Your Turn: Electric vehicle subsidies are a hidden energy tax
Small businesses, farmers and most hardworking folks in Minnesota are facing expensive increases in the cost of almost everything right now. Groceries, gasoline, fertilizer, supplies, labor costs and more are all up.
And a recent survey from the National Federation of Independent Business shows less than half of small-business owners expect better business conditions in the next six months. On main street, record numbers are raising prices just to keep up with inflation.
All this is on top of Minnesota being an island of high taxes in our region. According to the nonpartisan Tax Foundation, the average Minnesotan pays thousands more every year in state and local taxes than Iowans, North Dakotans, South Dakotans and Wisconsinites. And the gap with Iowans will only widen after their new 3.9 percent flat income tax takes effect.
Still, some politicians in the Minnesota Legislature are bent on making life here even more expensive. In the last two years, we’ve seen progressive lawmakers in St. Paul propose big increases in income taxes, small-business taxes, gas taxes, payroll taxes and more.
They’re also determined to raise taxes on our energy bills. Progressives in the Minnesota House are pushing a new tax on electricity to cover the cost of rebates for electric vehicles, EV chargers, electric boats, electric bicycles and even electric planes.
And who benefits? According to the National Bureau of Economic Research, 70% of federal EV subsidies went to people who would have bought one without them.
The House Energy bill doesn’t stop there. It hands out millions more in taxpayer-funded subsidies for electric city buses, even though electric buses have been an expensive failure in Duluth and the Twin Cities due to high cost, poor range and charging malfunctions.
Driving these taxpayer and utility customer-funded subsidies are lofty goals set by those who see EVs as necessary to lower transportation emissions. The Walz administration set a goal for EVs to comprise 20% of all vehicles by 2030 and advocates want an all-EV future.
How much this would end up costing small businesses and other taxpayers is anyone’s guess. Minnesota only has about 15,000 fully electric cars out of over five million passenger cars and trucks on the road today.
Getting over a million EVs on our roads by 2030 would take an astronomical increase in EV sales and likely require massive public subsidies. One Minnesota utility recently proposed a $150 million tax on its customers so they could give out electric car and bus rebates.
An all-EV future, according to one estimate, could cost $85 billion in Minnesota — over three times the annual state budget.
Whatever the cost, it’s clear that progressive lawmakers expect taxpayers and utility customers to foot a big chunk of the bill.
The 10,000 small businesses represented by NFIB in Minnesota strongly reject raising taxes or fees to pay for EV handouts. In a recent member survey, 94 percent opposed these subsidies because it’s expensive enough to keep a small business going in Minnesota.
That’s why NFIB supports a new proposal to stop taxpayer-funded EV giveaways. That bill, authored by state Sen. Jeff Howe, R-Rockville, and state Rep. Mary Franson, R-Alexandria, would prevent hidden taxes in electric bills that pay for EV giveaways.
Let car makers, not Minnesota taxpayers, make EVs more affordable and practical.
Instead, let’s make Minnesota’s tax system more competitive for small businesses, stop the unfair unemployment insurance tax hikes, focus on rebuilding roads and bridges, and go after waste and fraud in government.
We hope the Minnesota Legislature will go for practical solutions, not expensive handouts.
— John Reynolds is the Minnesota state director for the National Federation of Independent Businesses.
This article originally appeared on St. Cloud Times: Your Turn: There's an energy tax hiding in electric vehicle subsidies
