May 12, 2010
"Congratualations. You're about to buy a fancy new Nissan Leaf or Chevy Volt…for someone else."
Ouch. That's the lead from Holman Jenkins' column in this morning's Wall Street Journal titled "Welfare Wagons" (subscription) in which he rightfully blasts the taxpayer subsidies that these cars will enjoy.
Due out this fall, purchasers of these cars will be eligible for a $7,500 tax credit and another credit to buy the $2,200 charging station. (Not that I am in favor of either, but I should note that the child credit is only worth $1,000, so it would seem Congress is seven and one-half times more interested in helping automakers than working families with kids).
Neither of these cars will be profitable, reminds Jenkins. They only will help with corporate marketing and to offset the CAFÉ standards for their more profitable SUVs and trucks. "Let's concede that the Leaf and Volt will be nifty gadgets, but not unless we're going to start subsidizing Ferraris for the tiara set is it possible to imagine a more regressive tax subsidy."
After making the point that higher fuel prices will do more to reducing oil dependence than electric cars, Jenkins concludes that "Tax handouts for electric vehicles are emblematic of an alarmingly childish refusal to take account of circumstances. The U.S. government is deeply in debt. In people and nations with their backs to the wall, one looks for signs of rationality. Running up more debt to subsidize electric runabouts for suburbanites is not such a sign."