Senate passes limits on EV tax credit.

A better criteria would the USA FICA limit.

Bob Wilson

 

The rebate is not a check you get from the Feds, you have to actually owe enough taxes to get the money returned to you. So lower incomes are less likely to qualify for the full amount.

This is obviously an attempt to roll back any EV subsidies by chipping away at them. Never mind the fact that wealthy people switching to EVs is just as good for the climate as anyone else switching. The amendment is apparently non-binding, however, so hopefully the House will strip it from the final bill.

 

Sad
A better idea would be to limit the price of the EV, or make the credit diminish as price goes up.

Also what about business use?

reading the article:
Thankfully, Sen. Fischer's amendment is non-binding and is unlikely to be greeted warmly by the House of Representatives.

 

Well this would certainly be good for Tesla. They would no longer be at a $7,500 disadvantage.

If they wanted to help America instead of the oil industry, they would make the tax credit carry over to subsequent years, relocate the existing tax credits and put GM and Tesla back in the game.

 

lol. Not subsidizing EVs is not "helping out the oil industry".

 

The oil industry gets significant subsidies, just not right out front like a consumer tax credit

 

Yeah. Like LIHEAP, please end it. lol

Honestly, half of these so-called indirect subsidies are either not actually indirect subsides or just pure conjecture - for example, associating the entire cost of the wars in the middle east to oil. Like, how is that even reasonable?

In my opinion, anyone who wants lavish subsides for EVs then complains about fossil fuel subsides isn't serious about solving the problem. If EVs are cheaper than ICE to own and are already essentially at price parity, then cutting all subsides period would leave EVs as winners in the market.

 

yawn

how about a fact?
U.S. Tax Subsidies to the Fossil Fuel Industry

The federal government provides numerous subsidies, both direct and indirect, to the fossil fuel industry. Special provisions in the U.S. tax code designed to specifically support and reward domestic fossil fuel‐related production are direct subsidies. Other provisions in the tax code aimed at businesses in general create indirect subsidies that are not exclusive to the fossil fuels industry. In certain cases, quantifying these subsidies is fairly simple. In the case of indirect subsidies, establishing an amount associated with these subsidies is more challenging. While not covered in this fact sheet, another source of federal aid to the fossil fuel industry is the discounted cost of leasing federal lands for fossil fuel extraction. Some fossil fuel subsidies provide public assistance, such as the Low Income Home Energy Assistance Program (LIHEAP), which assists low-income households with heating costs.

In May 2019, the UN Environment Programme (UNEP) published a report detailing an internationally accepted methodology that will help countries make their fossil fuel subsidies more transparent.


Direct Subsidies

Intangible Drilling Costs Deduction (26 U.S. Code § 263. Active). This provision allows companies to deduct a majority of the costs incurred from drilling new wells domestically. In its analysis of President Trump’s Fiscal Year 2017 Budget Proposal, the Joint Committee on Taxation (JCT) estimated that eliminating tax breaks for intangible drilling costs would generate $1.59 billion in revenue in 2017, or $13 billion in the next ten years.


Percentage Depletion (26 U.S. Code § 613. Active). Depletion is an accounting method that works much like depreciation, allowing businesses to deduct a certain amount from their taxable income as a reflection of declining production from a reserve over time. However, with standard cost depletion, if a firm were to extract 10 percent of recoverable oil from a property, the depletion expense would be ten percent of capital costs. In contrast, percentage depletion allows firms to deduct a set percentage from their taxable income. Because percentage depletion is not based on capital costs, total deductions can exceed capital costs. This provision is limited to independent producers and royalty owners. In its analysis of the President’s Fiscal Year 2017 Budget Proposal, the JCT estimated that eliminating percentage depletion for coal, oil and natural gas would generate $12.9 billion in the next ten years.


Credit for Clean Coal Investment Internal Revenue Code § 48A (Active) and 48B (Inactive). These subsidies create a series of tax credits for energy investments, particularly for coal. In 2005, Congress authorized $1.5 billion in credits for integrated gasification combined cycle properties, with $800 million of this amount reserved specifically for coal projects. In 2008, additional incentives for carbon sequestration were added to IRC § 48B and 48A. These included 30 percent investment credits, which were made available for gasification projects that sequester 75 percent of carbon emissions, as well as advanced coal projects that sequester 65 percent of carbon emissions. Eliminating credits for investment in these projects would save $1 billion between 2017 and 2026.


