Photo: AP

As part of an effort by the Republican-led U.S. House and Senate to reconcile their legislation that aims to drastically cut taxes for the rich, the $7,500 tax credit for electric vehicles is hanging in limbo. In a poorly-argued, haphazard piece, the Wall Street Journal editorial board says it should be eliminated, mostly because Republicans need to find a way to plug the gaping hole they’re creating by trying to cut taxes. This is an incorrect take.


Amid a relentless torrent of bad news, it’s hard to stake out territory for an argument in support of a tax credit. But the abject vapidity from the WSJ’s editorial board on the electric vehicle tax credit is too much to ignore. Cars and the transportation industry as a whole have overtaken the spot as the top source of carbon emissions, and the righteous folks of the WSJ edit board took the time here to make the argument that, in fact, supporting policy that would help people save money annually when buying a car, is unequivocally a bad thing.


What’s the reason for offering this up? Republicans need to find a way to makeup for cutting $1.5 trillion in taxes (mostly for corporations and wealthy individuals), so, the WSJ argues, they should look for an easy target, like the EV tax credit.

]The House bill nixes the credit for plug-in vehicles, which can run up to $7,500 a car, while the Senate bill preserves the status quo. The credit is essentially an indulgence for affluent Americans who have been buying $70,000 Teslas. But even Tesla CEO Elon Musk now says he’d eliminate the credit as his company begins to roll out its Model 3, which will cost $35,000 for a basic model. The credit is capped at the first 200,000 vehicles that each manufacturer sells, and Tesla may reach its limit for customer tax credits some time next year.

We’re not even through the second paragraph and there’s a factual slip-up: the credit isn’t capped after the first 200,000 vehicles that a manufacturer sells. The current design of the credit calls for it to be cut in half after the first 200,000 units are sold; another six months later, it’s halved again, and, then, finally eliminated.

That aside, the editorial board’s purpose here is evident. The general thinking is Subsidies Are Bad and must be eliminated. Tesla CEO Elon Musk makes a great target; the automaker’s benefited from nearly $5 billion in government subsidies. But other automakers have EV plans in the works—General Motors wants to put out 20 electrified models alone by 2023—so, the WSJ says, they’re all looking for the government to “underwrite their electric car production.”


And so, later on, it goes on to suggest that, in fact, there’s a way forward for EVs—the corporate tax cut itself.

The overall GOP reform is right in lowering the top tax rate for corporations to 20% in return for eliminating many loopholes. That puts all industries on a more level playing field and should be enough for GM, Ford, and Americans who want to buy electric cars.


Ah! A level playing field. If that’s what the editorial board wants, then I suppose we should cut the $20 billion in subsidies for U.S. fossil fuel production, too.

It pains me to be sticking my neck out for corporate subsidies, but writing off the credit as an “indulgence for affluent Americans” is a completely misguided crock of shit. This past year alone, GM rolled out the Bolt (starting price at $37,495), Tesla (sort of) launched production of the Model 3, Hyundai introduced the new Ioniq (starting at $29,500). The tax credit puts those cars into a price-point that’s appealing to a mass market. The U.S. Energy Department itself points out that electric cars can save people money on fuel; providing an asset that’s vital to most Americans at a lower cost through a tax credit program is a perfectly reasonable use of public dollars.


Instead, the WSJ editorial board argues this:



Paying people to buy electric cars is a textbook example of industrial policy that subsidizes some businesses and consumers, loses revenue and complicates the tax code. The plug-in credit doesn’t cost the government too much revenue, but the political symbolism is important. If Republicans are willing to subsidize the purchases of affluent consumers like Leo DiCaprio who want to demonstrate their seeming energy virtue, they’ll subsidize anything.


Anything! They’ll subsidize anything—so long, I suppose, if it’s not anything remotely related to providing a flush safety net or a car that produces less emissions and can, in theory, save people money. It only benefits the wealthy, the WSJ says, so make it ... more difficult for less-wealthy consumers to afford EVs? Brilliant.

The piece even concedes the program doesn’t cost too much, but what’s more notable, in their eyes, is the political symbolism. The WSJ’s opinion desk has given full-throttled support to half-baked, regressive policy decisions, but the editorial board’s barely trying to attempt making a point here. It’s a stupid argument rooted in nothing but assumptions. Cut this tax credit program because Leo, is the upshot.


A smart editorial board would grapple with questions like, “How should we pay for infrastructure upkeep with less motorists on the road who aren’t paying a gas tax?” Or, “How should we produce policy that supports even more widespread adoption of electric cars?” Or, “automakers need to take necessary steps to ensure their supply chains for electric cars don’t rely on child labor.”

Most Americans need a car to get around for work, and automakers are making a push to produce cars that make a small attempt at creating a cleaner environment, all the while shrinking personal costs for consumers.


Rather than find ways to make this sort of technology succeed—and most in the auto industry feel the tax credit’s necessary early on to make electric cars work—the WSJ’s edit board pegs it as an easy target for Republicans to eliminate during their quest to save corporations and the rich billions of dollars. It’s craven, which isn’t an unusual position for the WSJ edit board to take. But if it’s going to argue against the tax credit, it should make an argument that goes beyond Eliminate This Because We Don’t Like It.

Give me a break.