By Congressman Brad Sherman
Taxpayers who purchased a new hybrid vehicle in 2003 could claim a tax deduction of up to $2,000 on Form 1040. Unfortunately, this tax deduction for qualified clean-fuel vehicles is set to be reduced incrementally for purchases in 2004, 2005, and 2006 and expire completely on December 31, 2006.
Currently, the tax deduction is available to purchasers of a Toyota Prius, Honda Insight, or Honda Civic Hybrid and applied to expected models such as the 2004 Ford Escape and a General Motors pickup due in 2005, which average 50 miles per gallon (mpg) in the city.
Our priorities seem to be confused when 2004 buyers of H1 Hummers (9 mpg, city) can receive one hundred thousand dollars in immediate tax deductions, but deductions for fuel efficient hybrids are being substantially reduced.
As it is, Congress has a poor record of promoting environmentally-friendly programs. We should be promoting public transportation, crafting an energy plan -- one that is not written by the energy industry -- and requiring higher corporate average fuel economy (CAFE) standards so that new vehicles get better mileage than today's vehicles.
The CAFE standard for passenger automobiles is 27.5 miles per gallon (mpg), but only 20.7 mpg for light trucks, a classification that also includes vans, minivans, and popular sport utility vehicles (SUVs). More efficient vehicles are not only better for the environment, but they reduce our dependence on foreign oil.
Recently, I introduced the Clean Fuel Vehicle Promotion Act, which would promote environmental preservation by encouraging consumers to purchase hybrid automobiles. My legislation would extend the tax deduction available to those who purchase a hybrid in 2003 to purchases in 2004, 2005, and 2006, thus encouraging purchases as the new technology develops.
My proposal not only has bipartisan support, it has been applauded by the Sierra Club. The organization issued a statement saying: Hybrid vehicles go farther on a gallon of gas to clean up our air, cut America's oil dependence, and curb global warming. Congressman Sherman's bill will make it easier for Americans to bring more clean cars onto the road and start saving money at the gas pump.
Congress can, and should, demonstrate our commitment to environmental preservation and to applying new technologies by maintaining the tax deduction for clean-fuel vehicles. Passing the Clean Fuel Vehicle Promotion Act is an easy way to prove that we are serious about preserving the environment.