Of Prius Buyers, Blue States, Consumer Energy Credits, and the Alternative Minimum Tax
Posted: 28 Oct 2005
Abstract
In this article Prof. Zelenak criticizes the disallowance for purposes of the alternative minimum tax of the new consumer energy credits contained in the Energy Tax Incentives Act of 2005, including the credit for purchasers of hybrid cars and other alternative motor vehicles. He argues that AMT disallowance makes no policy sense in the context of what may be the most transparently nontax tax provisions ever to appear in the code. He also predicts that the many taxpayers whose credits will be reduced or eliminated by the AMT will share his view of the irrationally of the AMT limitation, and will not suffer in silence. Without ascribing devious motives to the actual Congress, he speculates that some hypothetical Republican-controlled Congress might impose an AMT limitation on credits for purchases of energy-efficient products as a way of appear[ing] to be evenhandedly granting a subsidy to all energy-saving consumers, while in fact denying the subsidy to as many Democrats as possible.
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