Driving Off Into the Loophole

According to an article in the New York Times this weekend, many new hybrid cars don’t save much in the way of gas–they just accelerate faster. While first generation hybrids (like the Honda Insight and Toyota Prius) were genuine friends of the environment, the same cannot be said of some newer models:

The 2005 Honda Accord hybrid gets about the same miles per gallon as the basic four-cylinder model, according to a review by Consumer Reports, a car-buyer’s guide, and it saves only about two miles a gallon compared with the V-6 model on which it is based. Thanks to the hybrid technology, though, it accelerates better Hybrid technology, it seems, is being used in much the same way as earlier under-the-hood innovations that increased gasoline efficiency: to satisfy the American appetite for acceleration and bulk.

This should be of obvious concern to environmental activists and politicians, including President Bush, who point to hybrids as a way of reducing pollution and dependency on foreign oil. But it should be joyous news for a different demographic: stingy tax evaders. After all, the Times article continues,

Despite the use of hybrids to achieve better performance with about the same fuel economy, consumers who buy the cars continue to get a tax credit that the Internal Revenue Service allows under a “clean fuels” program that does not take fuel savings into account.

This adds tax fraud insult to environmental injury. And if Bush’s proposal to let “every American who purchases a hybrid vehicle receive a tax credit of up to $4,000″ goes through, the insult to honest Americans will only get worse. These tax credit laws might have the right idea, but they are useless (if not harmful) when they are so easily circumvented by carmakers and buyers who lack good intentions, or just want to go a bit faster.

- Conor Clarke