$20 Billion Later, Ethanol Tax Credits Finally Expire
$20 Billion Later, Ethanol Tax Credits Finally Expire
It took three decades and a historic deficit to motivate them, but Congress finally killed a lucrative farm subsidy that promoted the sale of ethanol.
Technically, lawmakers took no action to end the corn-based subsidy, as it was set to expire at the end of 2011. But supporters of the tax break were hoping for a renewal, despite the mood in Washington to chop spending from the federal budget. Almost 40% of the corn grown in the United States is used to produce ethanol, and ethanol accounts for about 10% of the gasoline used in the country.
Politicians on the left and right ultimately decided the subsidy had to go, after it cost the government more than $20 billion since the early 1980s, including almost $6 billion in 2011 alone.
Despite the end of the tax credit, the ethanol industry is still being subsidized by taxpayers because federal law requires that it be blended into gasoline, and oil refiners that do so receive a tax credit of their own.
http://www.allgov.com/Where_is_the_Money_Going/ViewNews/20_Billion_Dollars_Later_Ethanol_Tax_Credits_Finally_Expire_120104