Thursday, 12 January 2012 17:01

Pennsylvania Congressman Proposes Repeal of $7,500 Electric Vehicle Rebate

Congressman Mike Kelly (R-PA) introduced into the House of Representatives on December 30 a bill aiming to do away with the $7,500 tax credit for electric vehicle car buyers, titled HR3768.

Kelly, who owns a Chevy Car Dealership in Butler, Penn., has served in the House representing the 3rd District of Pennsylvania since 2010.

The bill, formally titled: "To amend the Internal Revenue Code of 1986 to repeal the credit for plug-in electric drive vehicles", would amend the IRS code section related to the electric car purchase tax credit, to terminate the tax credit.

The $7,500 tax credit came into being in the Emergency Economic Stabilization Act of 2008 (EESA), whose main purpose was the bailout of the financial industry following the meltdown of Sept 2008. The credit was put in place by former President George W. Bush, and continued by President Barack Obama.

Kelly's personal experience as a dealership owner is suspected to have fueled his introduction of this bill. Kelly's dealership, which was founded by his father, was almost axed during the GM bankruptcy. When the Obama Administration Auto Task Force announced plans to shut down more than 1,900 dealerships, including Kelly's own dealership, his response was to fight the decision to close his dealership, in which he was successful.

Reports are that after avoiding shut-down Kelly's own car dealership took extra steps to shun the Chevy Volt, even going to far as to fire an employee who consented to GM's request that they bring in a Volt.

"I can stock a Chevy Cruze, which is about a $17,500 car and turns every 30 to 40 days out of inventory or I can have a Volt, which never turns and creates nothing for me on the lot except interest costs," said Kelly in October. "There is no market for this car."

Kelly echoes the main argument espoused by many anti-EV advocates—-that electric cars are simply toys for rich people. Kelly says that subsidizing the purchases of upper-income individuals is not the correct course of action to take during these difficult financial times. According to Kelly, the $7,500 credit goes to the "few who can actually afford to buy an electric car."

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