As of the end of 2007 (before the recent surge in gas prices), there were just under 1 million hybrid vehicles in use in th U.S.
As I recounted in a prior post, I was surprised that — for practical purposes — there aren’t any tax credits available for hybrid cars to offset some of their price premium over conventional autos.
The Energy Policy Act of 2005 provided income tax credits up to $3,400 (depending on the make & model of car), for hybrids purchased by individuals after January 1, 2006.
But, the credits weren’t applicable to taxpayers falling into the Alternative Minimum Tax category, and only the first 60,000 hybrid vehicles sold by each manufacturer qualified. The allowable credits were phased out as manufacturers approached their 60,000 limits.
For example, a Prius qualified for $3,150 credit on January 1, 2006. That got cut to $1,585 on October 1, 2006; $785.50 on April 1, 2007; and to zero on October 1, 2007.
See http://www.fueleconomy.gov/feg/tax_hybrid.shtml for current hybrid tax incentives
The price premium for hybrids is somewhere between “statistically significant” and — with long payback periods — “economically disqualifying “.
So, wouldn’t it make sense to reinstitute some kind of tax incentive to stimulate the shift? It could be done quickly — with the stroke of a couple of pens.
Make it big enough to matter, keep it both simple (no silly sliding scales) and broadly available (folks paying AMTare penalized enough), and watchdog the auto companies and dealers so they don’t just inflate the prices.
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