Transportation Freedom Act

This bill ties support for U.S. car-making to high-wage, high-benefit jobs, and resets national rules for car and truck pollution and gas mileage. It gives qualifying auto and parts makers a major tax break: they can deduct 200% of certain factory workers’ pay, up to $150,000 per worker, when those wages are at or above the 75th percentile for that job and industry. Only wages for workers who directly build vehicles or parts count . To qualify, companies must build most vehicles and key parts in the U.S., avoid moving production overseas, offer platinum-level health coverage to workers and retirees, provide strong pensions or a 401(k) with at least a 10% employer contribution, stay neutral during union organizing, and share at least $2,000 per worker when paying very large one-time dividends or stock redemptions. This change would apply to tax years after the bill becomes law .

It also cancels recent federal vehicle pollution and fuel-economy rules, ends special permissions that let states set different vehicle standards (and revokes past permissions, including for California), and then requires new national standards. The Environmental Protection Agency and the Department of Transportation must set new rules within 180 days for model years 2027–2035, and those rules cannot require automakers to make or sell electric vehicles. If deadlines are missed, the 2025 rules would remain in place through 2035. Meeting the fuel-economy rules would count as meeting the greenhouse-gas rules, and vice versa, even if a company uses credits or pays penalties. For heavy-duty trucks, new standards start no earlier than model year 2027; until they’re finalized, older standards from 2016 apply .

Key points

• Who is affected: Auto and parts makers and their factory workers; state air regulators that set vehicle rules .
• What changes: A 200% tax deduction for qualifying companies on certain high-wage manufacturing jobs, capped at $150,000 per worker .
• Worker standards to qualify: U.S.-based assembly and parts production, no offshoring, platinum-level health coverage, strong pensions or a 10% employer 401(k), neutrality during union drives, and profit-sharing when large one-time dividends or redemptions are paid .
• State rules: Stops states from having their own different vehicle standards; past state permissions are revoked.
• New national rules: EPA and Transportation must set them within 180 days for model years 2027–2035; the rules cannot force EV production or sales; meeting one set of rules counts for the other .
• Timing: The wage deduction applies to tax years after enactment; recent federal rules are canceled on enactment; if agencies miss deadlines, 2025 rules stay in place through 2035; heavy-truck rules start no earlier than model year 2027, with 2016 standards used in the meantime .