We need tax credits for new cars and trucks

OPINION:

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For a number of years, the federal government has given people who buy electric vehicles a tax credit of $7,500. This tax credit and the other federal and state subsidies to encourage the purchase of electric vehicles usually wind up making the rich richer — most of the subsidies go to people making more than $100,000 a year.

That regressiveness is not getting any better. The tax credit for electric vehicles in the inflation Reduction Act doesn’t phase out until people start making about $300,000 per year.

These tax breaks for the rich kids aren’t really doing anything to help the families and businesses of the United States. At an average cost of more than $53,000, electric vehicles are well out of the price range of most of us, even with help from Uncle Sam.

What’s more, it is not at all clear how good for the environment electric vehicles really are. The mining of the minerals needed to assemble such a car means that their carbon footprint is much greater than a gasoline-powered automobile’s before they are driven a single mile. We know that children in Congo spend their days mining for the minerals that go into the battery of electric vehicles. We know that China — a nation identified as genocidal by both the Biden and Trump administrations — owns, controls or processes 80% of the minerals needed for electric vehicles.

Here’s what else we know: The cost of a new car is out of the reach of too many people in the United States. The average price for a new automobile in the U.S. last year was about $48,000. The average household income in the United States last year was about $74,500, and it seems to be trending downward. The average car payment last year? More than $700 a month.

If the federal government were serious about doing something to help families, businesses and local institutions, it would extend the tax credit — now set aside for the purchase of just electric vehicles — to include the purchase of all automobiles made in the United States.

What is more important than the ability to get to school, work and family commitments reliably and in a timely manner? People don’t really care about the trivia that consumes policy geeks in Washington. They simply want reliable, affordable transportation that gets them, their kids and their gear from where they are to where they need to be.

Such an expansion of the tax credit would help realize the dreams of millions of families who are priced out of the new car market, and reliant on aging used cars or worse.

By encouraging automakers to bring manufacturing and supply chains back to the United States, it would help automakers and autoworkers and their neighborhoods and communities immediately. A tax credit for new car and truck purchases would also drop the price of used cars.

Perhaps most importantly, a tax credit for all new car and truck purchases would move us past the pointless and nonsensical approach — adopted by the Biden administration — in which government agents decide what kinds of cars people can and should buy.

In short, a tax credit for the purchase of all American-made automobiles would empower consumers, families and businesses and let them make the decisions that are best for them.

There has been a lot of talk about how the Republicans are becoming the party of the working class. I’m sure we all hope that’s true. At the moment, though, the tax code is festooned with privileges for the rich and well connected. It’s about time working-class Americans are given a break.

• Michael McKenna is a contributing editor at The Washington Times. He worked in the Office of Legislative Affairs in the Trump administration. He owns four cars.