April 11,
2013
Irresponsible Senate Finance
Committee Action on Wind Energy Tax Break
Once again, the Senate Committee that manages to make life
miserable for millions of tax-paying Americans with its manipulation of the US
Tax Code, is acting to aid its friends, punish ordinary taxpayers, and load
another $85 billion in debt on our children and
grandchildren.
On April 3, 2014, by “voice” (no fingerprints) vote, the Senate
Finance Committee reported out an $85 billion tax break ”extender” bill -- which the Committee calls the “EXPIRE
Act.” [1]
The bill includes billions in
unwarranted tax breaks for special interests, including the wind
industry.
As long as Congress fails to pass a balanced budget, every dollar
provided to special interests in this $85 billion “Extender” bill is a direct
addition to the national debt that will be dumped on our children and
grandchildren. Further, each dollar
that Congress adds to the national debt will be DOUBLED in about 15 years due to
interest that will accrue on that debt.
An egregious example of an unwarranted special interest tax break
in the Finance Committee’s bill is Senator Grassley’s wind and other renewable
energy “Production Tax Credit” (PTC) and “Investment Tax Credit” (ITC). Grassley insisted on extending this
20-year old “temporary” tax break for another 2 years at a cost, according to
the Joint Tax Committee, of more than $13 billion over the next 10 years (and
more thereafter).
When Senator Toomey attempted to eliminate unwarranted energy tax
breaks from the bill, Republican Senators Grassley, Cornyn, Thune, Crapo, &
Portman[2]
joined Finance Committee Democrats in voting to keep the massive energy tax
breaks in the bill!
The votes for
Grassley’s $13+ billion wind PTC and ITC extension to benefit “wind farm” owners
would result in an equal addition to future generations’ debt burden! Under
Grassley’s measure, owners of “wind farms” would be able to continue reducing
their corporate income tax liability by $0.023 (adjusted upward for inflation)
for each kilowatt-hour (kWh) of electricity produced by their wind turbines
during the next 10 years.
The wind PTC was initially passed in 1992 as a temporary incentive
to help a then fledgling industry – with the expectation that wind energy would
be environmentally benign and would become commercially viable. However, after nearly 40 years of
subsidies for wind energy R&D and 20 years of lucrative wind energy tax
breaks -- together totaling over $100 billion:
·
Electricity from wind remains high in true cost and low in real
value[3]
– with the wind industry providing no evidence that electricity from wind will
ever become commercially viable (i.e., without large tax breaks and subsidies).
·
Producing electricity from wind has proven to have numerous adverse
environmental, economic, electric system reliability, scenic, and property value
impacts not originally foreseen and still not admitted by wind industry
advocates; and
Eight Republicans[4]
(some
claiming to be “conservatives”) and 110
Democrats in the US House of Representatives have signed a
letter to House leaders urging
extension of the wind PTC. The
tax-writing House Ways & Means Committee hasn’t taken up the wind PTC, but
one of the wind industry’s Washington lobbyists has bragged that
the wind industry still
has "very strong support from Democrats in the House and strong support from
some, but not all, of the Republicans."[5]
Last December, Senator Grassley told constituents in Iowa that the
costly wind Production Tax Credit (PTC) would be extended soon. “…Congress will come back after the New
Year and approve four dozen or more tax credits.” “There are a lot of economic
interests”…represented in the tax credits.
Those interest groups collectively “put a lot of pressure on Congress to
re-institute the credits’[6]
In addition to wind industry lobbyists, Grassley undoubtedly was
referring to such Washington establishment organizations as the US Chamber of
Commerce, National Association of Manufacturers, and Business Roundtable. Organizations such as these once
championed private enterprise but now seem to be heavily influenced by member
companies that:
·
Have concluded that there is less
risk and more profit in “mining” Washington for tax breaks and subsidies than in
pursing truly innovative and productive activities in private, competitive
markets.
·
Have no problem in accepting special
interest tax breaks that load debt on future
generations.
The April 3rd action by the Senate Finance Committee
certainly helps explain why a recent Gallup Survey shows that Congress currently
has a 13% favorability rating. If
the nation’s “Millennials” understand how the Congress is adding to the debt
that they and their children will bear, they may assign an even lower
rating!
Glenn R. Schleede
Ashburn, VA 20147
[1]
Expiring Provisions Improvement Reform
and Efficiency (EXPIRE) Act.
[2] See
“Results of [Senate Finance Committee] Executive Session.040314” download 4/9/14
from: http://www.finance.senate.gov/
[3]
Electricity is produced by wind turbines only when wind speeds are in the right
range (starting around 6 MPH, reaching rated capacity around 32 MPH, and cutting
out around 55 MPH). Electricity
from wind turbines is, therefore, low in value because it is intermittent,
volatile, unreliable, and most likely to be produced at night in colder months,
not on hot weekday afternoons when most needed. Reliable generating using conventional
energy sources must always be available to maintain stable electric grids and a
reliable electricity supply.
[4] King
(IA), Lucas (OK), Runyan (NJ), Fitzpatrick (PA), Gibson (NY), Latham (IA), Noem
(SD). Cole (OK).
[6] The
Gazette (Cedar Rapids, IA), December 11, 2013.
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