Renewable Energy and Job Creation Act
On May 21, 2008, the House passed legislation (H.R. 6049) to extend and expand tax incentives for renewable energy, retain and create hundreds of thousands of green jobs, spur American innovation and business investment, cut taxes for millions of Americans, and close loopholes allowing U.S. corporations and executives to avoid U.S. taxes by shipping jobs and investment overseas. The President has threatened to veto this bill.
Watch Speaker Pelosi speak in support of the legislation>>
High energy prices continue to squeeze American families. Gas, diesel, and oil prices reach new records daily as oil companies are on track to reap record profits.
To reduce our dependence on foreign oil and to protect the environment, this legislation would increase the production of renewable fuels and renewable electricity, and encourage greater energy efficiency. It extends and expands tax incentives for renewable electricity, energy and fuel from America’s heartland, as well as for plug-in hybrid cars, and energy efficient homes, buildings, and appliances.
These provisions are critical to creating and preserving hundreds of thousands of good-paying green collar American jobs. A recent study showed that allowing the renewable energy incentives to expire would lead to about 116,000 jobs being lost in the wind and solar industries through the end of 2009. [Economic Impact of Tax Credit Expiration – Final Report, February 13, 2008]
To strengthen the American economy, the bill extends the research and development tax credit to spur American innovation and business investment. The bill also cuts taxes for millions of Americans, including teachers, college students and families in states with no income tax.
The bill does not add to the national debt. The bill closes loopholes allowing corporations and executives to avoid U.S. taxes by shipping jobs and investment overseas -- it is time to focus tax benefits on creating jobs and encouraging business investment here at home.
The measure is supported by a wide range of renewable energy groups, including the Solar Energy Industries Association, Geothermal Energy Association, American Wind Energy Association, National Hydropower Association, and the National Biodiesel Board. It is also supported by environmental organizations, including the Sierra Club and Alliance to Save Energy, businesses, such as the R&D Credit Coalition, Microsoft, Boeing, Caterpillar, General Electric, and Ford Motor, and a range of other organizations, such as American Federation of Teachers and the Children’s Defense Fund.
The legislation represents a renewed effort to pass these critical tax incentives into law immediately. Senate Republicans have long delayed this legislation, in their efforts to protect taxpayer subsidies for Big Oil companies raking in record profits. In the interest of expeditiously enacting this legislation into law, this new bill relies on non-controversial revenue offsets that have passed the House with broad bipartisan support.
There is no question that this Congress will pass AMT relief soon so that 25 million middle-income families do not see their taxes increase. The only question is whether Republicans will join Democrats in providing this relief without increasing the national debt.
Tax Incentives for Renewable Energy to Spur Green Jobs and American Energy Independence ($18 billion)
- Six-year extension of the investment tax credit (ITC) for solar energy.
- Three-year extension of the production tax credit (PTC) for energy derived from biomass, geothermal, hydropower, landfill gas and solid waste.
- One-year extension of the PTC for energy derived from wind.
- Incentives for carbon capture and sequestration demonstration projects.
- Incentives for the production of homegrown renewable fuels, such as biodiesel and renewable diesel, and for the installation of E-85 pumps for consumers to fill up flex-fuel vehicles.
- Tax credits of $3,000 or more toward the purchase of fuel-efficient, plug-in hybrid vehicles.
- Incentives for energy conservation in commercial buildings, residential structures, and energy efficient appliances.
- $3 billion in tax credit bonds to State and local government to make energy conservation investments in public infrastructure and invest in research.
Creating American Jobs & Cutting Taxes for Millions of Middle-Class Families ($37 billion -- $15 billion for individuals, $22 billion for business)
- Ensures the continued competitiveness of American businesses by extending the R&D tax credit for 27,000 companies and the special rules for active financing income;
- Provide up to 30 million homeowners with property tax relief;
- Help families of 13 million children by expanding the child tax credit to those earning $8,500 a year (from $12,050 in current law);
- Benefit 11 million families through the State and local sales tax deduction;
- Help 4.5 million families better afford college with the tuition deduction;
- Save 3.4 million teachers money with a deduction for classroom expenses; and
- Provide 22,000 American troops in combat with tax relief under the Earned Income Tax Credit.
Cracking Down on Offshore Tax Loopholes
Closing tax loophole for deferred compensation paid by offshore companies. The bill would stop hedge fund managers and corporate CEOs from escaping income taxes by using offshore tax havens, while middle-class families play by the rules and pay their fair share of taxes. The bill would immediately tax the deferred compensation of executives and employees of U.S. corporations that are offshore in a tax haven. Most Americans can avoid some taxes by deferring limited amounts of income into pension plans such as a 401(k) or an Individual Retirement Account, but some highly paid executives who operate offshore investment funds can defer unlimited amounts of pay.
Delaying tax break for foreign interest payments. The bill delays for 10 years a questionable tax break enacted in 2004 that would let U.S. multinational companies that have shipped jobs overseas reduce their U.S. taxes by deducting more of their worldwide interest income against their U.S. income. This provision has not gone into effect, and not one company currently utilizes this provision. The delay would provide time to carefully examine the consequences of this tax break.