September 10, 2012
Opinions, U.S.

Disinherit the Wind

By James Valvo | National Review Online | 10 September 2012

The federal wind production tax credit (PTC) is scheduled to expire at the end of this year, offering the country a real chance to end the failed 20-year experiment of propping up a favored industry. Not surprisingly, proponents of the special tax break are working mightily to have it renewed. Conservatives and free-market advocates across the country are mobilizing to end this special tax treatment, and thus begin to restore an even playing field in energy markets.

Americans for Prosperity is just one member of a coalition of 64 organizations that is calling on Congress to let the wind PTC expire. The organizations differ in size and scope. Some have millions of members across the country; others are small, local outfits focused on stopping wind developers from installing turbines in their hometowns. Some are tea-party groups intent on restoring the federal government’s limited size and scope; others are nationally focused, driven by concern about the government’s stranglehold on the energy market. But they all have one thing in common: They agree that it’s time to end special tax treatment for wind-energy production.

We’ve heard all the tired arguments before about why this credit should be extended. Proponents of the wind PTC insist that the wind industry needs the tax credit for just a little while longer in order to become established. But when will it be enough? When will the wind industry stand on its own two feet? The wind PTC has been in place for 20 years, with no signs that the industry can survive without it. Wind power also survives thanks to state-level renewable-electricity mandates that guarantee the industry market share, driving up electricity prices for consumers. It’s time to take the training wheels off and end both of these special treatments.

This isn’t the first recent campaign to clear the clutter from the tax code and block special provisions for favored energy players. Last year, the Volumetric Ethanol Excise Tax Credit (VEETC) was finally allowed to expire, after the ethanol industry had received support since the 1970s. But ethanol still benefits from the EPA’s blending mandate, which needs to be repealed so that we will stop burning our food supply and driving up the cost of everything we eat. Similarly, the natural-gas industry has been working overtime to get the so-called NAT GAS Act passed to install various tax benefits for the production, conversion, and purchase of natural-gas-powered vehicles. Thankfully, so far the rent-seekers behind this provision have been stymied.

Many of the organizations that signed this week’s coalition letter were instrumental in both the ethanol and (so far) NAT GAS Act victories. Opponents of extending the wind PTC, in Washington and across the country, should take heart at these recent successes. The tide may be slowly starting to turn.

Americans deserve an energy policy that is economically viable and an industry that is strong and independent, not one that limps along and relies on the tax code and purchase mandates to stay afloat. If an energy source truly has benefits for American consumers, such as lower cost or higher efficiency, then it should show its value by competing in the open market for consumers’ dollars.

Congress would be wise to finally allow the wind production tax credit to expire. Millions of citizens and dozens of organizations across the country are calling on them to do so.

— James Valvo is director of policy for Americans for Prosperity.

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