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Whitmer’s car rebate plan is vanity spending

The state has no compelling interest in using dollars contributed by all taxpayers to help buy new cars and trucks for a select few Michigan residents, with the most money going to those whose vehicle preferences align with Gov. Gretchen Whitmer’s ideological agenda.

That’s what the governor wants to do with $25 million that is apparently burning a hole in her pocket.

Whitmer says her proposed MI Vehicle Rebate is aimed at stimulating new car sales in the state. Twice before she’s tried to get it through the Legislature, and it was rebuffed.

This time, she’s cut the appropriation in half from the original ask of $50 million and expanded eligibility in hopes of faring better.

It fits into her green energy strategy as well as her ongoing pay-off to the labor unions who helped elect both her and a Democratic Legislature.

Consumers would get a $2,500 rebate from the state if they buy a new electric or hybrid vehicle made in a unionized facility; the amount drops to $2,000 if the same type of vehicle is built by non-union workers.

Buyers of a traditional gasoline-powered, union-made car or truck would get a $1,500 tax credit, while similar vehicles made in non-union facilities would qualify for $1,000. Previous versions of the bill only covered EV purchases.

The state rebates on EVs would combine with the $7,500 federal subsidy for certain electric vehicles.

Justification for spending the $25 million, according to the governor’s office, is to alleviate costs for residents and help out automakers, who are a significant piece of Michigan’s economy.

Car sales, however, remain strong, despite last fall’s lengthy strike against the domestic automakers.

North American sales for 2023 are expected to be up 13%, according to J.D. Power. Michigan continues to be among the top car-buying states, accounting for 493,000 sales in 2022, sixth most in the nation.

Whitmer’s proposal isn’t needs-based. Wealthy car buyers will be able to claim rebates the same as lower-income consumers.

This limited-rebate plan is a poor substitute for the broad tax relief Whitmer has refused to deliver, despite having had $9 billion in surplus funds to work with in the latest budget. Instead, a small reduction in the income tax rate triggered by the excess revenue is being clawed back by the governor this month.

Programs like the one Whitmer is requesting are an example of what happens when government has more money than it needs to take care of the core services citizens expect it to deliver.

Politicians and policymakers see that pile of cash and start figuring out new ways to spend it.

This is vanity spending, designed to boost Whitmer’s standing with select groups, including environmentalists, unions and automakers. But it will do nothing to improve the overall quality of life in Michigan.

The $25 million Whitmer wants for her rebate program is not likely to spark a car buying boom. Nor is it broad enough to provide meaningful financial relief to residents.

That would require a bold cut in the income tax for all taxpayers, and that’s not something Whitmer and the Democratic Legislature have been willing to do.

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