Fact: Tax breaks to the oil and gas industry cost taxpayers more than the electric car tax credit.
Myth: The federal government is picking winners and only subsidizing cars that few drive.
Explanation: The cost of the electric car tax credit (EV tax credit) is a tiny fraction of the lost tax revenue that results from permanent tax breaks to the oil and gas industry. In his 2018 study for the Manhattan Institute, Jonathan Lesser argues that the EV tax credit is costing the U.S. treasury hundreds of millions. To be precise, in 2017, this total was $670 million. However, according to the treasury’s own figures, fossil fuel subsidies and tax credits cost $4.7 billion annually, with the oil and gas industries claiming at least three-quarters of that total.
If Congress repealed just nine tax breaks commonly used by oil and gas companies, as the Center for American Progress has calculated, the U.S. Treasury would save an average of $3.7 billion every year.
- Center for American Progress: “It Is Time to Phase Out 9 Unnecessary Oil and Gas Tax Breaks“
- Wall Street Journal: “Does the Oil and Gas Industry Still Need Tax Breaks?”
This post is one in a series produced to combat the misinformation campaigns attacking electric cars. To see all of the FACTS that combat the MYTHS perpetuated by the Koch network and Big Oil, check out EV Facts.