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E-bike benefit left out of Inflation Reduction Act

Published July 29, 2022

WASHINGTON (BRAIN) — The Inflation Reduction Act of 2022 looks to be on track for Senate passage after a surprise agreement between Sen. Joe Manchin III (D-W.Va.) and Senate Majority Leader Charles E. Schumer (D-N.Y.) this week. While the bill contains climate change provisions that bike advocates favor, it leaves out the electric bike tax credit and other bike-related measures that were part of President Joe Biden's Build Back Better Act, which passed the House last year but then died in the Senate, in part because of Manchin's opposition. 

PeopleForBikes said the legislation "misses a massive opportunity by neglecting to invest in an electric bicycle tax credit and other critical initiatives to promote biking for transportation."

The League of American Bicyclists said, "We are incredibly frustrated we weren’t successful in getting an e-bike tax rebate in the bill. We haven’t given up, and we’ve learned quite a bit in the process."

Senate Democrats are preparing the legislation for a vote and hope to get it to Biden's desk as early as next week. With Manchin's support, the bill will likely receive the 51 votes needed to pass the Senate, although Arizona's Sen. Kyrsten Sinema has yet to say whether she will vote for it. 

The E-BIKE Act that was included in the House legislation would have provided a tax credit that could be applied to the purchase of a new e-bike (the first $3,000) up to $900 benefit value, and up to a $4,000 bike. The House legislation also contained the Bicycle Commuter Act, which would have reinstated a tax benefit that was suspended in 2017. Both are missing from the new bill.

"Both policies are popular, simple and effective tools our nation could leverage for emissions reductions, but were deprioritized to make more room for cars," wrote PeopleForBikes' Noa Banayan in a blog post Thursday. Banayan is the organization's director of federal affairs.

Banayan said the new legislation has one bright spot for cycling: bike infrastructure projects would be eligible as a tool to promote equity and mobility as part of the $3 billion included for the Neighborhood Access and Equity Grants. The program is intended to remove the infrastructure that divided and disadvantaged Black, Brown and low-income communities.

The League's Caron Whitaker said the E-BIKE Act was a hard sell because of the way congressional committees estimated its likely cost. In a post Thursday, Whitaker said, "The Joint Committee on Taxation estimated that a maximum rebate of $750/person on e-bikes (only for those making $75,000 or less) would have cost $7.4 billion over 10 years. The same budget office estimated that a tax rebate on electric cars with a minimum of $4,000 and a maximum of $12,000/person (for those making $400,000 or less) would have cost $15 billion over ten years. PeopleForBikes and other industry voices did talk with the committee, but given the lack of experience with e-bikes, the estimate discouraged Congressional offices from supporting this over other programs in the bill."

Whitaker said if more states pass state e-bike tax incentives, advocates may be able to better estimate the actual cost of such programs. "We may be able to show a federal rebate would not be as high as previously estimated," Whitaker said. 

Getty image.
Topics associated with this article: Electric bike, Advocacy/Non-profits

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