NCPA - National Center for Policy Analysis

Electric Car Tax Breaks Benefit the Wealthy, Don't Help the Environment

February 9, 2015

Washington Governor Jay Inslee recently announced a program to incentivize electric car buying, but Todd Myers of the Washington Policy Center says the program will only benefit the wealthy, without meaningfully reducing greenhouse gas emissions.

Inslee's plan would provide sales tax breaks to individuals who purchase electric cars. But according to Myers, the people who purchase electric vehicles are already wealthy. In fact, half of Washington's sales tax breaks for electric cars go to residents in the wealthiest 10 percent of Washington zip codes. Those willing to purchase a $105,000 Tesla -- or even a $30,000 Nissan Leaf (an electric vehicle that costs 30 percent more than a comparable gas-powered model, even after accounting for the Washington tax break and a federal tax credit) -- are not likely to be swayed by the tax break.

The proposal will cost the state of Washington $15.6 million in 2015 -- and for what? The Washington Policy Center says the state will see just $1 in environmental benefits for every $304 spent. 

Source: Todd Myers, "Nearly Half of Electric Car Tax Breaks Go to State's Wealthiest 10 Percent," Washington Policy Center, January 2015.

 

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