Democrats are preparing to pass the largest tax hike in a generation so rich people can buy electric cars.
This week, congressional lawmakers continued a marathon mark-up session for their $3.5 trillion piece of legislation with a focus on trying to control the world climate. Democrats have aimed to include a number of items to reach President Joe Biden’s stated goal of reducing U.S. carbon emissions in half by 2030, with 50 percent of new cars on the market by then part electric.
The electric vehicle initiative absent new American mines is a big win for Beijing, which dominates the market for minerals needed to manufacture such car batteries.
“Through this legislation, we are setting up clean electricity to be the backbone of the Biden economy, an economic plan that truly works for all Americans,” said House Energy Subcommittee Chair Bobby Rush of Illinois on Monday.
The colossal legislation will likely include tax incentives for buying electric cars, among other forms of subsidies for renewable energy. It comes with a massive price tag that would require a tax increase to bring in nearly $3 trillion in new revenue. The proposed electric vehicle tax incentive totals $12,500, with the last $4,500 only provided to buyers of electric cars from unionized manufacturers, drawing criticism from Honda, Tesla, and Toyota.
“Over the weekend, details on how Democrats want to fund the bill came to light in a five-page memo sent around by Hill aides that outlined $2.9 trillion in tax increases proposed by House Ways and Means Democrats, the largest increase in decades,” Fortune Magazine reported Monday.
The series of tax increases target wealthy individuals and would ultimately be passed to consumers. According to Fortune, about $1 trillion would come from high-income citizens with a top individual rate reset at $39.6 percent before Republican tax reform in 2017. The top capital gains rate would go up from 20 percent to 25 percent, and another proposal slaps a 3 percent surtax on Americans with adjusted gross income of more than $5 million.
“Corporate tax rates would increase from 21 percent to 26.5 percent for businesses with income in excess of $5 million,” wrote Fortune, while small businesses raking in below $400,000 would see a lower rate of 18 percent.
While targeting the rich, the series of tax increases run the risk of stressing consumers already choked by inflation. Prices are already up more than 5 percent from August last year.
“For years, radical environmentalists have lied to us about the affordability of their renewable sources of energy,” said energy non-profit Power the Future Communications Director Larry Behrens. “This administration can repackage the Green New Deal all they want, but it’s still a disaster… Our families are having to deal with enough without having to pay more so the wealthy can get a break on another Tesla.”