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Congress Racing To Extend and Expand Electric Vehicle, Wind, and Solar Tax Credits

It would be comforting to think that the House’s impeachment proceedings have so poisoned relations between Democrats and Republicans that the Congress won’t be able to pass any significant legislation in the near future besides a continuing resolution (CR) to fund the federal government for the rest of the fiscal year. Unfortunately, the prospect of using tens of billions of taxpayer dollars to reward special interests is so irresistibly attractive to members of Congress that it can overcome almost any level of partisan animosity.  
 
The big package of tax credit extenders rolled out by the House Ways and Means Committee in mid-November is being slimmed down in an attempt to finish it and attach it to the CR that must be passed before the current one expires on December 20th. If that fails, the House and Senate tax writing committees are highly unlikely to give up; they will look for another opportunity early in the new year.
 
Expanding the electric vehicle tax credit by tens of billions of dollars is still part of the package. This week 33 nonprofit groups led by the American Energy Alliance (and including CEI) sent a letter urging the Senate not to expand the EV credit. The letter notes that:

A recent study found that 79 percent of electric vehicle tax credits were claimed by households with an adjusted gross income of more than $100,000 a year. Further, in 2018, 46 percent of credit eligibility flowed to one state, California, despite it making up just 12 percent of the national market for automobiles…. The fact of the matter is that wealthy coastal new car buyers and companies like Tesla are the primary beneficiaries, while the average American taxpayer is left on the hook.

The package also still includes extensions of the wind production tax credit and the solar investment tax credit. Many supporters of the 2015 extension promised it would be the last one. That was then. If Congress passes an extension of the wind and solar tax credits and President Trump signs it into law, it means that the war on coal has begun again. 
 
The chances of the House getting the Senate to approve large parts of its package are increased by the fact that the chairman of the Senate Finance Committee, Sen. Charles Grassley (R-IA), seems determined to restore the $1 a gallon tax credit for biodiesel. The biodiesel industry would like to have their credit, which expired at the end of 2017, restored retroactively for the past two years and extended to the end of 2020.