On Tax Breaks, Should Congress Accept the Bad With the Good?

In Washington these days (and I suspect for most of our nation’s history), it’s hard to pass even the most popular legislation without it being amended, diluted, and sometimes poisoned with add-ons.

The Baucus-Grassley energy tax bill is a perfect example. Several provisions are just what we need to support the renewable energy industry and fight climate change. Via Earth2Tech:

  • Extension of the Production Tax Credit: The production tax credit for power generated via wind would be extended for one year and would extend for two years a similar credit for tidal and wave energy generation.
  • Extension of the Investment Tax Credit: The 30 percent tax credit for investing in solar, wind, geothermal and ocean energy equipment would be extended eight years, including residential solar installations.
  • Energy Efficiency Tax Credit: Homeowners could claim a 10 percent investment credit for eight years on energy efficiency measures like insulation and efficient windows, water heaters and heating and cooling equipment.
  • Plug-In Electric Cars Tax Credit: Consumers could collect a tax credit of $2,500 to $7,500 for the purchase of a plug-in electric car, depending on the capacity of the battery.

A large Congressional majority supports these kinds of tax breaks, and the only reason they’ve stalled out is the question of how to pay for them.

But rather than keep things simple (and green), Baucus and Grassley shoehorned language into the bill that supports “dirty fuels” like liquid coal. Not surprisingly, the enviro groups don’t like that one bit:

However, the bill currently contains several controversial provisions on dirty fuels that we urge Congress to strip before the bill becomes law. These dirty liquid fuel provisions in the bill would be a major setback in efforts to solve global warming. Extraction of these fuels – tar sands, oil shale and liquid coal – can produce more than twice the amount of global warming pollution as conventional oil. Supporting these fuels through tax incentives is completely at odds with mandatory carbon reductions that we expect Congress will enact in the near future.

Should Congress simply swallow the bill as is, or should supporters of a truly “clean” tax bill hold out for better legislation?

Personally, I don’t think clean energy supporters should back down, especially when they have popular opinion behind them. But what do you think?

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One Response to “On Tax Breaks, Should Congress Accept the Bad With the Good?”

  1. 9th Time’s the Charm? « Green Dollars and Sense Says:

    [...] Green Dollars and Sense « On Tax Breaks, Should Congress Accept the Bad With the Good? [...]

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