Open Thread: Chevy Volt Buyback? Or Tax Credit Abuse?
Following a number of safety crash tests on GM's electric Chevy Volt that resulted in the cars' batteries igniting, GM has offered to buy the car back from any purchasers with safety concerns. The only problem is that when these buyers bought the Volt, they also received a $7500 tax credit from the government. Due to the lax rules of the tax credit, buyers are able to get a full refund for the car and still apply for the tax credit, even though they no longer own the vehicle.
The tax credit was designed to subsidize electric vehicles and encourage greener transportation, but perhaps most ironically, the people who this $7500 tax credit will benefit the most are the richest consumers who can afford an electric car in the first place.
Do you think anyone in the media will call out the Obama administration for hypocritically allowing the rich to keep this tax credit? Let us know your thoughts in the comments.
Essentially, the IRS form for the electric car tax credit does not explicitly state the individual must own the vehicle for a minimum amount of time or currently own the vehicle. While the 2011 version of the form requires a VIN number, this number is easily accessible on vehicle documentation, even if the vehicle is no longer in the owner's possession. Therefore, if a buyer decides to return the Volt to GM and receive a full refund, there is no legal ramification for still applying for the $7500 tax credit.
According to an article by Mark Modica with the National Legal and Policy Center, this is far from being the only instance of tax credit abuse.
Overall abuse of the tax credits for plug-in vehicles is costing taxpayers millions of dollars. A USA Today article back in February estimated false claims for the credits at 20% equaling $33 million just for the first seven months of 2010. It is probable that the number has dramatically increased. The problem with the current scenario of ex-Volt owners scamming the tax credits is that it may be legal.
Not only is the tax credit legally benefitting the rich, but it is also benefitting President Obama's friends in the green energy business.
... Evidence continues to mount that the push towards electrification of America's auto fleet is costing billions of dollars only to benefit the wealthy purchasers of subsidized vehicles along with political cronies, like Obama pal Jeff Immelt who heads GE which sells the subsidized charging stations.
Will Congress attempt to deal with this wasteful spending?