Proposed Legislation Aims To Repeal Electric Vehicle Federal Rebate

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Rep. Mike Kelly (R-Pa) has filed HR 3768, which is a proposal to put a stop to the $7500 tax credit for electric car purchasers. The measure is now being considered by the U.S. House of Representatives. Ironically, Rep. Kelly is a Chevy Car Dealer by profession.

The bill is entitled “To Amend the Internal Revenue Code of 1986 To Repeal the Credit for Plug-In Electric Drive Vehicles.” The bill would amend the IRS Code section that provides the electric car tax credit purchase to be terminated from its application. This tax credit amounts to $7,500 and has been derisively called “Obama’s tax credit”. The tax credit became law with the Emergency Economic Stabilization Act of 2008 as a rider to the bailout package for the financial industry after the most recent recession. The law came into being when George W. Bush was still holding the presidency.

The bill has deep meaning for Rep. Kelly, who inherited his father’s GM dealership and was almost terminated when General Motors went belly up. When the new administration’s Auto Task Force recommended the closure of nearly 2,000 dealerships, including Kelly’s own dealership. As a response, he fought the recommendation to close his dealership and then ran for Congress. Clearly, this is a man on a mission against the Obama administration and their actions around the car industry. There have been unconfirmed reports that his dealership refused to carry the Chevy Volt and supposedly fired an employee who consented to GM’s request that the dealership have a Volt in their showroom.

In an opinion editorial piece, Rep Kelly said that “tax subsidies are largely going to the affluent few who can actually afford to buy an electric car, which costs anywhere between $40,000 (Chevy Volt) to $97, 000 for the Fisker Karma.” He further buttresses his argument by saying that “the average income of Chevy Volt buyers is $175,000 a year, a large percentage of whom are disproportionately concentrated throughout Southern California.”

He continues to blast the weak demand for the Chevy Volt with the following figures. He claims, “In September 2011, GM sold just 723 Volts. By comparison, 18,097 Chevy Cruzes, 5,246 Chevy Suburbans and 2,171 Chevy Colorado Pickups were sold in the same time span.”

He closes his op-ed with a quote of distinguished MIT Professors Thomas H. Lee, Ben Ball Jr and Richard Tabors saying, “The experience of the 1970s and 1980s taught us that if a technology is commercially viable, then government support is not needed and if a technology is not commercially viable, then government support is not needed and no amount of government support will make it so.”