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Mitt Romney actually stood for bold colors yesterday. For conservatives, it should be the biggest story of the week.
Conservatives are rightfully focused on the impending tax cliff that is facing American taxpayers at the end of the year. But we must not forget the subsidy cliff either. Dozens of special interest tax preferences, known as tax extenders, are slated to expire at the end of the year. Those extenders related to green energy are nothing more than handouts ensconced in the tax code. We must be vigilant of any effort to slip in these extenders as part of a final agreement on the broader tax issue
At the end of every calendar year, Congress passes a ‘tax extenders’ bill to temporarily reauthorize specific tax breaks that have not been permanently written into law. These bills have traditionally dealt with issues like the AMT patch, the R&D business credits, and universal deductions for depreciation, as well as state and local taxes.
In recent years, tax extenders have been magnets for non-universal carve-outs for green energy. Some of those carve-outs, such as the 30% Investment Tax Credit (ITC) and the 45-cent per gallon Volumetric Ethanol Excise Tax Credit, have already expired. Other handouts, like the lobbyist-driven 2.2 cent/per kilowatt-hour Production Tax Credit (PTC) for wind, is slated to expire this December 31. In both cases, there is still time to reauthorize the tax credits because they are backward-looking and do not affect withholdings.
We must kill them now.
While almost every Republican likes to poke fun of Obama for Solyndra and his solar subsidies, wind subsidies are, for some reason, in vogue with many members. The American Wind Energy Association (AWEA), the most vocal supporter of the PTC, is busy lining the campaign coffers of members on both sides of the aisle. The PTC is a refundable tax credit, one that the industry openly admits to serving as the lifeblood of wind production. Proponents of big wind have posted an elaborate PDF showing just how many jobs will be lost if the PTC is not extended. The problem is that they are proving our point. If an industry cannot sustain a single job without the government, they should wait until their product becomes more profitable and actually works in the real world. Their spurious predictions of future success are just not grounded in reality at this point. They’ve been predicting that self-sufficiency would be just around the corner for the past 35 years.
Thankfully, Mitt Romney has come out strongly against this boondoggle. The Des Moines Register reports that Romney has definitively ruled out extension of the PTC:
“He will allow the wind credit to expire, end the stimulus boondoggles, and create a level playing field on which all sources of energy can compete on their merits,” Shawn McCoy, a spokesman for Romney’s Iowa campaign, said in the statement. “Wind energy will thrive wherever it is economically competitive, and wherever private sector competitors with far more experience than the president believe the investment will produce results.”
This is welcome news to those of us who are looking for a fight over free markets, especially in the energy sector. The federal government’s promotion of this inefficient energy source, in conjunction with state mandates on wind and solar, has contributed to the rising cost of electricity – just the way Obama wanted it.
A number of Republican governors and members of Congress are jumping on the corporate welfare bandwagon. Kudos to Romney for not joining them and for tossing out some red meat for us free marketers. More please!