Energy Tax Breaks Wiki

Attributed Authors: Tracey Roberts and Walter Wang Published: Jan 2012

Using an open architecture approach, the Energy Tax Breaks Wiki hopes to tabulate information on the applicablity and value of various federal tax breaks to energy in the United States.  The site is a joint project of the Institute for Policy Integrity at New York University School of Law and the Center for Land Use and Environmental Responsibility at the Louis D. Brandeis School of Law at the University of Louisville.

The site could be extremely useful if it captures not only the statutory reference, but Treasury regulations, tax court rulings, private letter rulings, and other interpretations in one place.  A series of private letter rulings, for example, have extended eligibility for tax exempt solid waste bonds to a variety of energy facilities (e.g., ethanol production plants) for which such eligibility is not obvious.  Consolidating the references would greatly enhance our understanding of how broadly tax subsidies reach into economic decisions.  The structure is promising:  as this example shows, the site developers do hope that the site will become a one-stop shop for a wide mixture of tax-related information on a particular subsidy. 

Reaching that goal will be challenging.  Can enough effort and interest be generated to populate and maintain the core data set?  Can open access be policed sufficiently to avoid troll entries (e.g., Honeymoon packages to Viet Nam are already cropping up on the sites revision views) from undermining the core objective?  And structurally, can they go beyond their current top-level tax code section headings to identify the surprising though lucrative ways the energy sector has been mining the tax code?   

Consider accelerated depreciation.  Special rules for energy-related asset classes that allow these investments to be written off far more quickly than they wear out go well beyond the specifically delineated code sections that are picked up by the Wiki here.  It would be extremely useful to highlight the subsidies to all of these asset classes (see IRS publication 946, Appendix B) as well.  Structural tax breaks, such as the broad use of master limited partnerships by fossil fuel firms to escape corporate income taxes entirely is another example of why it is important to go beyond the norm if the tax-related distortions are to be fully exposed.

Tags: US tax subsidies