Senators draft energy innovation tax credit proposal

Two members of the Senate Finance Committee released a discussion draft of a bipartisan energy tax credit bill Monday that could represent a path forward for Republicans and Democrats.

The Energy Sector Innovation Credit Act, proposed by Sen. Mike Crapo, R-Idaho, the top Republican on the committee, and Sheldon Whitehouse, D-Rhode Island, aims to encourage innovation in the clean energy sector by providing investment tax credits and production tax credits for generation, storage, carbon capture and hydrogen production.

The proposal comes as the Biden administration is meeting with lawmakers in both parties to push its infrastructure plan, known as the American Jobs Plan, and try to find enough votes to pass it through a narrowly divided House and Senate. The American Jobs Plan includes tax credits for electric vehicles and other incentives for protecting the environment. The Treasury Department’s accompanying Made in America Tax Plan includes more incentives for other forms of clean energy, including solar and wind power. An alternative energy tax credit plan released last week by Senate Finance Committee chairman Ron Wyden, D-Oregon, would take a different approach by creating a new emissions-based tax credit instead of various types of tax credits for different forms of energy (see story).

Crapo and Whitehouse’s proposal would allow up to a 40 percent investment tax credit or a 60 percent production tax credit for low market penetration technologies across a variety of energy sources, including renewables, fossil fuels and nuclear energy. It proposes to phase out credits as technologies mature to enable the most innovative technologies to compete on their own, instead of having Congress pick winners and losers when the temporary credits expire. The bill would offer flexibility for unforeseen clean energy technologies to be eligible for the tax credit in the future.

“This proposal incentivizes technologywide clean energy innovation so new, clean technologies can rapidly scale up and compete independently in the market,” Crapo said in a statement. “Moreover, the credits scale down as technologies’ market share ramps up, so taxpayer dollars do not subsidize market-mature technologies.”

He and Whitehouse are hoping to spur more conversations within their committee about how to offer tax incentives for clean energy. The Senate Finance Committee will be holding a hearing Tuesday on addressing the climate crisis with the Tax Code.

“We have plenty of good ideas for clean energy technology to battle climate change; the challenge is bringing them online quickly enough to make a difference,” Whitehouse said in a statement. “That’s why we need proposals like this one. Our legislation will hit the accelerator on promising new sources of clean energy, and help those technologies compete with heavy-polluting sources on the open market. I’m glad to partner with Senator Crapo in beginning work on this bipartisan bill, and look forward to strengthening it as others weigh in.” 

Help FAIRtax Become The Number One Issue in 2024

Enacting the FAIRtax must be a prominent topic in these times. We did it before, we can do it again, but we need your help!

Help out with a One-Time Contribution

Your gift of $25, $50, $100 – even $1,000 or more if you can possibly spare it – will help FAIRtax.org bring an end to the IRS and promote a FAIRtax. So, I urge you, please give as generously as you can.

Billing information (REQUIRED)

Payment information (REQUIRED)

To donate by check:
Americans for Fair Taxation
PO Box 4929
Clearwater, FL 33758

If you need to make changes to your existing Monthly Re-Occurring Donation with new card or billing address information, then Please call Adam Yomtov our New York State Co-Director. He is assisting with the administration of our donations, technology services, and website.

Please note: Inputting your new information at our website won't update your donation. The only way to update is by calling Adam Yomtov 917-689-3931 mobile.


Americans for Fair Taxation® is a 501(c)(4) non-profit, non-partisan grassroots organization solely dedicated to replacing the current income tax system with a fair, simple and transparent national consumption tax – the FAIRtax® Plan. We rely entirely on contributions from concerned citizens like you who want a tax system that will generate jobs and stimulate the economy. Welcome to the FAIRtax team!

Connect

Share