Let Ethanol Subsidies Expire For Good
Matt Kibbe
Forbes
12.09.10, 04:00 PM EST
America's ethanol experiment has been a costly disaster
In November voters across America made clear their frustrations with runaway spending, bailouts, and special-interest dollars sloshing through Washington. Yet the lame duck session threatens a return to business as usual as corporate interests scramble for federal favors.
One particularly bold example is the ethanol lobby, which is mounting a full-court press to renew expiring tariffs and tax protections that raise consumer prices while doing little to improve energy independence or the environment. Lawmakers should do nothing and allow the ethanol program to expire.
At midnight on Dec. 31, the Volumetric Ethanol Excise Tax Credit, which includes a 54 cent tariff on imported ethanol and a 45 cent tax credit for every gallon blended with gasoline, will come to an end. Some in Congress appear to have recognized the public sentiment against such corporate giveaways given that 17 senators--led by Dianne Feinstein, D-Calif., and Jon Kyl, R-Ariz.--have signed a letter against continued largesse for ethanol.
As they state, subsidizing blending ethanol into gasoline is fiscally indefensible. If the current subsidy is extended for five years, the Federal Treasury would pay oil companies at least $31 billion to use 69 billion gallons of corn ethanol that the Federal Renewable Fuels Standard already requires them to use. We cannot afford to pay industry for following the law. Even Al Gore has admitted he was wrong to support ethanol subsidies.
(More here.)
Forbes
12.09.10, 04:00 PM EST
America's ethanol experiment has been a costly disaster
In November voters across America made clear their frustrations with runaway spending, bailouts, and special-interest dollars sloshing through Washington. Yet the lame duck session threatens a return to business as usual as corporate interests scramble for federal favors.
One particularly bold example is the ethanol lobby, which is mounting a full-court press to renew expiring tariffs and tax protections that raise consumer prices while doing little to improve energy independence or the environment. Lawmakers should do nothing and allow the ethanol program to expire.
At midnight on Dec. 31, the Volumetric Ethanol Excise Tax Credit, which includes a 54 cent tariff on imported ethanol and a 45 cent tax credit for every gallon blended with gasoline, will come to an end. Some in Congress appear to have recognized the public sentiment against such corporate giveaways given that 17 senators--led by Dianne Feinstein, D-Calif., and Jon Kyl, R-Ariz.--have signed a letter against continued largesse for ethanol.
As they state, subsidizing blending ethanol into gasoline is fiscally indefensible. If the current subsidy is extended for five years, the Federal Treasury would pay oil companies at least $31 billion to use 69 billion gallons of corn ethanol that the Federal Renewable Fuels Standard already requires them to use. We cannot afford to pay industry for following the law. Even Al Gore has admitted he was wrong to support ethanol subsidies.
(More here.)
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