As 2010 drew to a close, a 45-cent-per-gallon excise tax credit for domestic ethanol production and a 54-cent-per-gallon tariff on imported ethanol were set to expire. Congress literally had to do nothing and this special interest boondoggle that cost taxpayers $6 billion annually would have gone away.
But just before the holiday recess last December, Congress considered a major tax bill. The measure was endorsed by the White House and easily passed with large bipartisan support.
Among other things, the 2010 tax bill extended the Bush-era tax cuts by two years. It also contained provisions to extend the ethanol subsidies, which began in 1978, by another year.
As 2011 drew to a close, the same situation emerged. Congress simply had to do nothing and the subsidies would come to an end. The current Congress has a well-earned reputation for doing nothing. Thankfully, in this case, it did nothing. The ethanol tax credit and tariff are no more.
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