The Senate is currently considering a package of expired business-related tax provisions called “tax extenders.”
Although this legislation includes some praise-worthy extensions, such as permanent bonus depreciation, most of the provisions are wasteful, corporate welfare that benefit special interests at the expense of American taxpayers. The main handout for wind energy, the wind production tax credit, falls squarely in the latter category.
Even though people at the grassroots level are overwhelmingly opposed to extending sweetheart deals and handouts to special interests, their elected officials are often unwilling to stop the sweetheart deals.
AFP PHOTO/Tony KARUMBA
Two notable exceptions to this rule are Sens. Lamar Alexander (R-Tenn.) and Jeff Flake (R-Ariz.). This week in Washington, these two senators are doing the right thing and standing up to special interests in the wind energy industry.
Writing in the Wall Street Journal, Sen. Alexander recently called on his colleagues to reject efforts “to resurrect Washington’s most conspicuous, wasteful taxpayer subsidy—the wind-production tax credit.”
He correctly pointed out how this handout for Big Wind is too costly, threatens the reliability of the electricity grid, and “destroy[s] the environment in the name of saving the environment.”
Speaking on the Senate floor on Monday evening, Sen. Flake also made the case for letting expired subsidies for wind energy stay expired. He walked through the long history of the tax credit, how it has outlived its initial goal of developing an infant industry, and how Congress has voted eight times to extend it.
“There’s now another effort afoot to resurrect what can only be described as a zombie credit,” said Sen. Flake.
This Nov. 3, 2012 photo shows wind turbines, alongside an electrical tower, at the National Wind Technology Center, run by the U.S. Department of Energy, outside Boulder, Colo.Credit: AP
Sen. Flake also talked about how the amount of the wind tax credit often exceeds the wholesale price of electricity that wind farm producers pay the market to take their power—”that’s a whopper of a subsidy,” Sen. Flake remarked.
More important than words, Sen. Flake introduced two important amendments to the tax extender package that will limit federal handouts for wind energy.
His first amendment would strike the two year wind tax credit extension from the Senate’s tax extender package—the amendment that Sen. Chuck Grassley (R-Iowa) sponsored during committee and the one that Americans for Prosperity opposed.
His second amendment would heighten the eligibility requirement for wind farms, changing the definition from “under construction” to “placed in service." This means that wind farms would have to actually be producing electricity in order to claim the credit.
AFP applauds Sens. Alexander and Flake for their leadership on this issue. Their colleagues in Congress should follow their example in standing up to special interests—in the wind energy industry and others—as they consider tax extenders legislation. Expired wind subsidies should stay expired.
Christine Harbin Hanson is the issues campaign manager at Americans for Prosperity, the nation’s premier free market grassroots organization, where she sharpens her unique insight on the economic issues that matter most to Americans.
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