As payroll tax deal nears, calls grow to include tax extenders
The calls come after reports yesterday that an extension of the renewable energy production tax credit could be included in the deal, although it remains unlikely.
Still, the wind energy industry is pushing hard for an extension of the credit that grants companies that produce electricity from wind, solar, geothermal and certain plants a 2.2-cent-per-kilowatt-hour subsidy for the first 10 years of the facility’s operation. That credit is set to expire at the end of this year.
The credit has been in place since 1992 — although it has been extended several times — and the American Wind Energy Association says it has led to 47 gigawatts of new wind capacity.
The wind industry push gained some extra backing today when a group of corporations called on Congress to include the extension in the payroll tax package.
The production tax credit “has enabled the wind industry to slash wind energy costs — 90 percent since 1980 — a big reason why companies like ours are buying increasing amounts of wind energy,” the corporations — including Starbucks, Campbell Soup, Yahoo Inc. and Nike — wrote in a letter to congressional leaders. “… Failure to extend the [production tax credit] for wind would tax our companies and thousands of others like us that purchase significant amounts of renewable energy and hurt our bottom line at a time when the economy is struggling to recover.”
Other companies signing on to the letter are Levi Strauss & Co., Annie’s Homegrown, Clif Bar, Staples, New Belgium Brewing, Aspen Skiing Co., Ben & Jerry’s, Anvil Knitwear, Seventh Generation, Stonyfield Farm and The North Face.
The credit also enjoys support from Democrats.
“We must act quickly. If we do not extend the production tax credit for wind by the end of the first quarter of this year, we will start to see lost jobs, slowed momentum and idled U.S. factories,” Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.) wrote in an editorial last week in The Hill. “By not supporting these industries — that is, by not offering the certainty and predictability that businesses need — we are making a decision to abandon young, promising companies that have already created tens of thousands of jobs.”
But many Republicans are opposed to its extension.
Sen. Lamar Alexander (R-Tenn.), one of its staunchest opponents, this morning urged colleagues to abandon any ideas of including it in the payroll tax package.
“I cannot think of anything that would derail more rapidly the consensus that is developing about extending the payroll tax deduction than to do such a thing,” Alexander said this morning during a floor speech. “Let’s not even think about putting this tax break for the rich in the middle of an extension of a tax deduction for this week.”
Alexander said the money spent on the credit — $27 billion over 10 years, by his count — would be better spent on research into other clean energy technologies, like improving carbon capture and storage, reducing the cost of solar and building better batteries.
“We do not need to extend the production tax credit for wind at a time when we’re borrowing 40 cents out of every dollar, at a time when natural gas is cheap and nuclear power is clean and more reliable and less expensive,” Alexander said.
“The Wall Street Journal says that the wind power companies are on pins and needles waiting to see what Congress decides to do about its subsidy,” Alexander added. “Taxpayers, I would submit, should be the ones on pins and needles.”
Click here to read the letter.