GOP Proposes Shift of US EV Jobs to China, Funds for Elites
TL/DR –
US Republicans have proposed a new tax bill that eliminates various clean energy credits, originally established under President Biden’s Inflation Reduction Act, which were being used to increase energy efficiency and boost American manufacturing. Provisions under threat include the $7,500 EV tax credit which has stimulated major growth in the American manufacturing sector and the rooftop solar credit, the removal of which could increase the cost of solar installations by an average of $10,000. The new proposal, which has been criticized for favoring wealthy elites, is expected to add $3.7 trillion to US debt.
Republicans Propose Tax Plan Reversing Clean Energy Credits
The US Republicans have proposed a new tax plan that eradicates numerous tax credits aimed at assisting families to become more energy efficient, improve US air quality, and boost US manufacturing. Instead, the proposal redirects these funds towards wealthy individuals, with the potential to increase the deficit by trillions of dollars.
The 389-page proposal includes provisions to eliminate several popular clean energy credits, initially established under President Biden’s Inflation Reduction Act, which significantly benefited American manufacturing.
These credits raised billions of dollars by enforcing taxes on wealthy individuals and corporations, subsequently channeling the funds into energy efficiency credits for US families. American households have been able to save thousands of dollars via these credits, reducing energy costs through home upgrades.
Moreover, the credits have been instrumental in boosting American manufacturing. For example, the $7,500 EV tax credit was restricted to cars that completed final assembly in North America, which amplified American manufacturing, driving significant investment and creating numerous jobs.
However, Republicans in Congress aim to roll back much of this progress. The harmful effects of the new proposal, as outlined by the BlueGreen Alliance, include imposing restrictions on clean energy and manufacturing tax credits, repealing Clean Vehicle and Hydrogen Tax Credits, and clawing back unspent funds for air quality monitoring in schools, clean manufacturing, state and community energy programs, and electric grid upgrades. The proposal also severely impacts several Inflation Reduction Act programs and initiatives.
Analyses suggest that the repeal of these tax credits could lead to increased electricity prices for all Americans. The bill, in particular, eliminates the US EV tax credit, which has driven significant investment due to domestic manufacturing provisions.
Unfortunately, poor policy decisions, such as tariff chaos, have already had a detrimental effect on manufacturing. This is evident in several companies pausing or canceling plans to establish manufacturing facilities in North America.
Concerningly, the proposed cuts in the tax plan do not serve a broader budgetary purpose. While the Inflation Reduction Act was revenue-positive, the Republican tax bill is revenue-negative, which means it will increase the deficit.
The Republican proposal raises the debt ceiling by $4 trillion. The Joint Committee on Taxation estimates it will add $3.7 trillion to US debt. These increases are largely attributed to the bill’s significant giveaways to wealthy individuals, with the majority of tax cuts aimed at the country’s wealthiest households.
Your representative on Congress’ website can provide more information. If you have a Democratic representative, it is still worth voicing your opposition to this tax bill.
Before the proposed tax plan potentially raises the cost of installing rooftop solar by ~$10,000, you can start the installation process now. EnergySage is a free service that connects you with pre-vetted solar installers competing for your business.
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