Yesterday two Senators introduced legislation aiming to repeal the controversial credit. According to some, this expensive tax credit is completely unnecessary, since the law requires use of ethanol in gasoline blending
From WJS.com:
The lawmakers, Sens. Tom Coburn (R., Okla.) and Ben Cardin (D., Md.), say the tax credit should be eliminated because federal law already requires blenders to put ethanol into gasoline, thereby eliminating the need for financial incentives.
Ethanol producers, on the other hand, say a repeal of the credit would be poorly timed because the industry can produce transportation fuel at a time when the U.S. is concerned about global oil supplies.
The Volumetric Ethanol Excise Tax Credit provides a 45-cent-a-gallon tax credit to blenders of ethanol. Last year, Congress decided to extend the tax credit until the end of 2011.
In 2010, the tax-credit program totaled $5.4 billion, according to the Government Accountability Office.
Earlier this month, the GAO, acting as the investigative arm of Congress, said the tax credit is "largely unneeded" because Congress already requires ethanol in gasoline. The so-called renewable fuel standard requires the use of 36 billion gallons of renewable fuels by 2022, with or without the tax credit.