Both the so-called CLEAN Future Act and the Biden-Harris Administration’s $2 trillion infrastructure package, if enacted, will impose upon America substantially more expensive and less reliable energy, and it will reduce job growth and economic expansion. This will be particularly harmful to the working poor who can least afford these burdens.
We all want a clean future. We all want clean air to breathe, clean water to drink, and a clean environment. We also want our nation’s highways, bridges, airports and transportation infrastructure to be in good working order. But the “CLEAN Future Act” and the Administration’s $2 trillion infrastructure package do very little to ensure a clean environment, and precious little to build and maintain the nation’s highways, bridges, and airports.
Just like with the recently passed $1.9 trillion COVID stimulus, less than 10% of these plans actually do what they say they will do. The bills are largely an excuse to pack the proposals with a grab bag of pork, waste, and extreme regulation that will do far more harm than any good they could possibly do.
The House Energy and Commerce Committee put huge subsidies for Electric Vehicle (EV) chargers into its “CLEAN Future Act.” The Ways and Means Committee is devising new tax credits for EV chargers. And in the Senate, a bill would increase EV tax credits by almost 700% at up to $200,000 per unit.
One could argue that the intensions are good, but arguing that the impact will be good is very difficult. We could spend trillions of dollars to pursue good intentions, but not actually do much to encourage a clean environment or keep energy costs reasonable for the working poor. The marketplace will do a far better job of meeting our future needs and nimbly making adjustments to respond to changing needs.
For example, putting hundreds of billions into charging stations may be a waste of money. There are companies developing technology that would simply swap out an exhausted battery and swap it with a freshly charged one. This could be done in minutes. They would then charge your battery for another swap. I’m not endorsing this technology. I’m simply pointing out that we don’t yet know if consumers want EVs, and if they do, if they want to charge them for an hour or more or simply swap out the battery in an instant and continue driving, or maybe they want some mix of both. The marketplace will figure this out. But Government mandates will impose rigid mandates and lack the ability to balance consumer’s needs.
The truth is government’s push to outlaw the internal combustion engine is typical of its myopic approach. There are many ways to insure a clean environment. Our cleaner burning fuels and cleaner operating engines have done more to give America cleaner air than EVs have done for the environment.
Numerous studies show that EVs have their own massive negative environmental impact. The batteries EVs use are made from rare earth elements that must be mined and the manufacture of batteries produce acid waste and radioactive residues. Plus, an immense amount of energy is required to refine and produce batteries. Another problem is what to do with the batteries once they’ve reached their life cycle end. They are not environmentally friendly and won’t age well in landfills.
So rather than pumping billions or even trillions of America’s hard-earned dollars into programs designed to force consumers into EVs, why not allow the natural maturation of technology to help us make wise choices in the future? Perhaps EVs are the wave of the future. Perhaps not. Wouldn’t it be good to know the answer to that question before we force Americans to devote trillions of dollars into a technology that has not yet proven itself?
Often we are told that we must act now because if we wait, it will be too late. This is a conman’s pressure tactic. Our air quality is improving and has been for a long time. Additionally, America is one of the leading nations in reducing carbon dioxide emissions. It is also worth noting that carbon dioxide isn’t a pollutant. Humans exhale carbon dioxide and plants require it to grow and photosynthesize. So we ought not make carbon dioxide an environmental villain. It is required for life here on Earth.
Before every committee in Congress and the Administration race to see who can throw the largest sums of taxpayer money at EVs and charging stations, let’s allow the technology to mature. Let’s see if consumers want EVs. Let’s see if EVs meet our transportation needs. If they do, the marketplace can best figure out the way to charge or refuel an EV. Government’s attempt to make these decisions before we know the answer to important questions insures that we will waste trillions of dollars promoting things that won’t pan out. And that is money that cannot be invested in real solutions, real jobs or real infrastructure needs. So we ought not be forced to rush when the conman tells us that time is running out. It isn’t.
Throughout the 2020 presidential campaign season, then-candidate Biden continually promised that he would not raise taxes on households making less than $400,000 per year. It was a promise echoed again by the White House just over a month ago, but the so-called American Jobs infrastructure plan rolled out by the administration pulls a bait-and-switch on the American people, particularly the working poor and ethnically diverse communities.
