Newly elected Sen. Bernie Moreno is investigating nearly $22 billion in tax credits stemming from President Biden’s Inflation Reduction Act that the Republican says are now subsidizing luxury electric vehicle purchases nationwide.
Biden’s $891 billion law authorized a host of renewable energy initiatives — which could end up costing US taxpayers up to $1.2 trillion over the next decade — but Moreno (R-Ohio), a former auto dealer, claims that criteria for green tax credits meant thousands of dollars have been doled out for well-off Americans to buy plush Rolls Royce and Porsche EVs.
“COVID has a special place in history as bad public policy, but this EV credit will be up there in terms of truly the worst public policy in American history,” the Ohioan predicted. “It’s obscene public policy.”
The subsidies — known as the clean vehicle credit, credit for qualified commercial clean vehicles and the credit for previously owned plug-in electric vehicles — are projected to cost $21.7 billion over the next five years, according to an economic analysis compiled last month by the Joint Committee on Taxation.
“These dopes who have no idea what they’re talking about,” Moreno said of his new Democratic colleagues who voted for the Inflation Reduction Act, “they’ve come up with these criteria that lobbyists are telling them what to put in.
“They came up with the criteria and said, ‘Well, you can’t make more than $300,000 a year,’ which, by the way, is a lot of money,” Moreno said of the $7,500 per purchased EV credit, known as 30D. “A car can’t be over $80,000 … that’s a lot of money, right?”
Another credit known as 25E, according to Moreno, has juiced resales of used EVs like Teslas by shelling out $4,000 to dealerships for every car sold.
There’s also another $7,500 credit for selling commercial vehicles like garbage trucks, though Moreno explained that dealers have exploited a “leasing loophole” to take advantage of it.
“Commercial use is a term of art in a car business — that means a lease,” he said, adding that more than 70% of EVs sold in America are leased.
After signing a lease agreement, the buyer can then briefly lease a car for half of the purchase price before buying it for the residual value without paying any interest.
“Ends up being the same price, but he took $7,500 from the government. … Every car company and every dealer is aware of this,” Moreno added, showing The Post paperwork for one such agreement.
“This is Porsche explaining to their dealers how to get $7,500 on every Porsche that’s electric. All these cars [cost] well into the high hundred-thousands.”
In a letter to IRS Commissioner Daniel Werfel, Moreno requested the “total dollar value” of all the tax credits tucked into the green energy bill that are now being borne by taxpayers.
“The cost of the bill is exponentially more than what [the Congressional Budget Office] had estimated,” he said, estimating that it’s likely the EV credits are costing as much as $50 billion annually.
“Whether they knew it was in there or not, either one is pretty bad,” he said of Biden and the Democrats who passed and implemented the legislation. “Because if they knew, then they’re terrible people, because they’re taking taxpayer dollars away from middle-class Americans to subsidize their millionaire donors, or they didn’t know … [and are] either too stupid or too lazy to read the bills.”
According to Moreno, the IRS has wired car dealerships the $4,000 or $7,500 handouts for each car since the Inflation Reduction Act was signed — and should have records of the total amount spent, the demographics of the car buyers and the initial sticker price of the car.
The senator has asked for the full audit to be completed by Friday, and said he hopes to introduce legislation to repeal the tax credits entirely.
The Post has reached out to the IRS requesting comment.
