Recent John Locke Foundation Headliner Timothy P. Carney says in his latest Washington Examiner article that scrapping a federal renewable energy tax credits ought to make sense to politicians on both sides of the partisan divide.
If Democrats really share the Occupy Wall Street goal of reducing wealth inequality, they could start by allowing the corporate welfare tax credits expiring this month to die forever. And if Republicans really believe in the free market and in tax reform, they’ll do the same.
The poster child for corporate welfare-through-the-tax-code might be a renewable-energy “tax credit” program created by Section 1603 of President Obama’s 2009 stimulus bill. …
… This provision gives out “tax credits” for renewable energy, but the credit is not dependent on actually producing electricity. Instead it is awarded for simply investing in renewable energy facilities. More importantly, you can get the “tax credit” even if you pay no taxes.
Putting an even finer point on it, the “tax credit” is really a grant. A month after you make the investment you get a check from the Treasury Department. So the 1603 program is just a transfer payment from taxpayers to companies investing in solar and wind.