Energy Bill's Tax Breaks Are No Breath of Fresh Air
Sunday, August 7, 2005
ATLANTA -- It is a fundamental question of fairness.
What if you are an hourly wage serf in this sprawling Deep South city, or in any other city in the United States where you must commute to your job? You need a car to go to work. You can afford only so much. You spend $13,960 on a five-passenger, front-wheel-drive Honda Civic HX coupe that averages 40 miles per gallon in city-highway travel.
Across town in a more affluent neighborhood lives a wealthy entrepreneur. For him, driving a Civic HX is motorized slumming. He pays $49,185 for a luxury gas-electric Lexus RX 400h hybrid sport-utility vehicle. It gets 29 miles per gallon in city-highway traffic.
The federal government and Georgia state government say the Civic HX and RX 400h meet their respective clean-air standards. Both vehicles also meet the nation's toughest air-quality standards, set by the California Air Resources Board.
But, thanks to the recently approved U.S. energy bill, the buyer of the RX 400h is eligible for up to $3,000 in federal tax credits, because he bought a hybrid. But the working stiff who bought the more fuel-economical Civic HX gets nothing.
Is that fair?
Congress and the Bush administration, which championed the bill that becomes law on Jan. 1, apparently think so. Supporters of the bill say their aim is to accelerate the development and production of more hybrid vehicles -- which they were about to canonize as the "most fuel-efficient" until lobbyists from General Motors Corp. and DaimlerChrysler Corp. stepped in.
GM and DaimlerChrysler have been working on hybrids; and both companies are bringing those models to market worldwide. But GM and DaimlerChrysler have been earning big bucks in Europe and in other overseas markets selling common-rail diesel engines, which are as fuel-efficient as gas-electric hybrids and, in some cases, more so. So, applying some old-fashioned arm twisting, GM and DaimlerChrysler got Congress to include advanced diesel engines in the tax-breaks-for-the-rich energy bill.
But there was no one lobbying on behalf of the woman or man who could afford only a Honda Civic, or an equally fuel-efficient and clean-burning Kia Spectra, or a Ford Focus. None of the car companies came to their assistance. Energy companies, which are getting $14.5 billion in tax breaks in the bill, said nothing on behalf of energy conservation for the working poor. The media were mum. The hallowed environmental groups complained that, under the tax provision that expires in 2009, "only" a total of $874 million was going to the generally more affluent people who can afford hybrid vehicles at current prices.
Where is the fairness in that? Where is the common sense? Where is the energy policy? If the ultimate goal of the legislation is to reduce U.S. dependence on foreign oil -- and render cleaner air as a byproduct -- why are people who buy and drive demonstrably more fuel-economical Toyota Echo and Corolla cars, or Honda Civic and Ford Focus models with traditional internal combustion engines, considered less deserving of tax breaks than people who can afford to buy more expensive hybrids?
Even states and local jurisdictions nationwide have joined in this de facto discrimination. In many places, if you are driving solo in your 40-miles-per gallon Civic HX, you are not allowed to use the high-occupancy vehicle lane. But you get a free pass to use that lane driving alone in your 29-miles-per-gallon RX 400h. How is that possibly fair? Exactly how does that policy save fuel or, for that matter, help to reduce traffic congestion?
Perhaps Congress and the White House believe we should be happy that the energy bill does absolutely nothing to actually increase vehicle fuel economy. The lawmakers and political leaders did not force the car companies to get more miles per gallon in the new cars and trucks they sell in the United States. Nor did our elected keepers of the faith do anything to make consumers -- all consumers, rich and poor -- pay the real price of the fuel they use. There were tax breaks, not new taxes.
In short, the energy legislation becoming law next year should be renamed the National Giveaway Bill, in which most of the giving, as usual, is going to those who already have much.
People who can afford more-expensive hybrid vehicles and advanced diesel engines get a total of $874 million. Energy companies and affiliated enterprises, currently scooping up billions of dollars in soaring fuel prices, get $14.5 billion. Car companies effectively get billions of dollars in breaks by not being required to spend more money to increase the fuel efficiency of their U.S. vehicle fleets anytime soon. And working people get a sigh of relief because they will not, for the moment, be asked to pay higher gasoline taxes to help cover the real costs of driving.
Ah, and many of the children of those working people get to fight and die in Iraq, where our only national interest is to establish a democracy in a country that just happens to be rich in oil. But all is fair in oil and war, isn't it?