Credit Where Credit Is Due

And it's not due to you. NYTimes (07.30.05):

"Tucked away on page 1,391 of the 1,724-page energy bill approved by Congress this week is a new tax credit intended to make fuel-efficient vehicles like hybrids more appealing to consumers. But as is often the case with tax credits, the devil is in the details. The bill limits the number of vehicles eligible for the credit. That means automakers like Toyota and Honda that have more developed programs will see their vehicles become ineligible faster than companies like DaimlerChrysler and General Motors, whose advanced hybrid technology will not be available until later this decade." Congress Caps Credits for Hybrid Cars

"By capping the credit, Congress has limited the incentives available to companies that have been at the forefront of hybrid technology." "'Ironic isn't it?' said Ed Cohen, Honda's vice president for government and industry relations. 'It really does create market mismatch.'" To recap, a tax credit generally is a dollar-for-dollar reduction of your taxes, no limits, no threshholds, no matter what. The details:

• The credit depends on how fuel efficiency a vehicle is, and "ranges from $250 to $3,400".
• The credit phase-out starts after a given automaker sells 60,000 eligible vehicles.
• At that point, the automaker "has the remainder of that fiscal quarter plus one additional quarter in which buyers of its vehicles can receive the full credit."
• For two quarters after that, "buyers would receive 50 percent of the credit."
• For two quarters after that, "the credit is 25 percent."
• From then on, nothing.

There is somewhat of a budgetary reason though. We can't really even afford this. "[T]ax breaks not only for hybrids and cleaner diesel engines but for fuel cell and alternative fuel vehicles as well" will run around $874 million. Fill 'er up, and put it on the Visa.