A smelly example of must pass tax bill

Senate leaders of both parties have stuffed into the must-pass tax bill a renewal of expiring subsidies to "alternative" energy projects, including the darling of the farm lobby, the use of corn- derived ethanol in gasoline.

The subsidies come in two forms: one is a tariff, a tax of 54 cents per gallon on imported ethanol, and the other is a credit against fuel excise taxes of 45 cents for every gallon of ethanol put in gasoline. The tariff keeps ethanol made efficiently from Brazilian sugar cane from competing with that made from American corn; the credit costs about $6 billion a year.

Ethanol has to be used in small concentrations to provide oxygen- bearing compounds in fuel, according to regulations of the Environmental Protection Agency. (The need for those oxygen atoms died years ago.) Ostensibly to increase use of renewable and nonpetroleum fuels, Congress in 2007 required refiners to use 15 billion gallons of ethanol per year by 2015. This mandate is not expiring, though it ought to - even Al Gore now admits ethanol benefits are "trivial" and regrets supporting subsidies.

Estimates of the cost of the extra ethanol generated by the tax credit range from $4 per gallon - bad enough - to a ridiculous $30 a gallon. By now it is clear there are no environmental benefits - expansion of corn production can require new land from the clearing of forests, which releases carbon locked up in trees.

The Washington pork barrel contains many tasty morsels, but this one is nothing but empty calories.

source: istockanalyst