Creating fairness in the tax code for wind power

Another example of how the tax code is skewed to help the rich and how one congressman is attempting to fix it:

An energy incentive is drifting in the wind

By JOHN FARRELL
Minneapolis Star Tribune
May 1, 2008

A wind turbine can power up to 600 homes, but 600 homeowners can't get together to own a wind turbine. Why? Because federal law makes local ownership virtually impossible.

Here's how. The federal wind tax credit of 2 cents per kilowatt-hour can be taken only against taxes on passive income. Passive income does not include wages or salary; it only counts income from investments or real estate. Most Americans do not have any passive income. Those who do have very little. Thus wind turbines are financed by a handful of firms that attract investments from a few hundred or a few thousand wealthy individuals who can use the tax incentives.

The federal wind-energy incentives -- up for renewal this year -- discriminate against local ownership and favor absentee ownership. They also severely restrict the number of investors who can finance wind-energy generators.

Changing the incentives would pave the way for rural Americans to own wind turbines and for the economic benefits of wind energy to truly accrue to the host community's advantage. It would reward self-reliance. And it would level the playing field for average citizens.

Continued here. John Farrell is a research associate with the Institute for Local Self-Reliance in Minneapolis. More about the proposal is here.