April 29, 2009
The Black Liquor Tax Credit
Senator John Kerry is incensed. He used the word “cheat.”
Senator Jeff Bingham insists Congress was not trying to make a tax loophole.
The fracas is over a four-year-old tax credit given to companies that mix
biofuels with diesel. Congress wanted to encourage “greener” burning.
Well, it seems that paper companies have been burning a bioproduct in their
plants for years, something called “black liquor.” It doesn't sound green, but
it is made from wood product. In response to Congress's program, paper
companies have taken to mixing it with diesel to qualify for the tax credit.
It wasn't what Congress intended. But Congressfolk should hardly be surprised.
A law has to apply across the board. You can't make a general rule and then
say, “Uh, no: We meant it to apply only to those businesses over there, not
these ones over here.”
The New York Times notes that the scandal surfacing, now, might prove
especially inconvenient for Congress, as the public roils over business and
banking bailouts.
The congressional brain trust meant to give incompetent bankers billions. They
didn't mean to give International Paper $71 million, or Verso Paper $29.7
million.
Despite this, Congress has to live up to its own words. Not its intentions. In
this case, Congress wants to blame corporations, not themselves. We'll see if
the august body of social engineers can pull that trick off.
Obviously, like Kermit the Frog, Congress is finding that it's not easy being
green.
This is Common Sense. I'm Paul Jacob.
Paul Jacob is President of Citizens in Charge and the Citizens in Charge
Foundation, which sponsors both Common Sense and Paul's weekly Townhall Column.
The opinions expressed in Common Sense are Paul Jacob's and do not necessarily
reflect the opinions of Citizens in Charge or the Citizens in Charge Foundation.
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