Why is the hybrid tax rebate phased out?

Question

Apparently the tax rebate on hybrids in the US is eventually phased out:

"To get the tax credit you'll have to wait to buy the vehicle until after Jan. 1. If you buy one of the first 60,000 qualifying vehicles that your automaker sells or buy one in the first three months after the quarter in which that sales total is reached, you'll get the maximum rebate allowed for that vehicle. After that, the tax credit starts to phase out."

http://seattletimes.nwsource.com/html/nationworld/2002447385_hybridbreak21.html

This is causing the rebate on Toyota and Lexus hybrids to be completely phased out by October 1st:

http://www.fueleconomy.gov/f*g/tax_hybrid.shtml

http://www.irs.gov/newsroom/article/0,,id=169884,00.html

Anybody know the reasoning behind this phase-out? It doesn't make any sense to me. It seems like we should continue to encourage the purchase of hybrids regardless of how many have been sold.

Answer 1

Because we have an oil man for president.

If you buy a Hummer over 6000 pounds you can get a tax credit of up to $100,000.00.

Answer 2

It is to encourage the purchase of hybrids but not break the bank over it. I guess the theory is that once they get popular enough they should be able to survive on their own. the per manufacturer aspect is obviously welfare for the domestic manufacturers who have been lagging in hybrid technology.

Answer 3

Probably because idiotic politicians feel that once a certain number of hybrids are sold, they no longer need tax rebates to continue sales success.

Answer 4

W

Answer 5

because they have to fund the tax breaks for Hummers from somewhere

http://www.bankrate.com/brm/itax/biz_tip...

and people need hummers to compensate - original tag line of the was  "Restore your manhood." http://www.sierraclub.org/compass/2006/0...

Answer 6

I am speculating wildly as I don't have any knowledge of US situation.  Here in the UK what is often called "pump priming" money is granted to new developments (not just in technology).  It is never intended to be permanent.  The idea is just to help to establish a new development not to permanently fund it.

Answer 7

Tax rebates and incentives exist to encourage some behavior that the government desires, but people may not otherwise do.  It has become obvious that this behavior will take place without an incentive, so away goes the rebate.  (Which is not the same thing as raising taxes)

Answer 8

because if you want a hybrid, GREAT!

why do you think i should help you buy it?

would you support a tax break so i can buy parts for my race car?