Buying a car is already tough. Now, in 2024, tax rules are changing for electric cars, and new tailpipe emission rules might make it harder to buy a gas car.
The changes, under the Inflation Reduction Act, won’t make life easier for businesses and families. They aim to make electric cars cheaper and more available. But they actually make things more complicated, limit the number of cars that get the credit, and have rules that could push prices up.
Now, if you want to buy an electric car, you can use a $7,500 tax credit right away at the dealership. But this could cause problems. Look at colleges. The government gave out lots of student loans to help people go to college. But this made colleges raise prices because they knew the government would keep giving out loans. Now, college is super expensive and there’s tons of unpaid student debt. The government is trying to fix it, but it’s tough.
Using the tax credit right away for electric cars could lead to the same problem. It helps rich people more than others.
But the government thought of this. Dealers can’t use the credit if the car costs more than $55,000, or $80,000 for SUVs. They also have to use more American-made parts. But this might make prices go up more.
The government wants more electric cars but is making it hard for companies to make them. They might even start making more gas cars instead. Hertz already sold lots of its electric cars because they cost too much.
The Biden administration is also making rules that will make gas cars illegal soon. But it’s really hard for car companies to meet these rules. Even the best hybrid cars might not be good enough.
The government will have to keep making new rules to fix the problems its old rules caused. It’s like what happened with wind and solar power. Tax credits couldn’t make them cheap enough, and now taxpayers have to pay.
The government has made mistakes before, and it might do it again with electric cars. These rules could make taxes more complicated and cost taxpayers a lot, and they might not even work.
Lawmakers should think hard before making things more complicated.
