Energy Bill and Prius

None of our discussions are going to mean squat until the President signs on the dotted line.

I'm holding with baited breath here hoping if there are any changes to the sections we are referring to, it would be for the better, as in more $$$.

 

Highway Bill for Prius HOV use.

Energy Bill is the bill that does absolutely nothing to conserve Energy. It just subsidizes the poor Oil and Energy companies, that have only been making record profits, to continue to do what they're doing only do more of it everywhere.

Here's the only part that pertains to hybrids:

"About $1.3 billion in tax breaks are earmarked for conservation and efficiency programs, including credits for buying hybrid gas-electric cars and energy efficiency improvements in homes."

I wouldn't hold my breath since the hybrids are going to have to share with conservation and efficiency programs.

Energy Bill Passes

"WASHINGTON - A national energy plan that would send billions of dollars in tax subsidies to energy companies passed the House on Thursday despite criticism from many lawmakers that it would do nothing to dampen high prices or lessen dependence on Middle East oil.

Supporters said the legislation would establish a framework for developing a wider mix of energy sources in coming years, including wind turbines, lower-pollution coal plants and new nuclear reactors.

"Lawmakers avoided a certain fight in the Senate by leaving out one of President's Bush's top energy goals: opening the Arctic National Wildlife Refuge in Alaska to oil drilling. House Republicans promised to pursue that issue separately.

(Alaska gets a reprieve.)

"Other major provisions in the legislation include:

• Subsidies and tax breaks for wind, geothermal and solar industries and for technology aimed at making coal more environmentally friendly.

• New efficiency standards for commercial appliances from air conditioners to refrigerators.

• A requirement for utilities to meet federal reliability standards for the electric transmission grid, in hopes of avoiding blackouts like the one in the summer of 2003.

• Easing the way for more imports of liquefied natural gas by giving federal regulators final say over terminals.

• Spurring construction of new nuclear power reactors by offering loan guarantees and "risk insurance" against regulatory delays for the initial units to be built.

• A nationwide inventory of offshore oil and gas resources. Critics said they're concerned the inventory may lead to drilling in areas now off-limits.

A provision that had passed the Senate to require the president to find ways to reduce U.S. oil demand by 1 million barrels a year by 2025 was abandoned because of strong opposition from House Republicans and the administration. "

(Or would that be a strong opposition from their major campaign contributors?

How many gas guzzlers would have to be replaced by Prius-equivalent hybrids to meet that goal? )

When Hybrids turn NASCAR.

"This year hybrid buyers can take a $2,000 federal tax deduction based on the idea that hybrids are more fuel-efficient and produce fewer emissions. But lower pollution is achieved mostly through smaller engine size. Leaving an identical V-6 in the vehicle brings only a small improvement when the electric assistance kicks in.

The point? Hybrids can be used either to save fuel or to boost power. A tax credit that blindly gives a break to all hybrids doesn't necessarily reward fuel saving.

Congress is expected to pass an energy bill by Friday that apparently will address this flaw. It will base its tax credit on how much better gas mileage the hybrid achieves compared with a comparable non-hybrid model.

If designed for fuel conservation, hybrid vehicles can play a role in helping to break America's gasoline addiction. As an Environmental Protection Agency report leaked to The New York Times Thursday shows, US cars and trucks are getting bigger, heavier, faster - and less fuel efficient.

Car buyers who want to buy "green" should be sure that the hybrid they're considering really saves fuel. And federal policy should reward hybrids that cut demand for foreign oil - not subsidize faster muscle cars."

 

That, or a veto override.

 

Interesting note, from cnn.com:

"The tax credit for a Toyota Prius, for example, would range anywhere from $2,500 to $3,000, according to Toyota."

This was contained in a section of an article about the national energy bill that discussed the tax credit for hybrid cars.

Click here to read the entire article.

 

Senate passed.

Now let's see who's the first to have to use their tax break to pay for asthma medication!

-m.

 

Re: Energy Bill and Prius limited by manufacturer

I think Toyota is screwed on this energy bill. I've seen two different caps on the number of hybrid cars (80,000 or 60,000) that any one manufacturer can make for the hybrid credit. Since this bill takes affect for purchases starting Jan 1, 2006, the best thing to do right now is to buy a hybrid Jan 1. If Lexus is added in the Toyota total, they will hit the cap by March. This will force anyone looking for a hybrid to go over to GM, the only hybrid is a Hybrid Silverados (that get 19mpg) over the regular Siverado that gets 18mpg. What a crock! The fact that diesel engines got added to this section of the bill is another crock!

From the WSJ:

Tax Credits for Hybrid Cars

One of the biggest new tax breaks is an auto industry-backed tax credit, valued at thousands of dollars for some vehicles, for buying a hybrid car -- one that uses both gasoline and electricity -- or a vehicle powered by electricity or fuel cells. The tax credit, which replaces a less generous tax deduction, is linked to the weight and fuel efficiency of the vehicles.

For fuel-cell-powered vehicles weighing less than 8,500 pounds, for instance, the base credit will be $8,000; heavier vehicles will get bigger credits. Additional credits are offered for cars and light trucks that are more fuel-efficient than 2002 models. (A tax credit gives the taxpayer a dollar-for-dollar reduction in his or her taxes.)

The tax breaks for hybrids are smaller, and the bill limits the number of hybrids sold by any one manufacturer that can claim the credit. The pending highway bill has additional incentives to encourage the purchase of hybrids, which in general are $3,500 to $5,000 more expensive than standard vehicles. Most of the credits apply to vehicles purchased or leased from the beginning of 2006 through the end of 2009.

For cars powered by natural gas, liquefied natural gas, any liquid fuel that is at least 85% methanol or certain other alternative fuels, the tax credit is based on a complex formula that factors in the cost, weight, emissions and fuel efficiency of the vehicle.

The energy bill also extends an existing tax credit, for as much as $4,000, for buyers of electric cars or those powered by rechargeable batteries.

 

Hi
A tax credit is much better- it would be straight $2,000 off the taxes you owe. A deduction reduces your gross income so you are taxed an a smaller amount so the savings is much less..
Say you make 60,000 and paid 28% tax bracket (for example only) This would mean you owe $16,800 in taxes. A $2,000 credit means you only pay $14,800.
A deduction, however would come off your gross ($60,000- $2,000) which means your adjusted gross is $58,000 and you would still pay 28% on this or $16,240. THe savings for a deduction then, would only be $16,800 - $16240 or $560 versus $2,000 for the tax credit..

Hope this helps!!

 

I just thought of something. Does the tax credit for hybrids specified in the energy bill apply to Purchasers of hybrids, or manufacturers? It doesn't otherwise make sense since you can't determine when you are doing your taxes whether you can take the credit or not.