Fun With Expiring Tax Credits

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Despite what the public might think, the American Recovery and Reinvestment Act (Obama stimulus 1.0) had a lot of tax cuts and credits in it, many of which are set to expire at the end of this year. In this week’s dead tree edition of TIME, our stimulus-loving colleague Michael Grunwald considers a few green energy provisions (from ARRA and before) and arrives at this mixed verdict on where to go from here:

The classic congressional approach would be to do everything: extend the ethanol goodies and the renewable grants. Doing nothing is also a perennial option. But Congress ought to be able to say yes and no at the same time. Clean energy serves the national interest, reducing our dependence on fossil fuels while building a 21st century economy. And ethanol isn’t clean energy.

Read the whole thing. Of course there are other pieces of ARRA that will disappear after December 31. Also of note is the Making Work Pay tax credit, which looks likely to be replaced by a payroll tax cut in the proposed deal on extending the Bush breaks (Obama stimulus 2.0). The MWP refunds up to $400 for individuals and $800 for couples, phasing out for earners who make more than $75,000, or $150,000 for couples. The payroll tax cut would affect all workers, but those making less than $20,000 won’t be getting as much back next year if the deal goes through.Correction: This post originally implied that the ethanol subsidies were part of the American Recovery and Reinvestment Act of 2009. The Volumetric Ethanol Excise Tax Credit was created by the American Jobs Creation Act of 2004.

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