President Obama’s 2013 budget has proposed business-tax reform including support for renewable energy. His reforms would make the temporary tax credits for renewable energy production permanent as well as making them refundable. The budget is part of the President’s energy plan to double electricity output from clean sources by 2035.
As evidenced by his State of the Union addresses in 2009, 2010,, 2011, and 2012, the President has been a stalwart champion of renewable energy.
The Treasury Department has indicated that making renewable tax credits permanent will “provide a strong, consistent incentive to encourage investments in renewable energy technologies.”
“This Framework recognizes that, as we expand manufacturing in the United States, the tax code should encourage doing so in way that is sustainable and that puts the United States in the lead in manufacturing the clean energy technologies of the future. This will create jobs here at home and can also have important spillover benefits. Moving toward a clean energy economy will reduce air and water pollution and enhance our national security by reducing dependence on oil. Cleaner energy will play a crucial role in slowing global climate change, meeting the President’s goal of producing 80 percent of our nation’s electricity from clean sources by 2035.”
There are very real concerns that the expiration of the production tax credit (Section 1603 grant program) at the end of 2011 will have a profoundly negative impacts on the renewable energy sector and result in hundreds of job losses.
In addition to the proposal to make renewable energy tax credits permanent, the Obama administration is also seeking to lower the corporate tax rate from 35 percent to 28 percent, and to 25 percent for manufacturing. The President’s proposed reforms would also make permanent a 17 percent tax credit rate for Research and Experimentation (R&D).
It is now up to Congress to decide whether the tax reforms proposed by the President become law.
For information on the environmental elements of the Obama budget click here.
© 2012, Richard Matthews. All rights reserved.
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