The amendments will save taxpayers hundreds of millions in subsidies used by millionaires to buy luxury cars.
WASHINGTON, D.C. – With the U.S. Senate working this week on the American Energy Innovation Act, U.S. Senator Mike Braun (R-IN) will offer two modifications to the tax code that will eliminate the Electric Vehicle (EV) tax credit for wealthy families and vehicles that cost over $50,000. The amendments will save taxpayers hundreds of millions in subsidies used by millionaires to buy luxury cars.
The Ending the Electric Vehicle Entitlement for the Wealthy Act will eliminate the EV tax credit for joint tax returns over $326,600 and individual returns over $163,300.
Meanwhile, the Affordable Electric Vehicle Credit Act of 2020 will limit the EV tax credit for vehicles costing less than $45,000. Under this provision the following vehicles would still eligible for the EV tax credit: BMW i3, Chevrolet Bolt EV, Honda Clarity Electric, Hyundai Ioniq Electric, Hyundai Kona Electric, Kia Niro EV, Mini Cooper SE, Nissan Leaf, Nissan Leaf Plus, Tesla Model 3, Tesla Model Y and the Volkswagen E-Golf.
“As co-founder of the Senate Climate Solutions Caucus, I know we need to promote vehicles that reduce our carbon footprint, but it doesn’t need to be in the form of tax breaks for the wealthy and their luxury vehicles,” said U.S. Senator Mike Braun. “With Bernie Sanders on pace to secure the Democrat nomination, these two bills should be a slam-dunk for legislators who want to protect the environment while limiting tax breaks for the super wealthy.”
According to the U.S. Department of Energy, on average, EV owners also own two other cars. Further, 42% of EV owners earn more than $150,000 annually. Between Fiscal Year 2011 and Fiscal Year 2017, this tax credit totaled $2.2 billion in lost revenue. With the increase in sales of EVs, the Joint Committee on Taxation estimates that the federal government will spend $7.5 billion on the EV tax credit from 2018 and 2022. Yet, in 2016, 78% of the credits were claimed by filers with adjusted gross income (AGI) of $100,000 or more. About 7% of credits claimed, and 8% of the total amount of credits, were on returns where the taxpayer’s AGI exceeded $1 million.