Sixty-four free-market groups send letter to Congress opposing wind tax credits

Michael Bastasch | Contributor

On Friday a group of 64 free-market organizations sent a letter to Congress opposing the extension of the “wasteful” wind production tax credit, which is set to expire at the end of this year.

“It is time to end special tax provisions that distort the energy market and increase energy prices. We urge you to let the wasteful wind PTC expire as planned at the end of the year,” says the letter, organized by the group Americans for Prosperity.

The letter was also signed by notable free market organizations, including the National Taxpayers Union, FreedomWorks, the Club for Growth, the Competitive Enterprise Institute and the American Energy Alliance.

“Whenever the government protects a particular industry, as it has with wind energy production, the industry tends to remain dependent on it,” the letter continues.

The wind production tax credit was created in 1992 in order to jumpstart the wind industry, but 20 years later the wind industry is still being subsidized by taxpayers, the letter argues.

“We’re still providing a $5 billion special tax break each year for an industry that supplies just over 2% of our power,” according to the letter.

The tax credit gives 2.2 cents for each kilowatt hour of wind energy produced for their first ten years of operation. In 2010, the government spent $5 billion on wind subsidies alone, with nearly all of it coming from stimulus dollars. This is a tenfold increase from 2007 spending on wind subsidies, according to the Energy Information Administration.

Republican presidential candidate Mitt Romney and House Speaker John Boehner have come out in opposition to the extension of the tax credit.

“Mitt Romney believes it is a time for a new approach to ensure our nation’s energy independence. 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,” Romney spokesman Shawn McCoy said.

The tax credit extension not only receives support from President Barack Obama and congressional Democrats, but has some Republican backers as well.

A group of freshman House members sent a letter to the GOP leadership to take up the extension issue. The letter was signed by a bipartisan group including Republican Rep. Kristi Noem of South Dakota, Republican Rep. Rick Berg of North Dakota and Democrat John Carney of Delaware.

Republicans in the Senate are split on the issue as well, as Sens. Jerry Moran of Kansas and John Boozman of Arkansas were among the Republicans who joined Democrats in a letter to Senate leadership urging them to take up the extension issue.

In August, the Senate Finance Committee approved the business tax extenders bill would extend the current credit for one year until December 31, 2013, which the CBO estimates would cost $12 billion over ten years.

“American consumers—not Washington lawmakers—should decide the future of American energy,” says the letter.

Congress has renewed the credit seven times and let it expire three times since it was enacted in 1992.

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