May 12, 2010

TAKE TAX DOLLARS, DON'T GIVE THEM:

Welfare Wagons: The new electric cars are powered by taxpayer credits. (Holman Jenkins, 5/12/10, WSJ)

Let's concede that the Leaf and Volt will be nifty gadgets, but not unless we're going to start subsidizing Ferraris for the tiara set is it possible to imagine a more regressive tax subsidy.

In particular, the Leaf is a car for a wealthy hobbyist, good for a trip of 100 miles after which it becomes an inert lump at the end of your driveway (or behind a tow truck) for the many hours it will take to recharge.

The Volt at least is a car someone might live with, since it can run indefinitely on gasoline once its 40-mile battery charge runs out. Nonetheless, GM continues to make startling claims that the car will get 50 mpg in gas-powered mode and will have a 300-mile range—even as the company strangely declines to specify how many gallons the gas tank will hold.

Never mind. iPad lust applies to cars too, and early adopters can be expected to line up around the block. But it is insane to subsidize these vehicles with taxpayer dollars.

Even if you believe saving gasoline is a holy cause, subsidizing electric cars simply is not a substitute for politicians finding the courage to jack up gas prices. Think about it this way: You can double the fuel efficiency of any car by putting a second person in it. You can increase its fuel efficiency to infinity by refraining from frivolous trips.

These are the incentives that flow from a higher gas price. Exactly the opposite incentives flow from mandatory investment in higher-mileage vehicles. You paid a lot for a car that costs very little to operate—so why not operate it? Why bother to car pool? Why not drive across town for a jar of mayonnaise?

Posted by Orrin Judd at May 12, 2010 11:19 AM
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