GOP Tax Plan Eliminates BILLIONS In Green Energy Subsidies
The GOP’s plan to overhaul the U.S. tax code includes changes to green energy tax subsidies that lawmakers say will save taxpayers billions of dollars every year.
Republicans want to modify production and investment tax credits for green energy projects, including wind turbines and solar panels, and push for eliminating subsidies for purchasing electric cars.
However, the plan also calls for extending, then phasing out, a 30 percent tax credit for buying solar energy equipment. Republicans would also allow green energy production and investment tax credits continue to phase out, and not eliminate them immediately.
The GOP also wants to eliminate a tax credit for enhanced oil recovery and make sure tax credits for advanced nuclear energy production are made available before the program expires.
Changes made to green energy production tax credits would save taxpayers $12.3 billion over ten years, according to the tax bill’s summary. The plan reduces payments for green energy generation from 2.3 to 1.5 cents per kilowatt hour and more narrowly defines when a project can qualify.
Wind energy producers have been a primary beneficiary of the production tax credit. Wind turbines have popped up all over the country in recent years, largely due to state energy mandates and generous tax subsidies.
Conservative groups generally applauded the tax plan, but said production and investment tax credits for wind energy should be immediately eliminated.
“A termination of the Investment Tax Credit and the Production Tax Credit is of the highest order of importance,” Tom Pyle, president of the American Energy Alliance, said of the tax plan.
“With that said, this plan takes us in the right direction by maintaining the scheduled expiration of the Production Tax Credit for wind energy and phasing out the temporary credits for wind and solar established by the 2015 PATH Act,” Pyle said.
According to the GOP plan, changes made to the investment tax credit, which mostly benefits solar power, will reduce federal revenues $1.2 billion. That tax credit is on schedule to phase out in the coming years.
Environmentalists were less thrilled with the GOP tax plan, calling it a handout to “polluters.” Activists specifically criticized limiting tax credits for green energy and electric vehicles.
“Their plan barely touches huge tax giveaways for fossil fuels,” Ana Unruh Cohen, director of government affairs at the Natural Resources Defense Council. “Congress should put clean energy back in the driver’s seat, for the good of our communities, economy and future generations.”
The GOP proposed doing away with tax credits for electric vehicles, which they say would be part of a larger package saving taxpayers $4 billion over ten years. That number also includes tax credits for adoption and disabled seniors.
However, the GOP did target major tax policies the oil and gas industry often takes advantage of, including a tax credit for domestic manufacturing.
Currently, domestic producers can write off 9 percent of their qualified production activities — companies involved in certain oil and gas activities can write off 6 percent. Eliminating this deduction will increase revenues $95.2 billion over ten years, according to the plan.
Republicans also call for repealing tax credits for enhanced oil recovery and producing from marginal wells. Both these credits, however, are basically defunct because of the price of oil.
The tax bill also eliminates special treatment for U.S. companies with foreign oil revenues. Interestingly enough, repealing that provision is expected to reduce federal revenues nearly $4 billion over a decade.
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