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ObamaCar $7500 Subsidy Transfers Wealth from Poor to Rich

February 14th, 2011 No comments
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? Read more…