# The Transportation Freedom Act: What It Actually Does

This bill is a mixed bag that combines tax breaks for car manufacturers with rollbacks of environmental regulations. Despite its name suggesting "freedom," it's really about reshaping how cars are made and regulated in America. Here's what's actually happening.

The first major piece gives car manufacturers a significant tax deduction if they pay their workers well and meet specific requirements. Companies that manufacture cars or parts in the U.S. can deduct double the wages they pay to factory workers—but only if those workers earn at least the 75th percentile of wages for their job type (meaning top-tier pay), receive platinum-level health insurance, get solid retirement benefits, and the company shares profits with them when it distributes dividends. There's also a cap of $150,000 per worker per year on what can be deducted. The catch is that companies must keep production in the U.S., remain neutral during union organizing efforts, and assemble at least 75 percent of their vehicles domestically. This could incentivize better-paying manufacturing jobs, but only for companies willing to meet these strict conditions.

The second and more controversial part eliminates recent environmental regulations on vehicle emissions. The bill cancels EPA rules that required cars to produce fewer pollutants starting in 2027 and repeals fuel efficiency standards that were set to take effect in 2027. It also eliminates California's ability to set its own stricter vehicle emission standards—something the state has been allowed to do for decades. In their place, the bill requires the government to establish new, less stringent standards within 180 days, with a key requirement: these standards cannot require or encourage electric vehicle production. If new standards aren't established in time, the current 2025 standards simply continue. This means cars will likely produce more emissions than previously required, though the bill frames this as allowing manufacturers more flexibility and keeping gas-powered vehicles competitive.

For everyday people, this bill means potentially cheaper cars in the short term since manufacturers won't face the same pressure to invest in cleaner technology, but it also means worse air quality and higher long-term health costs from pollution. Workers in the auto industry might see better wages and benefits if their employer qualifies for the tax breaks, but the environmental rollbacks could have broader public health consequences for everyone.

Transportation Freedom Act

Balderson, Troy

Transportation Freedom ActThis bill reduces taxes on auto companies and repeals specified environmental regulations on cars and trucks.The bill establishes a new tax deduction equal to 200% of eligible wages paid or incurred by domestic producers of automobiles or automobile components, subject to limitations. It also allows an entity to reduce (and adjust) its financial statement income (for purposes of calculating liability for the alternative minimum tax) by the amount of eligible wages it elects to deduct.The bill nullifies the 2024 rules of the Environmental Protection Agency (EPA) regarding (1) the finalization of specified greenhouse gas (GHG) programs and the reduction of emissions from certain light-duty and medium-duty vehicles (e.g., cars and trucks that are under a certain weight) starting with model year 2027, and (2) phase three of GHG emission standards for heavy-duty vehicles (e.g., school buses and tractor-trailer trucks).It also repeals the 2024&nbsp;rules of the National Highway Traffic Safety Administration (NHTSA) regarding corporate average fuel economy (CAFE) standards for certain cars, trucks, and vans.&nbsp;Additionally, the bill eliminates (1) the option given to California to set standards for car emissions that are more stringent than those set under the Clean Air Act, and (2) the option for other states to adopt California's standards.&nbsp;NHTSA and the EPA must establish new CAFE and GHG standards, respectively, for vehicles that are&nbsp;economically practicable and technologically feasible. The GHG standards may not require the production or sale of electric vehicles.