IRS move means more tax dollars for wind power
The Internal Revenue Service adjusted the Wind Production Tax Credit for inflation this week — an increase that will cost taxpayers $545 million dollars, according to the Institute for Energy Research.
“In one fell swoop, the IRS gave wind energy more than twice the amount President Obama wants for his proposed energy security trust in a single year,” said IER senior vice president Daniel Kish.
The IRS adjusted the tax credit for wind power upward from 2.2 cents to 2.3 cents, a percentage increase higher than the latest inflation numbers released by the Bureau of Labor Statistics for the last twelve months up to February 2013.
“Not only has the wind lobby succeeded in pushing Congress to award the industry another ten years of taxpayer funded subsidies — totaling $12 billion — but now they have the IRS forcing taxpayers to pay even more to prop up energy they can’t use and don’t need,” Kish added.
According to IER, the IRS inflation adjustment for wind power funds could have been used to extend other federal programs that are seeing cuts due to the sequester. For example, programs to vaccinate children could have been extended for more than 60 years. Nutritional assistance for seniors could have been extended for more than 13 years, and funding for disabled children could have been extended another 11 months.
“[T]he White House continues to play sequester games and cancel White House tours, which cost $3,848,000 a year,” Kish said. “Essentially, the cost of today’s action by the IRS could have paid for 130 years of White House tours.”
However, Ellen Carey, media relations manager at the American Wind Energy Association, told Platts that the inflation adjustment has been done since Congress created the wind tax credit.
“It’s a nondiscretionary adjustment based on inflation — a simple formality,” said Carey.
The wind PTC was extended through 2013 as part of the “fiscal cliff” deal to avoid automatic tax increases and spending cuts.
“Extending the wind Production Tax Credit is a long-overdue dose of certainty for manufacturers who employ more than 5,000 Coloradans and 60,000 workers across America,” said Colorado Democrat Sen. Mark Udall, said in support of extending the tax credit.
The federal Wind Production Tax Credit was implemented in 1992 to get the wind industry on its feet, and has since been renewed seven times. The Joint Committee on Taxation reported that a one-year extension of the wind PTC alone would cost $12.1 billion.
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