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ObamaCar $7500 Subsidy Transfers Wealth from Poor to Rich

ObamaCar $7500 Subsidy Transfers Wealth from Poor to Rich

Chevy Volt Subsidized by US Taxpayers

WASHINGTON: Obama’s budget proposal this week includes a $7500 tax credit for all electric vehicles like the Nissan Leaf or the Chevy Volt. Such proposals have popular support and seem on first glance a benefit to consumers and taxpayers alike. Upon further examination this particular initiative neither improves the environment nor helps the economy, but instead amounts to a transfer of wealth from the poor to the rich. Let’s look at it.

The assumption that electric vehicles are cleaner for the environment is not one without challenges. Electric vehicles get their fuel from the coal-driven power grid. They also introduce a new pollutant to the environment, substantial quantities of lead. When compared to the clean cars already on the market the new EVs do not present a substantial improvement to the environment:

What’s going on here? ”We’ve known for quite some time that zero-emissions cars wouldn’t make much difference if they substituted for very clean ones,” Robert Hahn, an economist at the American Enterprise Institute, said.

And new cars are very clean: the gasoline-powered cars mandated for California remove 95 to 98 percent of the pollutants detrimental to health. Note, too, that most plants in California generating electricity for the electric cars burn natural gas, emitting pollutants that offset part of the already modest gains made at the tailpipe. Peter Passell, New York Times

How popular are these vehicles and what kind of impact they will have in the environment is still being discovered. Last year is the first year the Leaf and the Volt were offered for sale. If you add January 2011 sales to the total of 2010 sales you get 650 Volts and 106 Leafs were sold in the entire US. The most hopeful 2011 sales forecast is 20,000. 20,000 vehicles will make no difference to our environment. Is the $220 million price tag worth it?

Another part of the initiative are grants of $10 million each to 30 cities to build public plugin stations. It only makes sense to put these stations in highly populated areas like the Northeast, Chicago, and the West Coast. Another $300 million payoff to blue state Obama voters.

Let’s look at the $7500 price tag of the Obama tax “incentive”. What is the source of this $7500? $5000 comes from taxpayers and $2500 is borrowed. If you add the interest payments of a 30 year bond on the part that is financed you add $3500 to the cost, bringing the total cost to American taxpayers to over $11,000. Even though many think that the “poor” pay no federal taxes, yet all employed persons pay FICA and Medicare which funds are poured into US general revenue coffers and spent at will. You can be assured that none of those folks can afford the $40,280 price tag of the Chevy Volt, even with the subsidy.

Obama is "Fixing" More Than Your Car

Obama at "Work" Again

Since the US government owns General Motors you can expect initiatives like this one. That’s what happens when government takes over private industry: they tilt the playing field for their benefit. Just last week the Department of Transportation exonerated Toyota for last year’s accelerator scare. The US government did all they could to pound Toyota for their impertinence of becoming the world’s #1 carmaker, all in an effort to depress Toyota sales and benefit GM. At the time NIP warned our readers of the motives behind the scare and now the Department of Transportation has proven us right.

Obama’s $7500 subsidy amounts to an advertising program for GM, a payoff to auto unions, and a blue state get-out-the-vote drive. Sure, GM and the UAW make money, but where does the money come from? It comes from taxpayers who have no choice in the matter and who can’t afford it. It’s robbing the poor to benefit the rich. Where is Robin Hood when we need him?

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