Writing this week in the Washington Examiner, Alex Hendrie, the director of Tax Policy at Americans for Tax Reform charged Democrats are playing politics with the COVID-19 pandemic.
The following is his opinion piece.
“Instead of supporting broad-based policies that help workers and businesses through the coronavirus pandemic, Democrats are playing politics and using the crisis to push unrelated, long-held, far-left policy priorities.
For instance, many on the Left are pushing to extend and expand tax credits that subsidize wind and solar energy as part of a future COVID-19 relief bill.
There is no reason for lawmakers to pass legislation with these credits — they will do almost nothing to help the country through the pandemic and are no longer needed since renewable energy technologies are established and compete with existing energy sources. Instead, lawmakers should prioritize broad-based tax policies that assist businesses across the board.
Wind and solar tax credits were created 15 years ago as a temporary policy within the “Energy Policy Act of 2005.” The policies were intended to reduce dependency on foreign energy sources and promote new technologies and innovations.
A decade and a half later, wind and solar technologies are a profitable energy source that the government no longer needs to prop up with tax credits. Renewables currently make up 18% of total U.S. electricity generation and have seen strong growth in recent years. In fact, solar is projected to be cheaper than natural gas in just a few years.
Now that the renewables industry is self-sufficient and competitive, the credits are no longer needed, a fact that advocates of the policies have noted. Following the last major extension of credits in 2015, Senate Finance Committee Chairman Chuck Grassley, a Republican from Iowa and a longtime supporter of wind credits, said that these tax incentives should be allowed to phase out. The American Wind Energy Association agreed, noting that the 2015 phaseout was enacted with “strong bipartisan support” and that “growth in the wind industry is expected to remain strong when the [tax credit] is fully phased-out.”
Despite this, Democrats are using the COVID-19 crisis to push the expansion of these tax credits as part of their goal to expand subsidies for green energy and move toward a “Green New Deal.” This should not be surprising — several months ago, House Majority Whip James Clyburn told his fellow House Democrats that the pandemic was “a tremendous opportunity to restructure things to fit our vision.”
Since then, Democrats initially held up the bipartisan CARES Act over a wish-list that included wind and solar credits. The Left has since included expansion of these credits in partisan $1.5 trillion infrastructure legislation.
We have already spent trillions of dollars on policies designed to mitigate the damage of the pandemic. Moving forward, any policies should be specifically targeted to addressing the immediate economic and health damage caused by the pandemic directly.
In contrast to the Democratic effort to pass handouts to select industries, Ways and Means Republicans led by ranking member Kevin Brady, a Republican from Texas, have proposals that will help the businesses and workers.
Last month, Republicans introduced several proposals, including legislation that will help employers provide testing and cleaning to workspaces so that workers stay safe and businesses can safely reopen.
Republicans have also championed proposals that would encourage more investment and innovation, such as making full business expensing permanent and increasing the tax credit for research & development.
In addition, Republicans Rep. Jodey Arrington and Sen. John Cornyn have a proposal that would allow taxpayers to monetize various business tax credits for 2019 and 2020 as a way to get liquidity to businesses and workers.
While this would help many businesses, including wind and solar companies, these industries are reportedly pushing to have their own tax credits expanded rather than focusing on getting this broader proposal enacted into law.
Moving forward, there is no reason for Congress to expand and extend wind and solar tax credits, as some on the Left have proposed as a way to put the country on the pathway toward a “Green New Deal.”
If Democrats are looking to provide further assistance to the economy, businesses, and workers, they should instead work with Republicans to pass tax cuts and other policies that are targeted toward helping taxpayers through the crisis, not those that are a handout to narrow special interests.”
Alex Hendrie is the director of Tax Policy at Americans for Tax Reform.