Nonconventional Fuels Tax Credit (Internal Revenue Code § 45. Inactive). Sunsetted in 2014, this tax credit was created by the Crude Oil Windfall Profit Tax Act of 1980 to promote domestic energy production and reduce dependence on foreign oil. Although amendments to the act limited the list of qualifying fuel sources, this credit provided $12.2 billion to the coal industry from 2002-2010.


Indirect Subsidies

Last In, First Out Accounting (26 U.S. Code § 472. Active). The Last In, First Out accounting method (LIFO) allows oil and gas companies to sell the fuel most recently added to their reserves first, as opposed to selling older reserves first under the traditional First In, First Out (FIFO) method. This allows the most expensive reserves to be sold first, reducing the value of their inventory for taxation purposes.


Foreign Tax Credit (26 U.S. Code § 901. Active). Typically, when firms operating in foreign countries pay royalties abroad they can deduct these expenses from their taxable income. Instead of claiming royalty payments as deductions, oil and gas companies are able to treat them as fully deductible foreign income tax. In 2016, the JCT estimated that closing this loophole for all American businesses operating in countries that do not tax corporate income would generate $12.7 billion in tax revenue over the course of the following decade.


Master Limited Partnerships (Internal Revenue Code § 7704. Indirect. Active). Many oil and gas companies are structured as Master Limited Partnerships (MLPs). This structure combines the investment advantages of publicly traded corporations with the tax benefits of partnerships. While shareholders still pay personal income tax, the MLP itself is exempt from corporate income taxes. More than three-quarters of MLPs are fossil fuel companies. This provision is not available to renewable energy companies.


Domestic Manufacturing Deduction (IRC §199. Indirect. Inactive). Put in place in 2004, this subsidy supported a range of companies by decreasing their effective corporate tax rate. While this deduction was available to domestic manufacturers, it nevertheless benefitted fossil fuel companies by allowing “oil producers to claim a tax break intended for U.S. manufacturers to prevent job outsourcing”. The Office of Management and Budget estimated that repealing this deduction for coal and other hard mineral fossil fuels would have saved $173 million between 2012 and 2016. This subsidy was repealed by the Tax Cuts and Jobs Act (P.L. 115 – 97) starting fiscal year 2018.
https://www.eesi.org/papers/view/fact-sheet-fossil-fuel-subsidies-a-closer-look-at-tax-breaks-and-societal-costs

 

I'm sure Chevy will soon be selling Bolts at a huge discount to get people to take the risk, so those EVs will fit under the proposed $40K price limit. Of course, for those who enjoy driving more than driving far, the fabulous MINI Cooper SE is a great sub-$40K option.

 

I've seen this all before. lol. What part of what I said was wrong? LIHEAP is literally direct Federal & State spending that disproportionately benefits oil/gas. Curious why it isn't on that list when that is by far where most the direct spending on fossil fuels comes from. See why I don't take your current position seriously? Over 3.3 billion was spent on LIHEAP last year and you can bet that a huge portion of that went to natural gas and fuel oil. As far as the Intangible Drilling Deductions and Percentage Depletion goes, I half suspect that the descriptions of both programs are not accurate and don't care to look it up. Why? Because I would have never put any tax credits in place to begin with, nor would I have tax rates nearly as high as they are now (maybe even none lol). You get haughty with people like me because someone who holds the same corporate socialist views as you uses it for an industry you subjectively don't like.

The list of indirect subsidies is just laughably absurd. Most of it is essentially being upset that oil/gas companies can do the same things that all companies can do - including EV manufacturers and renewables.

 

>uh uh. It's not addressing anything unless you list every relevant fact!

Ok. Then I guess your source didn't actually address the question of subsidies because they didn't list LIHEAP as one.

 

No you have not backed up anything you have said, you responded with speculation about facts I posted.

