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Waste of the Day: Expanded EV Charger Tax Credit Will Now Cost $900 Billion

February 14, 2024

Topline: A $7,500 federal tax credit meant to help those in poor or rural areas buy electric vehicle chargers is now applicable to parts of huge cities like New York and Los Angeles, according to updated rules from the Treasury and a Wall Street Journal report.

Key facts: President Joe Biden’s Inflation Reduction Act in 2022 created a tax break that covers 30% of the cost of an EV charger for “low-income and non-urban” drivers.

This month, the Treasury changed its definition of “low-income” to include neighborhoods where the median income is less than 80% of the surrounding area’s median income.

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Waste of the Day 2.14.24

That definition fits relatively poor areas of prosperous cities such as Manhattan's Times Square, where income is high but still lower than most of New York, according to the Wall Street Journal.

The updated meaning of “non-urban” includes any neighborhood where less than 90% of blocks are designated as urban. So, a town that is 89% bustling metro could claim the tax credit as a rural area.

Now, “low-income and non-urban” applies to two-thirds of America, according to the White House’s press release.

Background: The credit expansion will contribute to the rising cost of Inflation Reduction Act climate subsidies. Democrats said that the subsidies would cost $391 billion when the bill first became law, but The Brookings Institution estimates the real cost at closer to $900 billion.

The Treasury has already issued guidance that expanded tax credits for “energy property” such as solar panels.

Critical quote: “The Administration just will not stop ignoring the law in pursuit of its radical climate agenda — no matter the cost,” Sen. Joe Manchin (D-WV) said in a written statement.  “This proposed guidance ensures that rural Americans will remain stuck at the end of the investment line, the exact problem this tax credit was supposed to address, choosing to give hand-outs to those that don’t need it while ignoring its responsibility to provide a hand up to rural communities at risk of being left behind.”

Summary: The Inflation Reduction Act’s investments in clean energy are important for the country’s future, but sending $7,500 tax breaks to individuals who can afford new technology themselves is a way to waste taxpayer dollars.

The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com

This article was originally published by RealClearInvestigations and made available via RealClearWire.
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