Op-Ed: Tax credits for electric vehicles are a threat to Iowa farmers

Source: By Ed Wiederstein, Des Moines Register • Posted: Wednesday, December 12, 2018

For decades, our congressional delegation has been championing Iowa corn and soybean growers, and their efforts have paid dividends. An agriculture sector on the ropes in the 1980s is now thriving and a pillar of Iowa’s economy.

One of the biggest fights Iowa leaders have waged has been helping establish a market for biofuels, and today our state is the proud home of 44 ethanol plants, 12 biodiesel refineries and nearly 50,000 Iowa jobs tied to biofuels production.

But in the coming weeks, we will need our congressional leaders to step up again, against a new threat to our state: Tesla and other electric vehicle (EV) manufacturers are pushing to extend the $7,500 per-vehicle tax credit for EVs, a proposal Sen. Orrin Hatch (R-Utah), the current chairman of the Senate Finance Committee, favors. We will know soon whether the lame duck Congress will subsidize vehicles that have no need for Iowa’s ethanol (and corn).

It’s shocking that, with farmers and biofuel producers struggling, Republicans are weighing expanding tax subsidies for EV companies that no longer need government support. The proposal, which could be in a tax package voted on this month, flies in the face of promises made in 2008 when the tax credit was approved, stating that the credits would help establish the EV industry, then expire when a company’s sales hit 200,000, a target Tesla has achieved.

This regressive tax credit is using taxpayer dollars to assist purchasers of expensive vehicles (many Teslas cost more than $80,000) when more than 75 percent of those benefiting from the credit make more than $100,000 per year. Indeed, more than half of EV sales have been to people in California alone.

If anyone wants to buy an EV, fine, but it makes no sense for Iowans to support purchases of expensive cars that take money out of our corn farmers’ pockets and mostly benefit coastal elites.

In recent weeks, we’ve seen GM cut 14,000 jobs as part of their subsidy-fueled transition to an EV-filled fleet. Iowa farmers and ethanol producers won’t be helped by giving taxpayer money to auto companies cutting internal combustion engines from their product lines.

Iowa biofuel producers have established a market for their products. EV subsidies make it challenging for ethanol to compete and, over time, will put ethanol producers out of business. Here’s a simple fact: There is NO ethanol required for an electric motor.

Thankfully, Sen. Chuck Grassley (R-Ia.) is set to become chair of the Finance Committee, which would oversee passing these subsidies. He can influence the tax rules put into the legislation and influence Sen. Hatch to prevent the EV tax extension from passing. Now is the time for Sen. Grassley to stand up, once again, for Iowa.

We call on the entire congressional delegation to use all their influence to block the EV tax credit extension and secure the competitiveness of our ethanol industry.

Ed Wiederstein is a livestock and grain farmer from Audubon. He is a former president of the Iowa Farm Bureau.