Hidden inside the $858 billion Obama tax compromise legislation is a plethora of tax incentives, or "tax earmarks" in addition to the extension of the Bush tax cuts and another unemployment benefits extension. These earmarks range from energy and education tax credits to tax-exempt bonds for areas damaged by Katrina.
The big question is: are we really surprised? What bill has come through our legislature without myriad tax gimmicks sprinkled throughout?
California's Democratic Sens. Dianne Feinstein and Barbara Boxer joined an overwhelming 83-15 vote Monday to move forward on the tax bill, the biggest bipartisan victory of the Obama administration so far. A Senate vote on final passage is expected today.
Ethanol subsidies are among the biggest earmarks. Feinstein waged a last-ditch effort Tuesday to reduce them, even as she sought to add tax breaks for wind and solar developers. She and Boxer and a dozen other Senate Democrats and 81 House members demanded the alternative-energy tax breaks in exchange for their votes for the tax bill.
An amendment by Feinstein to cut ethanol subsidies and extend a tax credit for alternative-energy manufacturers, which was part of the 2009 stimulus, failed. The $2.3 billion program has made nine awards to California companies, including Stion and Nanosolar in San Jose.
One program survives
But one big alternative-energy program that survived under pressure from Democrats would extend a subsidy to cover nearly a third of the cost of new wind and solar installations. It was the top goal for alternative-energy industry lobbyists.