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Tax Compromise Includes Billions For Ethanol

Senate-supported tax bill gives 45 cents per gallon subsidies to producers of ethanol-blended gasoline.

ears of corn

Photo: normanack (flickr)

"The ethanol industry is the only one to ever receive the triple crown of government intervention. Ethanol use is mandated by law, its users receive federal subsidies, and domestic production is protected by tariffs. That policy is not sustainable." -Senator Dianne Feinstein

A two-year extension of the Bush-era tax cuts isn’t the only thing US citizens can expect from the tax compromise currently being debated by Congress.

The latest version of the bill, approved by the Senate on Wednesday, would also deliver a one-year extension on a tax break for ethanol use.

The tax break subsidizes ethanol-blended gasoline at a rate of 45 cents per gallon, for a total public cost of $5 billion dollars.

This decision, hailed by the ethanol industry, was criticized by Senator Dianne Feinstein (D-CA). In a statement following the bill’s passage she said:

The ethanol industry is the only one to ever receive the triple crown of government intervention. Ethanol use is mandated by law, its users receive federal subsidies, and domestic production is protected by tariffs. That policy is not sustainable.

Feinstein is seeking to add an amendment that would cut the ethanol tax credit by 20%.

The move was also criticized by a coalition of organizations representing animal agriculture, food industry, environmental groups and budget watchdogs. They released a statement calling it “a totally unnecessary subsidy to a mature industry.”

Read More:

  • Corn lobby cashes in on tax compromise (Grist)
  • Diverse Coalition Responds to Senate Vote on Corn Ethanol Tax Credit (Businesswire)
Sarah Kaiser

Sarah Kaiser is a student-turned-townie living in Bloomington, Indiana. A social media specialist at Solution Tree, she spends her days tweeting and her nights foraging at the local summer market for new tastes and flavors. And occasionally rocking out on the ukulele.

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