Buying a Tesla? You’re probably pretty well off.
After all, the 2016 Tesla Model S 70 has a Manufacturer’s Suggested Retail Price (MSRP) of $71,200. For the high-horsepower Model S P85D, you’ll shell out $106,200. Check off all the options boxes and you’ll be looking at more than $131,000.
Or how about other electric car options, such as a 2016 BMW i8 for $141,695, a 2016 Cadillac ELR for $64,995, a 2016 Porsche Panamera S E-Hybrid for $94,250 or a 2016 Porsche Cayenne S E-Hybrid for $78,250.
Whatever the price, the rest of us will be helping you out with a federal tax credit of up to $7500. Maybe that would make some sense if the credit was helping a broad swath of the population. But it’s not.
Even though some electric vehicles on the market are relatively low-priced, it’s the affluent who are buying them. Well-off people who have incomes in the top 20% of all taxpayers are claiming 90 percent of federal electric vehicle (EV) tax credits, according to a recent study out of the Energy Institute at Haas, at the University of California, Berkeley.
The impact of the tax credit on the federal budget is the same as it would have been with a direct subsidy because the federal government ends up with less revenue.
Maintaining such tax credits for the affluent is insane public policy.
At a time of rising national debt, and struggling efforts to meet the country’s essential needs, subsidizing the well-off to encourage them to buy electric vehicles makes no sense and exacerbates inequality.
Perhaps Oregon State Representative Phil Barnhart, D-Eugene, Chair of the House Revenue Committee, could be the Oregon leader of an effort to repeal of the federal electric vehicle tax credit and state-level electric vehicle tax breaks. After all, Barnhart, who is always railing about the need to close tax loopholes that favor big business and the rich and to adjust our tax system to increase fairness, owns a Tesla.