Sunday, December 2, 2012

Conservatives Should Support The EV Tax Credit

I often hear people say they don't want to support EV development and that the $7500 tax rebate offered for the purchase of an EV is taking "their" money.  In essence this is true since all government funding comes from the tax base that we all pay into.  For Tesla's 20,000 Model S vehicles they are projecting to produce next year this amounts to around 50 cents per US citizen, and is a drop in the bucket compared to other tax breaks that some individuals and companies get but others do not.
However I'd argue that the outrage is entirely misplaced for those conservative, and libertarian, individuals and does not fit with one of their basic philosophies.  Supposedly one of their large concerns is too much taxation and too much misuse of those funds by big government.  Following that logic any program which allows even some citizens to hold onto their tax money and get it out of the hands of government should be seen as a good thing.  Who knows how better to spend that money than the people who earned it?*
Another aspect of the rebate that seems to bother them, especially in the case of Tesla, is that the rebate mostly goes to the wealthy, which makes it even worse.  However, isn't that the basis of trickle down economics, and the supposed reason they oppose increasing taxation on the rich?  Allow them to keep more of their money and they will buy more stuff and create jobs with it, right?

In truth I suspect the anti EV rebate talking point is something they use without much thought in an attempt to support their inherent anti-EV bias.  It's not rational and does not even mesh with their own philosophies.  I will point out that there are some conservatives who do support EV's and do understand the benefits of the tax credit, unfortunately they seem to be under represented.

My own feelings on the topic are that I'm quite willing to see the EV tax credit go away, one second after all the other much larger tax loopholes are filled.  I'm waiting....

*Actually I'd argue against that concept since many people squander their cash with complete disregard for financial responsibility and the rest of us are left to pick up the pieces, but that's another topic.


  1. I don't agree with your reasonings on why conservatives should support the EV Tax credit: "that it doesn't fit with their basic philosophies..." While my income and assets are a far cry from wealthy we would all do better with fewer government subsidies. That includes oil subsidies. To make a sudden overnight change, however, would be quite a shock to the system as it currently stands. The problem with subsidies is that it doesn't let the system naturally find the most efficient one. It also creates dependence rather than independence. The USA was built on independence and now a very significant portion of the population wants dependence. Dependence means less freedom than independence does. Dependence also leads to a victim mentality, unfortunately most of the victims don't realize they are victims.

    Finally, keeping a tax loophole because there are other loopholes is ridiculous logic. With that logic nothing will get improved because it is an all or nothing type of logic.

    Oh, your asterisked point is mixing up two different groups of people. You are saying that those who earn their money don't know how to spend it when they are the ones who understand what it took to get it. It is those who didn't earn it that don't get it. Just look at the majority of lottery winners. Some who had no problem with their finances end up in bankruptcy 5-7 years after they win.

    I like Jack Rickards idea, tax only the energy at its point of use. That will level the playing field and really push innovation in areas of efficiency.

  2. So you don't want to end the established subsidies because it will destabilize the system, but it's a good idea to end the EV subsidies because they haven't been in place as long?
    Many established industries received tax breaks and subsidies in their early stages, including the oil industry. There has never been a "free" market, there are always those who have gamed the system with favoritism and back office deals. Government subsidies at least bring these dealings into the light of day, and I do think some subsidies are more beneficial than others. Eliminating the good ones first doesn't make much sense.

    As for my asterisk point, plenty of working people squander their money on useless and pointless purchases, (including buying lottery tickets, when their odds of being struck by lighting are higher than winning.) Many hard working people are irresponsible with their finances, and wonder why they can never get out of debt. Just look at all the junk for sale in most stores, it's there because people buy it.