The White House, Washington, D.C. [Creative Commons license by dcjohn]Enlarge Photo
The United States tax code hasn't seen a major overhaul in decades, and the current Congress—along with the Trump administration—may be learning, or re-learning, why.
Numerous opponents have moved swiftly to condemn various aspects of the draft Tax Cuts and Jobs Act (HR1) proposed in the House of Representatives, released last Thursday.
The bill in particular could affect electric-car buyers significantly with its provision to end the current income-tax credit of $2,500 to $7,500 for purchase of a plug-in electric car.
Both General Motors and Nissan released statements calling for the continuation of the electric-car tax credit.
Environmental advocacy groups, meanwhile, highlighted the bill's continuation of subsidies for the fossil-fuel industry and its expanded nuclear-power tax breaks.
They noted that while those provisions remain or grow, the bill cuts incentives for renewable solar and wind power.
Oil field (Image: Flickr user johnny choura, used under CC license)
Oil field (Image: Flickr user johnny choura, used under CC license)Enlarge Photo
General Motors urged the government to retain the electric-vehicle tax credits, and said it "will work with Congress to explore ways to maintain this incentive.”
"Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles," added Elizabeth Winter, GM Global Advanced Technology Communications.
Nissan echoed a similar sentiment in its own statement. "We support continuing measures that help encourage greater adoption of EVs given the benefits they can provide, such as lowering vehicle emissions and reducing America’s dependency on foreign energy sources," the Japanese company said.
Despite multiple inquiries by Green Car Reports, Tesla did not respond to our request for comment on that provision of the tax bill.
The end of the credit would follow GM's national launch of the Chevrolet Bolt EV, and come as Nissan prepares to launch the second-generation 2018 Leaf and Tesla works through bottleneck production issues with its lower-priced Model 3.
Even if the electric-car tax credits survive, however, those three automakers will soon approach the maximum number of vehicles for which their buyers can claim the credit.
Driving a 2017 Chevrolet Bolt EV from Virginia to Missouri, June 2017 [photo: Bill Massmann]
Driving a 2017 Chevrolet Bolt EV from Virginia to Missouri, June 2017 [photo: Bill Massmann]Enlarge Photo
Every automaker is eligible for the credits on its first 200,000 electrified cars sold.
After 200,000 cars, the credits enter a phase-out period with half the credit amount available for six months, and 25 percent for six months after that.
On the energy side, meanwhile, the NRDC wrote in great detail about the bill's potential effects, which skew towards big businesses and the fossil-fuel industry.
Specifically, an NRDC study found oil and gas companies receive $8 billion in tax benefits every year. The proposed U.S. House plan further enriches them by lowering the royalty rates they pay.
Companies would no longer have to pay U.S. taxes on profits repatriated from overseas, which would benefit oil companies such as ExxonMobil in particular.
With less revenue coming in, the NRDC suggests that Congress could be pressured to open federal lands to oil drilling to gain more revenue.