Barrasso bill would end tax credits

Source: Maxine Joselow, E&E News reporter • Posted: Thursday, October 11, 2018

Senate Environment and Public Works Chairman John Barrasso (R-Wyo.) today introduced legislation to end popular tax credits for electric vehicles.

The “Fairness for Every Driver Act” would amend the Internal Revenue Code of 1986 to terminate the federal tax credit of up to $7,500 for qualifying new EVs.

In addition, the bill would impose a user fee on alternative fuel vehicles that would go into the Highway Trust Fund.

“The electric vehicle tax credit largely benefits the wealthiest Americans and costs taxpayers billions of dollars,” Barrasso said in a statement.

“My legislation levels the playing field for all drivers across America. Gas, electric and alternative fuel vehicles use the same roads. All should contribute to maintain them,” he said. “My bill supports the Highway Trust Fund by making sure all drivers pay into the account that improves America’s roads.”

Environmentalists have expressed stiff opposition to the measure. They say the tax credit is key to boosting EV adoption, ensuring U.S. automakers’ competitiveness and curbing carbon emissions from the transportation sector.

Luke Tonachel, director of the clean vehicles and fuel project at the Natural Resources Defense Council, said that “Americans benefit from having more electric vehicles on the road because they improve energy efficiency, cut fuel bills and reduce air pollution.”

“As climate scientists urge us to act more quickly to avoid the worst effects of climate change, this measure would move us in the wrong direction,” he said.

Dan Becker, executive director of the Safe Climate Campaign, said the bill would undermine the United States’ standing on the world stage.

“It should be called the ‘Let China Dominate the Auto Market’ Act,” Becker said in an email.

On the other side of the debate, the conservative Manhattan Institute has expressed support for the measure. The group estimates ending the EV tax credit would save roughly $20 billion in taxpayer funds over the next decade.

The American Petroleum Institute has also advocated for ending the credit, saying federal transportation policies should be based on free-market principles.

“API opposes government intervention in the markets to pick winners and losers because it creates an un-level playing field,” an official with the powerful trade association testified at a recent House Energy and Commerce Committee hearing.

“Subsidies such as federal and state income tax credits for the purchase of electric vehicles and tax credits for the installation of electric charging infrastructure distort free markets and are detrimental to taxpayers and the consuming public,” said Frank Macchiarola, director of downstream and industry operations.

Barrasso has received more than $585,000 from the oil and gas industry since 2012, including $7,500 from API this year, according to the Center for Responsive Politics.

Other Republican members of the EPW panel have also sought to target EVs.

Sen. Jim Inhofe (R-Okla.), one of Congress’ most vocal skeptics of mainstream climate change science, has previously accused EPA of using the Volkswagen AG emissions cheating scandal to achieve Obama-era electric vehicle targets (E&E Daily, March 18, 2016).

More recently, Inhofe introduced legislation this summer “to ensure that the treatment of natural gas vehicles is equal to the treatment of electric vehicles” (E&E Daily, July 20).