Wind Credit on the Block
Mr. Romney on Monday came out in favor of letting the wind production tax credit lapse at the end of the year, just as Senate Finance Committee members were nearing completion of a hard-fought package of business tax breaks they hope to pass out of the committee on Thursday. Those negotiations were largely about paring back the package, which routinely passes without much scrutiny.
The Senate Finance Committee chairman, Max Baucus, Democrat of Montana, has pledged to put the credit back when the committee takes up the plan, at a cost to the Treasury of about $3.3 billion over two years. Ultimately, even Republicans believe he will prevail.
But for now, according to committee sources, Republicans who had favored the credit believed that they needed to unite against it for Mr. Romney’s sake.
President Obama’s re-election campaign has been using Mr. Romney’s announcement to hammer him in the swing state of Iowa, where wind power is a growing industry. Conservatives, however, have praised his stand for fiscal rectitude and against what some say is corporate welfare.
The tax package – known as “extenders” – has victories for both parties. Senator Jon Kyl of Arizona, the second-ranking Republican, successfully fought efforts to cut out a longstanding, often-ridiculed tax break for Nascar track owners. He also helped defeat efforts by Senator Charles E. Schumer, Democrat of New York, to enlarge the package with an expanded tax break for tuition and higher education costs, which was included in the 2009 stimulus law but is set to lapse.
The two-year package would cost nearly $152 billion, but most of that, $92 billion, would stop the expansion of the alternative minimum tax, a parallel income tax system designed to force the rich to pay more but that is encroaching on the middle class. Other big-ticket items would continue the research and development tax credit for businesses, allow small businesses to write off investments, provide a deduction for state and local sales taxes for residents of states without income taxes and extend an existing tax deduction for education tuition.
Some provisions were pared, like a credit for plug-in electric motorcycles and three-wheeled vehicles, charitable deductions for computer and book inventories and a credit for extracting more energy from depleted oil wells.
A final package could be held up, however, by Senator Tom Coburn, Republican of Oklahoma, who Finance Committee aides say will press for more of the tax breaks to be removed before it reaches the Senate floor.