“Tax Reduction Industrial Complex” Created by Envy of Investing in Electric Vehicles

of Electric car Revolutions are subsidized.

China For over 10 years, we’ve encouraged purchases and supported domestic production battery It hinders competition between manufacturers and foreign firms. Europe followed suit with generous aid to both consumers and businesses.

Now that electrification has taken root worldwide, climate change The United States, a follower of the White House, is jumping into the fray in a bigger way than ever before. First, he put $7 billion into last year’s infrastructure bill. Hundreds of millions of dollars were then made available by invoking the Defense Production Act. And now, the mother of them all, the Inflation Reduction Act, which provides generous tax deductions for buying, manufacturing and charging EVs, localizes the battery supply he chain to power EVs.

While all this global competition is getting a lot of attention, another subsidy battle is raging on America’s shores. It is a bitter battle between states to land investment in EVs and batteries.

There were many headlines of fordA year ago, the company announced it would invest $11.4 billion to build two new EV hubs in Tennessee and Kentucky, the largest spending in the company’s history. general motors It also set a company record earlier this year by investing $6.5 billion in Michigan.

An in-depth article about these developments often ends up with a tab for taxpayers to pick up, even if it is mentioned. States rarely disclose amounts in full, instead giving them out piecemeal over months or in response to public information requests. calculate A complete package is like putting together a jigsaw puzzle.

Bloomberg delved into this in this article yesterdaymatched New report from Good Jobs First, a vocal critic of corporate incentives. Among the overarching policy questions posed by nonprofit researchers, why should states subsidize EVs when consumer demand is clearly growing?

Further complicating matters is the idea that, after subtracting all the losses associated with obsolete internal combustion drivetrain components, electric vehicles may destroy jobs rather than create them.

Good Jobs First provides an in-depth analysis of some of the deals the state has struck with automakers and battery manufacturers.Georgia’s $1.5 billion incentive package RivianFor example, it advertises an average annual income of $56,000. You should scroll down page 130 and see that the minimum wage is $20 an hour. This equates to approximately $36,000 per year. Rivian is also permitted to use “employees” under state economic development treaties. leaseCompanies counting towards their job creation goals.

In Kansas, Panasonic’s incentive deal, valued at $1.27 billion by Good Jobs First, includes favorable terms for the Japanese battery company. The report says Panasonic must invest capital for five years to receive the income tax deduction, but does not have to guarantee a certain level of employment or wages. , the state is obliged to pay the money every year as long as the investment is made.

People on the left and right of the U.S. political spectrum say corporate incentives can be wasteful and unnecessary. Even state officials participating in ‘the estates’ admit it’s an uncomfortable game. But if you want to compete for these new jobs, you feel like you have very few options.

https://www.autoblog.com/2022/10/15/ev-investment-tax-consequences/ “Tax Reduction Industrial Complex” Created by Envy of Investing in Electric Vehicles

Exit mobile version