U.S. Government wants to Increase Clean Car Federal Tax Credits to $10,000

President Barack Obama is determined to make cars in the U.S. as clean as possible. After reaching an agreement with major manufacturers about the 54.5 mpg CAFE target set for 2025, he now plans to increase the federal income tax credit for alternative fuel-powered cars.

The proposal, which is included in the 2013 budget, raises the maximum credit by as much as US$2,500 for certain plug-in models. Currently, the maximum tax credit is US$7,500.

Under the provision, vehicles with a MSRP of US$45,000 and above would received up to US$7,500, while models below that price would be eligible for the full US$10,000 credit.

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