Effects of Stimulus Bill not be seen until the next two years
According to the recently concluded conference on the Stimulus Bill, everything pretty much stays the same. There are tax credits added for plug-ins that won’t be out until the next two years or so, but no tax credits are mentioned for the purchase of hybrid vehicles available today.
Otherwise known as the American Recovery and Reinvestment Act of 2009, this stimulus bill is worth $787 billion all in all. Presently, it gives up to $2500 tax credit for buyers of low-speed new electric vehicles. However, this has been criticized as a “pork barrel” for golf carts.
On the plus side, however, it allows new car buyers this year to deduct the local and state taxes paid on their vehicle purchases from their annual federal taxes. While $1.7 billion is allocated to fund this tax deduction, this move received a lukewarm reaction from consumers, probably because they won’t be seeing the figures realized until the end of 2009.
Once the next generation plug-in hybrids and fully electric vehicles are introduced into the market, consumers will be better able to see the benefits of this stimulus bill. Tax credits reaching up to $7500 are offered to buyers of 4-wheeled plug in vehicles with 4 to 16 kilowatt-hours of battery power loaded in them. At least 1 billion of the total funds are allocated for this particular tax deduction.
Also on a more positive note, the bill also expands the limit of the tax credit program from 250,000 hybrid cars all-in-all. The stimulus bill’s limit is now a total of 200,000 plug-ins and hybrids per manufacturer.