Democrats’ Tax-And-Spending Spree In Microcosm: An Electric Vehicle Subsidy Benefitting The Wealthy And Big Labor

Democrats Plan To Tax Middle-Class Americans For An Epic Electric Vehicle Spending Spree That Will Benefit Wealthy Car Buyers, Auto Companies, And Big Unions, Goosed By Green New Deal Government Mandates

SENATE REPUBLICAN LEADER MITCH McCONNELL (R-KY): “When you add it all up, Democrats want to ram through one of the largest peacetime tax hikes on record, if not the single largest…. But this isn’t to say that nobody gets a leg up. Somehow, mysteriously, many of Democrats’ favorite groups and special interests come out just fine…. For example, their legislation would allow ordinary Americans’ charitable deduction on top of the standard deduction to expire… but they’d replace it with a brand-new tax break of almost exactly the same dollar amount for the union dues that go to big labor. They are scrapping Americans’ extra deduction for donating to charity and replacing it with a special subsidy for union dues to Big Labor…. And they aren’t the only group that Democrats favor who make out like bandits. Look at high income earners in coastal blue states. This bill that raises taxes on everything that moves somehow makes room for a special, gigantic tax cut for wealthy people who choose to live in high-tax states. More than half the benefit of the so-called SALT policy would go to the top 1 percent of households. There’s also a special tax break for people who choose to purchase expensive electric cars. Do you get the picture? Make U.S. industry less competitive than China in order to massively subsidize the coastal cosmopolitan lifestyle. That’s what Democrats want.” (Sen. McConnell, Remarks, 9/28/2021)


Democrats Are Pushing A Tax Credit For Electric Vehicle Purchases That Would Benefit Wealthy Taxpayers And Big Labor Unions

THE WALL STREET JOURNAL EDITORIAL BOARD: “Behold [Democrats’] gussied-up $12,500 electric-vehicle handout…. An electric vehicle costs between $10,000 and $15,000 more than a similar gas-powered model, which is why they remain a luxury item purchased mainly by coastal dwellers who have cash to burn. Democrats are effectively conceding this in their bill…. Eligibility would extend to couples making up to $800,000 (and individuals up to $400,000).” (Editorial, “Green Welfare for the Rich,” The Wall Street Journal, 9/17/2021)

  • “The bill in the House Ways and Means Committee would extend the existing $7,500 EV tax credit through 2031 and remove the 200,000 car per-manufacturer cap, which both GM and Tesla have hit. Currently there’s no vehicle price-limit on the credit, so people can use it to buy electric Porsches. Anyone who can afford a Porsche doesn’t need government help to buy one.” (Editorial, “Green Welfare for the Rich,” The Wall Street Journal, 9/17/2021)
  • “Democrats are also sweetening the tax credit by $4,500 for EVs produced at facilities ‘under a union-negotiated collective bargaining agreement’ and an additional $500 if their battery cells are made in the U.S. This is to help U.S. auto makers whose plants are unionized and have higher labor costs. They also want to help their United Auto Workers friends organize Tesla and foreign-owned plants. The $4,500 fillip would put non-unionized manufacturers at a competitive disadvantage, so they have no choice but to roll over to the UAW.” (Editorial, “Green Welfare for the Rich,” The Wall Street Journal, 9/17/2021)
  • “Electric vehicles make up a mere 3% of car sales in the U.S. despite the current $7,500 federal tax credit and generous state subsidies. About 40% of the country’s EV registrations are in California, which offers EV buyers rebates up to $7,000, access to carpool lanes and lower electric rates. Nearly 80% of battery-powered cars sold last year in California were Teslas.” (Editorial, “Green Welfare for the Rich,” The Wall Street Journal, 9/17/2021)