A key component of the Biden plan is the push for a nationwide transition to electric vehicles, which takes up some $174 billion in subsidies from the package, but one of the largest problems with the proposal is its disregard for the negative downwind effects it would have on those at the lower rungs of the economic ladder. As of 2019, the average cost of an electric vehicle was $55,600, far greater than the cost of other vehicles more affordable for lower income families. In fact, another recent study showed that the average income of electric car owners is at least $100,000 per year, well over even the middle-income line. While the Biden plan throws truckloads of money at other angles of the electric vehicle issue, it does nothing to address the fact that lower income households simply cannot afford electric vehicles. To make matters worse, electric vehicles only account for 2 percent of vehicle sales in the U.S., even though they have been an option for vehicle purchasers for a significant period of time. The Biden plan is catering to a niche segment of an industry, in a show of political nepotism for a pet campaign promise while slapping the American worker in the face in the process.
An aggressive plan like Biden’s calls for significant bumps in energy and electric grids. Even currently, with a transportation budget of $1.5 billion, electric companies have almost $1 billion more in requests for expansion, and this is the case notwithstanding the drastic increase in energy grids that the Biden plan would implement. More electric grids cost the utilities more to operate, meaning large spikes in utility costs.
California provides an example of this type of policy gone wrong, as it invests the most of any state into electric vehicle infrastructure yet has increasing issues with blackouts, high utility costs, and general cost-of-living increases. For instance, as of 2010, SDG&E, the major energy provider in the San Diego and southern California region, has seen consistent rate increases. Conversely, utility disconnections due to overdue bills and payments has also steadily climbed within this time period, suggesting that ratepayers are finding it more difficult to keep up with rising costs. Even more specifically, those burdened with these rate hikes are disproportionately minority groups in disadvantaged communities, who shoulder these costs for the benefit of disproportionately affluent areas that can afford EV’s.
Additionally, American seniors are keenly affected by these rate hikes. Per an AARP testimony in 2019 in Arizona, “twenty percent of Arizonans 65 and older rely on Social Security as their sole income source. Fifty percent get a substantial portion of their income from Social Security…[which] is about $17,500/year…Older Arizonans have much higher medical costs so many already [are forced] to choose today between, food, rent, medical care and very limited transportation…they cannot afford higher electric utility rates much less for electric vehicles.” Yet again, ratepayers are being conscripted to subsidize a service that they do not use, at the cost of their own well-being.
These specific examples are simply the tip of the iceberg. If the Biden E.V. plan is implemented, the consequences would be far more drastic than even the current rate hikes. If less fortunate groups are not benefiting from electric vehicles, why should they be forced to pay for them? Spiked electric utilities affect the poor and vulnerable more negatively than any other economic demographic. Utilities are a difficult commodity to live without, particularly within a family, and they should not be burdened with rate hikes for services they do not use. Simply put, lower income households are not driving electric vehicles, and the Biden plan not only gives them no incentive or ability to do so but punishes them for costs incurred by wealthier households, all while claiming victory because rate hikes caused by government action aren’t technically a tax. Tax or not, the cost to the American people is the same. The ploy is a cruel bait-and-switch tactic that misleads the American people and should raise red flags about the Biden administration’s friendliness to the American worker.
“This proposal is essentially reverse Robin Hood… Billions of dollars coming out of the pockets of working people and working families and it is transferred to the most fortunate in our country.”
Although those words from career politician Ron Wyden were intended to deride a Republican policy he opposed back in March of 2017, they instead perfectly describe a proposal he himself put forth in March of 2020. Senator Wyden recently sponsored an amendment to save taxpayer-funded subsidies for luxury electric vehicles [EVs] often enjoyed by ultra-rich multimillionaires like himself.
For more than a decade, the working people and working families that Senator Wyden claims to fight for in Washington have collectively been forced to help contribute up to $7,500 for every EV sold in America – that is, until each manufacturer sells 200,000 units. As one of Wyden’s Senate colleagues, Wyoming’s John Barrasso, notes, between 2011 and 2017, EV buyers therefore received a total of $4.7 billion in tax credits. The bipartisan Joint Committee on Taxation, meanwhile, estimates that the credit will cost taxpayers $7.5 billionbetween FY2018 and FY2022 alone in its current form.
