Only The Well-off Buy New Cars So Using Tax Revenues To Help Them Isn't Fair

10th October 2023

It's not a justifiable use of public money to incentivise electric car purchase because the people who are buying them generally don't need the financial help to do so. Buying a new car is an activity of people heavily concentrated at the top of the income spectrum, and it's an entirely voluntary thing to do.

There are enough new car sales every year as it stands to replace the car stock every 15 years or so. This is driven by people with money, choosing to spend that money on something they want. Deciding that it's right to divert money from something which could help the poorest in society to help those on middle incomes to buy a new car wouldn't be something to recommend.

Even if we were talking about more affordable electric cars, that's still tens of thousands of pounds that the vast majority of the country wouldn't think about spending in that way. So subsidies would still be taken up by those on higher incomes, which is not a progressive way to approach a tax and spend policy.

By Jonathan Marshall - senior economist at the Resolution Foundation.

Read the full article at Auto Express