SEN. JOHN BARRASSO (R-WY), Senate Energy & Natural Resources Committee Ranking Member: “The Democrats’ plan does play favorites, however, and what they really focus on doing, interestingly, is hurting the working folks in rural America to give tax breaks to wealthy families in big cities in liberal States. The reason I tell you this is that this bill includes huge subsidies for people who buy and drive electric vehicles. … Well, the government is already giving billions of taxpayer dollars to electric vehicle manufacturers and for owners. Nearly 80 percent of the tax credits go to households making at least $100,000 a year. … And that is what the Democrats are offering. This bill would give up to $12,500 to married couples to buy electric vehicles--12,500. What kind of income? Maybe there is an income limit. I mean, you don’t want to give it to rich people. So the Democrats said: OK, if you are a single person earning up to $400,000 a year, you can get a subsidy. If you are a married couple earning up to $800,000 a year, you still get the subsidy because, boy oh boy, we are going to push those electric vehicles for the big cities and for our Democrat colleagues.” (Sen. Barrasso, Congressional Record, S6574, 9/21/2021)

“The $3.5 trillion budget plan from congressional Democrats … is crafted in large part to meet President Biden’s major climate pledges.” (“Democrats’ Budget Would Finance Sweeping Clean-Energy Plan,” The Wall Street Journal, 7/19/2021)


At The Same Time, The Biden Administration Is Writing New Regulations ‘To Drastically Ramp Up Sales Of Electric Vehicles,’ Cheered On By The Auto Makers And Unions That Stand To Benefit

“President Biden made dual moves to reduce greenhouse gas emissions, imposing tougher fuel-efficiency standards on auto makers and challenging them to drastically ramp up sales of electric vehicles by 2030. Mr. Biden on Thursday signed an executive order setting a target for electric vehicles, hydrogen-fuel cell and plug-in hybrid vehicles to make up 50% of U.S. sales by 2030—a voluntary goal that auto makers said would entail federal support for vehicle charging stations and consumer tax incentives. Separately, the Environmental Protection Agency proposed new rules that would require auto makers to achieve a fleetwide average fuel-efficiency equivalent of 52 miles per gallon by the 2026 model year, using an industry measure that takes into account both fuel efficiency and emissions reductions.” (“Biden Toughens Fuel-Efficiency Standards, Challenges Auto Makers to Sell More EVs,” The Wall Street Journal, 8/05/2021)

THE WALL STREET JOURNAL EDITORIAL BOARD: “What a spectacle. We’re referring to the political advertisement that auto makers staged with President Biden on Thursday endorsing the Administration’s stricter fuel-economy rules and climate agenda. Behold Big Business colluding with Big Government to grab subsidies and raise consumer prices. The White House previewed the electric-vehicle promo with joint statements from auto makers, the United Auto Workers and California Gov. Gavin Newsom. Ford, GM and Stellantis (formerly Fiat Chrysler) announced their ‘shared aspiration’ for electric cars to make up 40% to 50% of their sales in 2030. EVs make up a mere 3% of current U.S. sales, and most are Teslas.” (Editorial, “The Electric Vehicle Welfare State,” The Wall Street Journal, 8/05/2021)

  • “[A]uto makers previously struck a deal with California to reduce their greenhouse gas emissions after the Trump Administration eased the Obama corporate average fuel-economy (Cafe) standards. The Biden Administration is adopting the California deal as the framework for its revised Cafe rules from 2023 to 2026. The mileage mandate will increase by 10% in 2023 from the existing standards in 2022 and then by 5% each year through 2026 to 52 miles per gallon by 2026. They will also earn extra regulatory credits for producing more EVs…. [A]uto makers will only be able to achieve the stricter Biden targets by manufacturing more EVs. Thus the companies are lobbying for more subsidies: If government mandates that they build EVs, it must then pay people to buy them. EV buyers in some states like California can already pocket $10,000 or more in taxpayer largesse.” (Editorial, “The Electric Vehicle Welfare State,” The Wall Street Journal, 8/05/2021)
  • “Auto makers also need a major battery technology breakthrough to reduce the manufacturing cost—about $10,000 to $12,000 more on average than gas-powered cars—increase their range and reduce their charge time. For now most companies are losing thousands of dollars on every EV they sell, which they compensate for by charging more for the gas-powered trucks and SUVs that the vast majority of Americans still prefer. The companies hope to lower EV costs over time through economies of scale in manufacturing. This is another reason they are begging for government subsidies to increase sales. But auto makers don’t want to drive the electric highway alone because then they could lose money while others churn out profits. The solution? Collusion with the Biden Administration to regulate competition across the industry and raise prices for consumers.” (Editorial, “The Electric Vehicle Welfare State,” The Wall Street Journal, 8/05/2021)

