Environment Versus Jobs
Now that the infrastructure bill has been officially passed, the Democrats have now set their undivided attention on the social spending bill, which has stirred lawmakers on both sides of the House. The goals of the bill are to help combat climate change and improve the social mobility of America, with one of the aspects being jobs.
One part of the bill that has spurred heavy debate is Biden’s proposal to give consumers the full 12,500-dollar tax write-off if they buy an electric vehicle that was built by union workers, but only 4,500 dollars if they purchase an EV that was manufactured by non-union factories. This tax-credit was written by two Michigan Democrats in cooperation with GM and the UAW, and the reactions have been mixed.
Union groups have backed this tax-credit with complete support. There are climate groups like the Sierra Club and Energy Innovation, who are supportive of the credit because they believe Biden is balancing the goals very well, specifically on climate and union jobs. The UAW said that this will create thousands of jobs and preserve them too as fewer employees are needed to build EV cars, which means that prioritizing union jobs will be important. The backlash, however, has come from big corporations like Tesla and Toyota, who both use non-union factories. In a tweet, Tesla CEO Elon Musk said that Biden is a UAW puppet, and Toyota said that the government shouldn’t be playing politics with the environment. They make interesting points as they are industry leaders in the auto industry, and more specifically the EV industry, so placing an incentive to buy other’s EVs would hurt the environment as there are fewer electric vehicles being used. The backlash side could be stronger, leading to Biden cancelling the idea, but it’s possible that they stick through with it. What do you think about the tax-credit?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.