A new policy brief from the Washington Policy Center proves that “nearly half of sales tax breaks for electric vehicle buyers go to people living in the wealthiest 10 percent of zip codes in Washington state.” More, the tax breaks do not succeed in promoting electric cars because the breaks “go primarily to wealthy buyers who would likely have purchased electric cars anyway, so they result in few new electric vehicle sales.”
Despite evidence that the electric car tax break does not work as intended, Jay Inslee insists on using it in the hopes it will increase the number of electric car vehicles on the road from 10,000 to 50,000 by 2020. But, Inslee’s generous incentive package doesn’t stop at just a tax break. He also wants to “allow single drivers in electric vehicles to use high-occupancy vehicle (HOV) lanes and to ride state ferries for free.” Additionally, as Shift reported, our green governor wants to “use state funds to install charging stations for electric vehicle owners.”
Inslee’s is touting his generous incentive package in the name of reducing carbon emissions. Yet, for the approximately $15.6 million in tax breaks, research proves “the environment receives almost no benefit from carbon emissions reduction.” The Washington Policy Center,
“The justification for the tax breaks on luxury cars is to provide an incentive to purchase an electric car instead of a cheaper, gas-powered car. The data demonstrate that tax breaks are predominantly going to car buyers whose buying decisions are least influenced by those tax cuts – the wealthy… The environmental benefit of the tax break comes when buyers choose an electric car instead of a gas-powered car based on cost. Since few electric car buyers base their decision on price, the environmental value of the break is near zero. Many electric car buyers report they didn’t know about the tax break prior to buying the car… The data show the tax break is not encouraging middle-class car buyers to purchase the [Nissan] Leaf and, as a result, it is not helping reduce carbon emissions.”
The Washington State Office of Financial Management (OFM) estimates the electric vehicle sales tax break will reduce state and local tax revenue by $15.6 million for fiscal year 2015. Rather than taxpayers subsidizing the purchase of cars for wealthy owners, the Washington Policy Center uses Inslee’s own cap-and-tax proposal data to suggest using the funding “elsewhere to reduce 1.2 million metric tons of CO2 – or all of the emissions of 253,803 cars for an entire year.”
Extreme “green” activists often claim to support the tax subsidy because “it will help create an electric car market for the future.” However, that analysis of the market isn’t just flawed, it undermines another claim they rely on. The Washington Policy Center,
“Their excuse, however, undermines the environmental left’s basic claim that climate change is a crisis that must be addressed today. Spending millions of dollars in the hope it will pay off at some point in the future makes clear the left is putting its ideological vision ahead of the global climate issue they claim is an immediate crisis.”
You can read the Washington Policy Center’s full policy brief here.