By on April 22, 2011

President Obama’s goal of putting one million plug-in vehicles on the road by 2015 has faced serious challenges from day one, with several studies pointing out that the goal probably isn’t achievable without more government action.But up till now, President Obama has forwarded only one actual policy change aimed at achieving his goal, namely turning an existing $7,500 federal plug-in tax credit into a rebate, redeemable at the point of purchase (an idea first forwarded by Michigan Democrat Debbie Stabenow). This plan should help drive a Cash-for-Clunker-style EV buying frenzy, as the rebate would not be dependent on the buyer’s tax burden. But Automotive News [sub] reports that Senate Finance Committee Chairman Max Baucus (D-MT)

is very concerned [about the credit-to-rebate scheme] from an effectiveness standpoint.

Baucus doesn’t make a regular habit of opposing the President, but apparently his concerns about the Obama/Stabenow credit-to-rebate plan are serious enough for him to put politics aside.

The AN report is based on information from one of the Senate Finance Committee’s lawyers, Ryan Abraham, who works with Baucus on the tax policy panel. According to Abraham, the basic problem is one of complexity, and the Finance Committee’s desire to simplify the tax code.

Abraham said a tax credit is clear-cut and provides a defined incentive for consumers to purchase EVs.

However, if dealers were to give customers a $7,500 rebate at the point of purchase, Baucus is worried that the incentive could become muddled because dealers also have the discretion to lower the price of the car, Abraham said.

Dealers might mix the rebate with a price reduction, confusing the customer as to how much of each he received, the Senate aide said.

Both the consumer and the dealer could conceivably claim a credit on their tax returns, he said. The IRS would have to address this potential complication

Though the White House hasn’t released details of its credit-to-rebate policy, the fact that it appears to use a dealer reimbursement system like Cash-For-Clunkers, the waste, complexity and confusion that occurred in that program should be instructive. And because this common-sense opposition comes from within President Obama’s own party, it’s hard to see it being rammed through. Which means the President is about to find himself out of policies to support his widely-criticized EV goal.

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14 Comments on “Obama EV Credit-To-Rebate Plan Draws Opposition… From Democrats...”

  • avatar

    The U.S. government is already too far in debt and there’s no constitutional authority for this kind of nonsense.  EVs should stand or fail on their own without any government subsidy.

  • avatar
    Mike Kelley

    Yeah, the same people who want us all in electric clown cars don’t want us generating electricity.  This is going to end badly:

  • avatar

    They don`t want us to generate electricity with very polluting coal. Nuclear and renewables are fine – no inconsistency.

    • 0 avatar

      After Fukashima do you want a nuke in your back yard? Renwable is wonderful except it isn’t efficient and is very expensive. Admit it, greens like the promise of power generation but are opposed to anything that actually generates power. Wind farms, natural gas, nukes, whatever, when it comes to new generating facilities they are reflexively against them.

      • 0 avatar

        Yes, I do want a nuke in my backyard.  I’ve seen what a nuclear power plant can do to a neighboring community and my town was jealous.  New schools, new community center, new town hall, etc.  Meanwhile my town kept raising taxes.  The number of school levy votes in the neighboring community was non-existent compared to the annual hat in hand show in my hometown.

      • 0 avatar

        According to this map, most of us on the east coast have nukes at least near our backyards.

      • 0 avatar
        Educator(of teachers)Dan

        There’s a plant in Arizona that uses treated waste water for cooling.  Personally I think that’s pretty cool. 

        Yeah there’s no such thing as perfect power. 

      • 0 avatar

        I have a nuke plant 23 miles from my home.  We enjoy reliable, relatively low cost electricity, and amazingly clean air here in Miami, FL.

        What’s not to like?  As far as I’m concerned, Florida P&L should put up more reactors.  The more power, the better.

      • 0 avatar

        If you live in an area susceptible to tsunamis/floods or earthquake, yes nuke reactors may not be the answer. However these problems don’t affect a large portion of the North American continent.

  • avatar

    The lefties I know don’t want coal, and don’t want nukes. They like wind except but only if it’s not close to their home/work/beach/bike path.

    That doesn’t leave us many options.

    I’m slightly right of center but the wife and I share one car. I ride public transportation quite often not because of the environment but because it works for us. I don’t want the US Gov’t subsidizing cars, electric or not. I’m against the farm subsidies too.

  • avatar

    Oh, for heaven’s sake.  The Fukushima Dai-ichi plant started operating in 1971 (necessarily meaning that it was designed before that) and was subject to a 9.0 Mw earthquake and subsequent tsunami.  Yes, the accident was Very Bad.  But it appears, if smarter people than me are to be believed, that had the plant been of a more modern design, even after one of the largest earthquakes ever recorded AND a tsunami, no significant release of radiation would have occurred.  I don’t know about you, but I can think of several locations in this country (the US) where we might build some nuclear power plants that will not ever be subject to earthquakes or tsunamis, and might safely provide some needed electricity.  Are they the perfect power production mechanism?  No.  But there isn’t one.

  • avatar
    Carlson Fan

    “After Fukashima do you want a nuke in your back yard?

    I’ve already got 2 less than a 100 miles form my home.  So you damn right, build more.  I’ll take that over importing oil into this country any day if the week.


  • avatar
    Facebook User

    So is this for “EV”s”?  Will I be able to get a 7500 tax credit on a roehr (EV) e-supersport/bike?  How about a Zero or Brammo?

  • avatar

    So, they agree in giving the tax payer’s money away and disagree only on how to give it away. Doesn’t sound like much of an opposing view point. You say toe-mato; I say toma-toe.

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