Build Back Better Includes Expensive Giveaway to Auto Unions
On Friday, the House of Representatives passed the Build Back Better Act, President Joe Biden’s signature legislation. Despite being much smaller than it was when initially proposed, the bill is still stuffed with Democratic wish list items, including policies on climate change, child care, family leave, and immigration. The bill is expected to face opposition, and likely some pruning, when it reaches the Senate. One proposal jumps out as an obvious contender for the chopping block.
As part of Biden’s plan to rein in carbon emissions, the bill contains a provision which would provide a $7,500 tax rebate to any consumer who purchases an electric vehicle (EV), including both all-electric and plug-in hybrids. However, that amount increases by $4,500 if the car was manufactured in a unionized U.S. factory, as well as by an additional $500 if the vehicle contains a U.S.-made battery.
Ostensibly, this provision is part of Biden’s “Buy American” policy of incentivizing or mandating purchases to be made domestically. In practice, the order has simply carried over the protectionism of the Trump trade policy and increased costs to taxpayers. The EV credit proposal, though, is much more egregious, in that it not only incentivizes a particular type of product, but incentivizes particular brands, as well.
If enacted as written, the bonus $4,500 in EV credits could only apply to cars made by Ford, General Motors, and Stellantis (formerly Fiat Chrysler). In other words, a driver who wants to purchase a hybrid Toyota Camry, which U.S. News & World Report ranks as having “Great” reliability, does not qualify for the extra money, even though the car is manufactured in Kentucky. But if that same
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