FLASHBACK: AMERICAN FEDERATION OF TEACHERS PRESIDENT RANDI WEINGARTEN: “Labor is not only all over supporting it, it has helped craft it.” (“Unions Squeeze Pro-Labor Priorities Into Democrats’ Spending Bill,” Politico, 9/21/2021)


That’s Not All: Democrats Also Want To Force The Federal Government To Spend Billions To Buy More Electric Cars

“The Postal Service and the rest of the federal government are one step closer to making electric vehicles a greater presence in their fleets. The House Oversight and Reform Committee on Thursday approved $12 billion for federal electric vehicles as part of the $3.5 trillion budget reconciliation package proposed by Democrats. More than $7 billion would go to USPS, which owns about a third of all federal vehicles, and ranks second only to the Defense Department in terms of the largest vehicle inventory. Another $5 billion would go to the General Services Administration to purchase over 160,000 electric vehicles and infrastructure like charging stations.” (“Committee Approves $12B For USPS, GSA To Adopt Electric Vehicles,” Federal News Network, 9/03/2021)


To Pay For All This Electric Vehicle Largesse, Democrats Are Reaching For Taxpayers’ Wallets In A ‘Washington Money Grab For The Ages’ Featuring ‘More Than 40 Separate Tax Increases’

“House Democrats this week are moving forward with their long-awaited plan to raise taxes to help pay for their next big spending package. With more than 40 separate tax increases, collectively worth $2 trillion, it would be the largest package of tax increases in decades …” (“40-Plus Tax Increases: A Rundown Of House Dems’ $2 Trillion Tax Plan,” Politico, 9/14/2021)

“The House Ways and Means Committee on [September 15th] approved a major portion of Democrats’ $3.5 trillion social spending package, including provisions that would raise taxes … The committee advanced the legislation in a near party-line vote of 24-19. Rep. Stephanie Murphy (D-Fla.) joined Republicans in voting against the measure.” (“House Panel Advances Key Portion Of Democrats’ $3.5T Bill,” The Hill, 9/15/2021)

  • “The legislation approved by the Ways and Means Committee on [September 15th] includes a wide range of Democrats’ priorities…. It would raise the corporate tax rate for income above $5 million from 21 percent to 26.5 percent, raise the top individual income tax rate from 37 percent to 39.6 percent, raise the top capital gains rate from 20 percent to 25 percent and impose a 3 percent surtax on individuals’ income above $5 million. It also would provide the IRS with an additional $80 billion to strengthen tax enforcement …” (“House Panel Advances Key Portion Of Democrats’ $3.5T Bill,” The Hill, 9/15/2021)

THE WALL STREET JOURNAL EDITORIAL BOARD: “Here Comes the Biden Tax Bill … [T]he bill for the Joe Biden - Nancy Pelosi -Bernie Sanders spending agenda is about to be exposed to the air. The Ways and Means Committee draft tax increase … is a $2.2 trillion Washington money grab for the ages…. As a share of GDP, the House proposal is still the largest tax increase since 1968. It also doesn’t account for the Senate Finance Committee, which has floated a paper with multi-trillions in tax increases to choose from.” (Editorial, “Here Comes the Biden Tax Bill,” The Wall Street Journal, 9/13/2021)


REMINDER: ‘Without Question, The Green New Deal Is In The DNA Of This’

MSNBC’s MEHDI HASAN: “And what you’re describing there, some of the measures in that budget reconciliation, they sound like measures that were in the Green New Deal that you were one of the architects of. Is that something you’re allowed to say? Or are you worried that, if you say that, Republicans lose their mind because they’ve so successfully demonized a Green New Deal as, somehow, bad on the right?”
SEN. ED MARKEY (D-MA), Green New Deal Sponsor: “No, without question, the Green New Deal is in the DNA of this green budget resolution. All of the things that are in, we talked about in the Green New Deal. Now, we have to go even further, in the years ahead.” (MSNBC, 08/09/2021)

MARKEY: “The Biden Administration is including climate action, environmental justice, and the care economy in its recovery plans. That’s the DNA of the Green New Deal that we introduced.” (Sen. Markey, Press Conference, 4/20/2021)



Related Issues: Taxes, Green New Deal