Wind power among big fiscal cliff winners

The “fiscal cliff” bill that prevented income taxes from rising for most Americans also renewed special tax breaks for a variety of industries, from Hollywood to wind power, in what has become a perennial ritual on Capitol Hill. The tax breaks, which the Senate included in the legislation that ultimately passed Congress late Tuesday, will end up costing about $100 billion over the next two years. A provision costing $222 million gives revenue from rum production in Puerto Rico and the U.S. Virgin Islands back to those territories, which use it to provide large subsidies to the industry. These provisions, known as “tax extenders” because most must be extended by Congress every year, help sweeten unpopular deals for lawmakers. It gives them a tangible benefit they can show constituents and provide a boon to lobbyists who charge clients to fight for them year in and year out. The renewable-energy industry made out better than most, with $18 billion from taxpayers over the next two years. Wind power producers in particular did well, extending a tax break worth 2.2 cents on each kilowatt-hour of energy they produce from plants built this year, adding up to about $12 billion from taxpayers over the next decade. The subsidy has support from lawmakers in both parties because it aims to benefit the environment as well as rural areas...more