Given the tremendous amount of taxpayer assistance the industry has already received, its response to the foregoing phase-out period should be rooted in gratitude rather than greed. But these billions are apparently insufficient for colossal electric car corporations hoping to sustain their taxpayer-funded windfall from Washington for as long as professional politicians like Ron Wyden will permit. Accordingly, in an act of total contempt for his middle-class constituents, Senator Wyden is working to deliver an additional $16 billion to these carmakers’ coffers over the course of the next decade – a product of the industry’s relentless lobbying push to lift the aforementioned limit up to 600,000 units as more and more EV manufacturers prepare to join giants like General Motors and Tesla in outselling their caps.
While a $7,500-per-vehicle tax credit may sound like pocket change to the sixteenth richest lawmaker in the United States Senate – back in 2016, Wyden had an estimated net worth of nearly $10 million – it is a significant sum to the working people who must subsidize the purchases of his prominent pals in the top 1 percent. Yet, this precise group of people is priced out of very luxury cars they help finance as “the median price for electric vehicles is roughly $20,000 more than the median price of gas-powered cars.” Per a recent reportreleased by the nonpartisan Congressional Research Service – which is widely considered to be Congress’s think tank – “EV tax credits are disproportionately claimed by higher-income taxpayers.” More specifically, “most of the tax credits (78%) are claimed by filers with adjusted gross income (AGI) of $100,000 or more, and those filers receive an even higher proportion (83%) of the amount of credits claimed.”
Additional data about the income demographics of those who most frequently claim the credit make clear that EVs are taxpayer-funded toys for wealthy people like Wyden:
– A 2018 Pacific Research Institute study found that “79 percent of electric vehicle plug-in tax credits were claimed by households with adjusted gross incomes of greater than $100,000 per year”;
– The 2017 U.S. Department of Transportation’s National Household Travel Surveyrevealed that “about two-thirds of households with [battery electric or plug-in hybrid electric vehicles] have incomes higher than $100,000”;
– In a 2017 CarMax/CleanTechnica survey, 17 percent of households with EVs – the largest share of any income bracket – earned $200,000 or more the previous year; and
– Energy economists at the University of California, Berkeley concluded that “the top income quintile has received about 90% of all [Qualified Plug-in Electric Drive Motor Vehicle Credits].”
Setting aside the EV subsidy program’s disturbing proneness to fraud and abuse – late last year, a government watchdog concluded that “bogus electric vehicle tax credits” cost taxpayers tens of millions of dollars – it can clearly be called a failed subsidy program because of the disparity between those who are fortunate enough to claim the credit and those who are compelled to contribute to it. As Senator Wyden so aptly put it, “this proposal is essentially reverse Robin Hood” because it redistributes precious resources from working people to the wealthy; from his middle-class constituents to massive EV corporations.
Eliminating, rather than extending or enlarging, the EV tax credit is clearly the proper course as Congress considers its path forward. Let’s pull the plug on this welfare program for the most affluent among us.
While cold weather, as a new AAA study reveals, can reduce the range of electric vehicles by roughly 40 percent, the prospect of being frozen out of its windfall from Washington kicked the industry’s lobbying team into overdrive this winter.
For more than a decade, you, the American taxpayer, have been responsible for funding that windfall through a federal tax credit of up to $7,500 for every luxury electric car sold in the country. Currently capped at 200,000 units per manufacturer, electric vehicle buyers were the beneficiaries of $4.7 billion between 2011 and 2017; absent a repeal, the Joint Committee on Taxation (JCT) projects that figure to total $7.5 billion between FY2018 and FY2022 alone. The Manhattan Institute, meanwhile, estimates that the elimination of electric car subsidies could save taxpayers $20 billion.
Only compounding the ever-growing cost to the American people, NERA Economic Consulting’s September study determined that in the No Cap Limit scenario sought by lobbyists for titans like Tesla and General Motors – both of whom have already hit the aforementioned 200,000 per-manufacturer threshold – “total personal income of all U.S. households decreases by $7 billion in 2020 and $12 billion in 2035” on top off “higher total electricity costs” for ratepayers. Overall, NERA concludes that between 2020 and 2035, the net present value reduction in personal income of all U.S. households would swell to a staggering $95 billion. Continue reading