« links for 2008-05-23 | Main | False Signals »

Friday, May 23, 2008

Will Tax Credits for Renewables be Renewed?

Tax credits for investment in renewable energy projects are in danger:

Tax credits for renewables, Editorial, LA Times: You don't have to be an environmentalist, or even a believer in global warming, to support tax credits for renewable energy ... at a time when prices for fossil fuels are soaring. Yet congressional Republicans and the Bush administration are willing to let existing credits expire because they don't want to close a tax loophole for multimillionaire hedge-fund managers. ...

The House on Wednesday passed a $54-billion package of tax breaks, of which incentives for clean energy account for a little under $20 billion. Because generating solar, wind or geothermal power involves steep upfront expenses, the tax credits are vital. ... Yet even though the incentives enjoy wide bipartisan support, efforts to extend them have repeatedly failed because members of Congress can't agree on how to pay for them.

The House bill passed 263 to 160, but that's not enough to overcome a threatened veto from President Bush. The bill's fate in the Senate, meanwhile, is highly uncertain given opposition from Republican leaders.

Many Republicans object to the credits because they would be offset by postponing an obscure tax break for corporations with foreign operations that was supposed to take effect next year, and by cracking down on hedge-fund managers, who would no longer be able to avoid billions of dollars in taxes by diverting money to offshore havens. Thus, while middle-class Americans are struggling with skyrocketing energy costs, these lawmakers are standing in the way of alternative energy sources in order to defend an unfair tax loophole for the mega-rich. ...

The trouble with the House bill isn't that it proposes unreasonable new taxes, it's that it doesn't go far enough -- it extends the tax credit for wind power for just one year, far too short-term a guarantee to make investors comfortable. Still, it's a good next step until President McCain or Obama or Clinton brings a savvier approach to the White House.

    Posted by on Friday, May 23, 2008 at 12:24 AM in Economics, Environment, Taxes | Permalink  TrackBack (0)  Comments (2)

    TrackBack

    TrackBack URL for this entry:
    https://www.typepad.com/services/trackback/6a00d83451b33869e200e5528e216d8834

    Listed below are links to weblogs that reference Will Tax Credits for Renewables be Renewed?:


    Comments

    Feed You can follow this conversation by subscribing to the comment feed for this post.