With the current debate over ending oil producers’ subsidies the question arises as to what subsidies do the producers actually get. It is a surprisingly complicated question. Wind producers also get subsidies that take complex forms—investment tax credits, production tax credits, mandates, property tax exemptions, etc. But the major federal subsidy for wind producers is the option to take a 30 percent investment tax credit or to receive a 2.2 cents per kilowatt-hour production tax credit. “2.2 cents” doesn’t seem like much, but, depending on the time of year, it …
As President Obama continues campaigning for yet another round of stimulus it appears now that even democrats are beginning to question the soundness of this strategy. This new focus includes a $5,000 tax credit—among other items— for any business that hires a new worker—effective the year the legislation is passed. Of course, the intended effect of this new policy may win some political points for the President and legislators, yet this effect does not override the fact that this maneuver is simply bad economic policy. Creating a tax credit for …
Yesterday, state lawmakers in Indiana passed a scholarship tax credit program—making the Hoosier state the latest to offer private school choice. Under the plan, people or corporations who make donations to non-profits that award tuition scholarships will be eligible for a 50-percent tax credit off their state bill. A total of $2.5 million in tax credits will be awarded. The program has the potential to help hundreds of families choose the best school for their children. A recent analysis by the Friedman Foundation found that this program also has the …
Senator Johnny Isakson (R-GA) reintroduced his plan today to create a $15,000 tax credit for homebuyers purchasing primary residences. The goal of the plan is to jumpstart the depressed real estate market. But as we pointed out last year when Senator Isakson introduced a similar bill, it will not work and it is bad policy. Furthermore, this additional tax credit is unnecessary because the tax code already encourages homeownership. Mortgage interest is deductible and the stimulus already created an $8,000 credit for first-time homeowners available for homes purchased in 2009.
