(by John Stossel, HumanEvents.com) – I just got a free golf cart.
Actually, it cost me $6,490 — but the dealer, Colin Riley of Tucson, Ariz., points out that there’s a $6,490 federal tax credit on such vehicles. Riley runs ads that say: “FREE ELECTRIC CAR … !”
Some consumers probably assume it’s a car-dealer scam, but it’s not. It’s an Uncle Sam scam.
The tax code is outrageously complex and damaging in many ways, but it is made especially complex and damaging when congressmen use it “creatively” to manipulate us into doing things they deem “socially constructive.” These are things that always bestow advantages on some politically connected manufacturers at the expense of others. After all, you were either planning to buy a golf cart or you weren’t. If you were, the policy is unnecessary. If you weren’t, you were induced to spend money on that product rather than something else. The unseen victim is whoever would have sold you the alternative product.
Such manipulation is at the heart of the entire “green” strategy.
The Wall Street Journal reports that business is busy taking advantage of the tax credit. “Is that about the coolest thing you’ve ever heard?” Roger Gaddis of Ada Electric Cars in Oklahoma said.
I thought “free” golf carts were outrageous enough that the publicity would embarrass Congress into killing the tax credit. I thought the media would be all over it. But even though Riley has received thousands of calls for cars — and sold hundreds — he hasn’t seen much media attention. The Journal commented, “You can’t blame a guy for exploiting loopholes that Congress offers.”
In Florida, Tony Colangelo also sells subsidized cars. He said the golf-cart credit is — good for politicians:
“It’s all (about) going green. They want all those gas vehicles off the street. They’d rather have the electric than anything.”
The golf-cart boom follows an IRS ruling that many golf carts qualify for the electric-car credit. A credit is better than a subsidy since you keep money the IRS would have taken. Still, it is an insidious form of manipulation used to benefit some forms of industry at the expense of others.
Colangelo says: “I never, in my entire life, got anything back from the government, and I’ve always paid taxes. Why shouldn’t the people who worked hard for their money get something back?”
Because government shouldn’t be in the business of taking money and giving it back! That just gives [them] more power over our lives.
After I drove the car onto my first Fox Business Network show last week, viewers wrote in asking how they could get one.
But others got the concept.
Sirsickofit writes: “People, please stop asking for information on the golf carts. … Stossel is trying to make a point!! If you purchase these carts you will be adding to the problems.”
I’d like my taxes (and government spending) cut, too, but I don’t want a manipulative favor from government — I’ll give my cart to charity.
The electric-vehicle subsidy is ludicrous not just because it is a form of industrial policy — which almost always picks losers — it’s also destructive because it creates more pollution, not less. That’s because much of the electricity needed for their operation comes from burning coal. As the National Research Council puts it:
“Although they produce no emissions during operation, they rely on electricity powered largely by fossil fuels for their fuel and energy intensive battery manufacturing.”
In addition, check out the complexity of the credit:
“(1) $2,500, plus (2) $417 for each kilowatt hour of traction battery capacity in excess of 4 kilowatt hours. Section 30D(b)(1) limits the amount of the credit allowed for a vehicle to amounts ranging from $7,500 to $15,000, depending on the gross vehicle weight rating of the vehicle.”
How many hours will accountants and tax lawyers waste over that?
Congress makes life worse every time it meets, and green hysteria sucks so many good things from the country.
Government is a meddling presumptuous pain in the neck. The sooner we get it to stop manipulating us through tax laws, the better.
Mr. Stossel is co-anchor of ABC News’ “20/20” and the author of “Myth, Lies, and Downright Stupidity: Get Out the Shovel — Why Everything You Know is Wrong”.
Copyright ©2009 HUMAN EVENTS, December 17, 2008. All Rights Reserved. Reprinted here January 7, 2010 with permission from Human Events. Visit the website at humanevents.com. Mr. Stossel is a consumer reporter, investigative journalist, author, libertarian columnist, and former co-anchor for the ABC News show 20/20. In September 2009 Mr. Stossel left ABC News and joined Fox News Channel and Fox Business Network. Visit his blog at stossel.blogs.foxbusiness.com.
1. What is the difference between a tax credit and a subsidy?
2. Do you agree with Mr. Stossel’s argument that a credit is better than a subsidy (from paragraph 10)? Explain your answer.
3. What is the main point of Mr. Stossel’s commentary?
4. a) Do you think Mr. Stossel has a persuasive argument? Explain your answer.
b) Ask a parent the same question.