Monday, August 08, 2005

Federal tax subsidies in action.

There's a $2,000 tax deduction you can get for buying a new vehicle with gas-electric hybrid engine. Most people think of this as a gas-saving subsidy to promote fuel economy. But...
The hybrid version of the Lexus sport utility wagon follows in the tracks of the 2005 Honda Accord Hybrid by offering more horsepower than the conventional version of the same vehicle ... [without] even a nominal improvement in gas mileage [NY Times]
Hey, we've got a federal horsepower subsidy!

Now, recall how the government's CAFE fuel economy regulations created the SUV and see the result of fuel-saving regulations compounded: SUVs with extra horsepower!