Reps. Kenny Marchant (R-TX) and Mike Pompeo (R-KS) introduced a bill H.R. 1901 to phase out a renewable energy tax credit. Any effort to rid the tax code of cronyism and special interest tax provisions should be applauded.
Cronyism is one of the most disturbing aspects of Washington, DC. We see allegations of Hillary Clinton using her former position as Secretary of State to funnel foreign money into her family foundation.
The Bush Administration bailed out Wall Street when they pushed and passed the Troubled Asset Relief Program (TARP) for friends on Wall Street.
The Obama Administration rewarded donors with billions in energy contracts with the failed solar panel company Solyndra being a classic example of political favors for Obama‚??s pals.
Repeal of the Renewable Energy Production Tax Credit (PTC) will go a long way to removing one special interest provision in law that is in place to reward green energy proponents.
This bill will forward the ball on tax reform. Rep. Marchant argued ‚??if we want to build a healthier American economy, Congress must get rid of the deadweight in the tax code that is limiting our nation‚??s potential.‚?Ě This is a small but important step in ridding the tax code of every single corporate special interest tax provision.
The purpose of taxes should not be to incentivize certain activities or to punish other activities. For example, tax provisions that promote home ownership, like the mortgage interest tax credit, and sin taxes like high cigarette taxes are attempts to engage in social engineering using the tax code. That is wrong.
The purposes of taxes are to collect money to pay for government. True tax reform should replace the current code with a flat tax at a rate that pays for only the programs that the constitution authorizes for expenditures. Good luck finding a provision in the constitution that authorizes tax provisions for the purposes of getting private citizens to build wind farms.
There are special problems with this provision. Nicolas Loris of The Heritage Foundation wrote in a report titled Let the Wind PTC Die Down Immediately, ‚??the Joint Committee on Taxation estimates that extending the PTC one year would cost taxpayers $6.1 billion over 10 years, and a five-year extension would cost over $18 billion over the same time frame.‚?Ě Taxpayers should not be spending billions to support private enterprise.
Loris went on to argue ‚??rather than creating a sustainable industry, the PTC has artificially propped up an industry, advanced special interests, and allocated labor and capital away from more competitive uses in the marketplace.‚?Ě
If Congress passes this bill, they will put a small dent into the problem. Three cheers for Reps. Marchant and Pompeo for introducing a good piece of legislation.
Brian Darling served as Sr. Communications Director and Counsel for Senator Rand Paul (R-KY) from 2012-15. Before his tenure with Sen. Paul, Darling served in three different capacities with The Heritage Foundation. Follow him @BrianHDarling on Twitter.