/5/2014 12:56:46 PM , Rating: 2
quote:
My household income is now $120,000/year and I'm not buying $40,000 cars.
Household is $160k and we don't have a $40k car either. The wife's car is new (the other two are 7 and 8 years old) but that's because she won't put more than 120k miles on her daily driver (I wish I could get her to put another 30k miles on a car then I'd get her a used one).


RE: why not
By chripuck on 5/5/2014 12:17:06 PM , Rating: 2
Agreed, it would be much, much better for it to scale based on income with a zero gain after a certain annual amount.

That said, I plan on buying one in the next year based purely on this tax benefit. It will be nearly the same cost as a gasoline model and save me tons on gas. I may not agree with the program, but I'll certainly be taking advantage of it.


RE: why not
By freeagle on 5/5/2014 12:19:56 PM , Rating: 2
Thanks, that makes sense.


RE: why not
By Mint on 5/6/2014 12:54:42 PM , Rating: 2
New cars in general are bought by people with much higher than average income.

I don't have household income stats, but only 27% of new cars are bought by individuals with <$50k income:
http://www.edmunds.com/industry-center/commentary/...

So I suspect that you're talking about maybe a quarter of the market when you say "households earning less than $70K a year".


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