Finally: Niche tax breaks targeted; Senate kills ethanol credit

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    Jun 17, 2011 3:37 AM GMT
    Good for the environment, good for consumers.

    Senate Republicans joined Democrats on Thursday in an overwhelming vote to end an important tax break for the ethanol industry, the first of many niche tax breaks GOP lawmakers are looking to close.

    The Senate voted 73-27 to end the 45-cent break refiners receive for each gallon of ethanol they blend with gasoline and to scrap a 54-cent tariff on imported ethanol. The subsidy is worth roughly $6 billion a year to the ethanol industry. The Joint Committee on Taxation estimates ending it by July would save $2.4 billion over the rest of the year.

    Thirty-three Republicans, 38 Democrats and two Independents supported the measure. Fourteen Republicans and 13 Democrats, mostly from Corn Belt states, voted against it.
    Sen. Tom Coburn (R-Okla.) the leading GOP force behind the amendment, which was sponsored by Sen. Dianne Feinstein (D-Calif.), is looking at dozens of other niche tax breaks to end.

    This has put him at odds with prominent conservative activist Grover Norquist, president of Americans for Tax Reform, but it appears that Republican senators are coming around to Coburn’s view.

    “This is just the first of many,” said Sen. Dan Coats (R-Ind.), who voted against the Coburn-Feinstein amendment because he favors a more gradual phase-out of the tax break.

    But Coats says it’s entirely appropriate to end niche tax subsidies, or what he calls tax expenditures, to reduce the deficit. He said the thinking has changed since the 2010 election. Before then, he said, the assumption was that money saved from ending tax breaks would be spent on other federal programs.

    Coburn said the vote sends “a good signal” to ongoing talks to raise the nation’s debt ceiling while reducing deficits. He also said he was sure it would be on the table in the deficit-reduction talks led by Vice President Biden.
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    Jun 17, 2011 3:42 AM GMT
    Oh, I love the magical moments when you and I agree.
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    Jun 17, 2011 4:07 AM GMT
    Yes it is good to agree with Riddler on this !!