Tax Credits Proposed for Fuel Efficient Vehicles

On Jan. 18, 2012, Rep. Kucinich introduced legislation (H.R. 3784) that, in addition to imposing a windfall profit tax on oil and natural gas, would establish an income tax credit for purchases of fuel-efficient passenger vehicles.  Known as the “Gas Price Spike Act of 2012,” the legislation would establish tax credits (ranging from $3,000 to $6,000) for the top 10% of fuel efficient vehicles.  To qualify, the vehicles must be assembled in the U.S. by individuals employed under a collective bargaining agreement.  To get the $6,000 credit, the vehicle fuel economy must be at least 65 mpg.  To get the $4,500 credit, the vehicle’s fuel economy must be in top 5% relative to fuel economy.  If a vehicle is in the top 10% range, but not the top 5%, then it would earn a $3,000 credit.  The credits would apply to taxable years ending after the date of enactment.  The bill was referred to the Committee on Ways and Means as well as the Committee on Transportation and Infrastructure.