To the People

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or TO THE PEOPLE.

Thursday, July 05, 2007

The Idiocy of Raising CAFE Standards and Giving Tax Breaks to Hybrids

Congress and the media have lately gone wild over global warming. Their proposals, however, make no sense even if you agree with their goals.

The reason is that Congress has been focused on the wrong thing to help reduce emissions: the vehicle that one drives versus how much one actually drives. Congress has showered big tax breaks to drivers of hybrids and is proposing dramatically increasing the average mileage of cars sold in the US.

Congress gave tax deductions to hybrid drivers of up to $3,150 for a hybrid owner. This means that a commuter who drives 200 miles a day to work gets rewarded with a big tax deduction, while someone who takes public transit, walks to work, bikes or works at home gets nothing and de facto subsidizes the long-mileage commuter.

The proposed CAFE standards could basically make illegal high-performance cars. But should the Metro commuting worker be disallowed his weekend zoom while his Prius driving co-workers guzzle gas all week long on their 200 mile daily commute from Loudon County into DC, and they get a big federal tax break to boot?

This exemplifies the worst tendency of Congress: it manipulates the tax code to pick winners and losers. Even worse, it rarely gets it right.

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