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As EV adoption increases, states are seeking to offset lost revenue from the gas tax. Here's what you need to know about kWh energy rates and EV charging taxes.
We examine the private and public economics of electric vehicles (EVs) and discuss when market forces will produce the optimal path of EV adoption. Privately, consumer cost savings from EVs vary. Some experience net benefits from choosing gasoline cars, even after accounting for EV subsidies. Publicly, we survey the literature documenting the external costs and benefits of EVs and highlight several themes for optimal policy design including, 1) promoting regional variation in EV policies that align private incentives with social benefits, 2) pursuing a time-path of policies that reflect changing marginal benefits, and 3) rationalizing electricity and gasoline prices to reflect their social marginal cost. On the extensive margin, purchase incentives should ramp-down as learning-by-doing and network externalities (to the extent that they exist) diminish; on the intensive margin, gasoline should become relatively more expensive over time than electricity (per mile traveled) to reflect cleaner marginal emissions from electricity generation.
CBO report on budgetary effects of H.R. 5376 (Inflation Reduction Act)
Beginning in FY 2016, tax expenditures rose rapidly and leveled off, but direct federal support remained steady until Congress recently enacted temporary provisions
During FY 2016–22, most federal subsidies were for renewable energy producers (primarily biofuels, wind, and solar), low-income households, and energy-efficiency improvements.
During FY 2016–22, provisions in the tax code were the largest source of federal financial support.
2022 update: According to a recent IMF report, the burning of coal, oil, and gas was subsidized by $5.9 trillion in 2020. This new way of calculating the proper pricing of pollution takes into account the health costs of air pollution and contributions to the impacts of global warming.