 

lol. LIHEAP - Low Income Home Energy Assistance Program. The majority of this funding goes to direct spending on energy use with nearly 50% of the spending put to residential heating in 2015. This program receives more than 3 billion a year -3.39 billion in 2015. Most indoor residential heating in the US is still with natural gas or fuel oil:

"Of LIHEAP recipient households, the rates of primary home heating fuel usage in 2009 were as follows: 49.2 percent used natural gas, 29.3 percent used electricity, 11.3 percent used fuel oil, 1.1 percent used kerosene, 5.0 percent used liquefied petroleum gas (LPG), and 2.7 percent used some other form of heating such as wood or coal."
(https://www.acf.hhs.gov/sites/default/files/documents/ocs/rpt_liheap_rtc01bodyttaprojects_fy2016.pdf)

Wow. Certainly looks like this is a pretty big source of direct government spending on fossil fuels - using these percentages you can calculate at least a minimum of 1 billion in direct spending on fossil fuels for heating alone.

The organization you outsource your thinking to treats this program like a side note. Why is that? Does it not strike you as a bit strange that an obvious massive source of direct federal spending on fossil fuel just gets ignored by the report? They are willing to list what they think is an indirect subsidy for fossil fuels that is valued at "~$173 million between 2012 and 2016.", but don't mention the amount of a program that uses several times that much in a single year for direct* federal spending. From your own perspective, the recommendation to address this would be to restructure LIHEAP in such a way that the spending is used to prioritize converting heating/cooling systems to electric heat pump systems (I say just abolish the whole program all together). However, you can't even make this judgement because the EESI just ignores it. If you thought for yourself, you would have realized this far earlier.


*Direct federal spending is different than a tax credit. A tax credit is essentially when the government robbing less money from someone. Direct federal spending is when the government takes stolen money and launders it to someone else or some industry (corporate socialism).

 

I'm sorry, was there a point in there?
Aside from a 12 year old article? How have those numbers changed now? You don't know

Yeah, we get it, you think taxes are theft, gov't is evil, whatever
A billion in spending, to help low income people is so much worse than the billions upon billions spent on direct subsidies listed above

 

What are you talking about? What 12 year old article? What I am quoting is directly coming from the 2015 fiscal year for the LIHEAP program. Clearly they thought the data is still relevant enough to include to describe what fuels are used for residential heating. Sure the numbers may have changed since 2009, but not to the point where fossil fuel use for residential heating doesn't happen anymore. So it may be less, then the spending on fossil fuels was like $900 million in one year. That is still far greater than the "~$173 million between 2012 and 2016" that was so important to mention in the indirect subsides section. It still begs the question on why this obviously large line item in direct spending was just ignored by EESI.

Honestly, the correct response from you should be something like this:

"Wow, I care a ton about any government spending or regulation that inherently provides some type of financial advantage to fossil fuels and I didn't realize that so much direct spending to fossil fuels happens through the LIHEAP program. While I don't agree with your claim it may be the largest source of direct spending for fossil fuels, this information clearly shows that there is a significant amount of money still being spent on fossil fuels through this program. It is strange that EESI would not make any mention on how significant this is. Now that I know this, I can advocate for the program to be restructured to directly finance conversion to electric heat pumps rather than just continuing to give taxpayer dollars to fossil fuels and essentially trapping the poor into using fuels that create toxic emissions that I believe are disproportionately harming them more than other economic classes.

I know your statements on government tax and welfare are not central to the point you are making, but I disagree with your belief that government taxes are theft and that welfare programs should be abolished. I think describing taxes like this is insensitive and immature. Until someone provides me with sufficient evidence that welfare programs are either ineffective or are harmful, I will continue to support the programs."

Is this the response I see? No.I get this:

Goodness.

 

What you have done is fail to support your point

WE are not actually talking about heating assistance, but about EV tax credits.

I get that you would rather dispense right wing propaganda decrying assistance programs for the evil poor, but really, that is not the conversation
That you wish to create both sides of the argument is amusing, but unconvincing

 

Timing suggests a political bias. So where were you when the Republicans passed a massive, permanent deficit tax cut:

I am a proud, partisan Democrat and make no bones about it. I would prefer a fair tax system so corporations and executives pay the same as any office worker (i.e., eliminate the FICA maximum.)

Bob Wilson

 

Any chance y'all could take it outside? 101010 or whoevet that was can referee.

_H*

 

Agreed!

I reported my last post with a "report" that the thread needs to go somewhere else. The "Off Topic" forum makes sense.

Bob Wilson