Snap Fact #240 - President Obama Proposes to Increase Consumer Tax Credit for Plug-in Hybrid Cars!

More recently, on April 8th, 2012, the President called for up to a $10,000 tax credit, an increase from the current maximum allowance of $7,500 credit, per vehicle for businesses and consumers buying trucks and cars using either electric battery, natural gas, or hydrogen power.  Unfortunately, the cost of energy-saving cars is higher than other vehicles, so by giving consumers and businesses tax credits for purchasing these alternative-powered cars, more people are more willing to buy these green vehicles that improve the environment. In addition, the President also proposed a five-year tax break for those buying commercial trucks using electricity or natural gas. This will help businesses, especially small businesses, the incentive to buy green.

For those who are concerned about building up the national debt, the entire program would be paid for by eliminating subsidies to oil and natural gas companies. Commenting on the subsidies that have been doled out to the oil industry, the President said, “It’s time to end that taxpayer giveaway to an industry that’s never been more profitable, (we should) invest in clean energy that’s never been more promising,” he said.

In order to support alternative-powered cars and boost the economy by lowering taxes for average people, President Obama proposed a budget policy to establish a consumer tax credit for plug-in hybrid cars to encourage more people to purchase these vehicles that can help the environment and decrease pollution. As in so many cases, the President took a good idea from one who preceded him in the White House - in this case George H.W. Bush. Back in 2005, President Bush signed a 5 year bill that gave tax breaks to purchasers of Hybrids. When the time expired at the end of 2010, the bill was left to expire as well. President Obama pushed for the bill to be reinstated and it was. When the bill reemerged in 2011, it was a new and improved version with a more meaningful tax deduction at least twice what it had been under the 2005 law. As it stands now, buyers of plug-in hybrids and electric cars benefit from a tax credit of $2,500 to $7,500.