By Steve Haner
I don’t often dispute with my former colleague Dwayne Yancey, now running Cardinal News, but his short-sighted and one-sided column this morning on the changing tax environment for solar panel manufacturers demands an answer.
Yes, certain solar-specific tax expense subsidies are set to expire in the House-passed version of the new federal tax rewrite. Yes, the solar industry has its hair on fire and is blasting out warnings of economic collapse, including at a legislative energy meeting last week. Yancey follows the playbook page by page in his argument.
As is often the case, what really matters is what was left out, either not mentioned at all or left to a side comment. The pending tax package – and it will change and may even fail – includes a host of provisions intended to boost manufacturing of all kinds, none of them denied to the firms who make solar components.
The solar industry is whining, amplified by Yancey, because it is losing special privileges applied only to that industry, that energy production method. They don’t want a level playing field, they want an edge. They cannot compete without the tax breaks given to the industry and then really boosted by additional tax favors granted to their customers, also set to expire.
Yancey mentions none of the tax proposals that will benefit all manufacturing, highlighted for example by this from the Tax Foundation. Will all of these be in the final bill? Maybe not. Do they reduce revenue? Probably, but these are the kinds of things that economists do see as stimulating investment and potentially creating jobs and revenue long term. They include:
- Permanent deductions for domestic research and development spending.
- Permanent 100% bonus depreciation.
- Permanent 100% first year expensing for qualifying structures.
- Increasing the Section 179 expensing cap from $1 million to $2.5 million.
- Increasing the Section 199 qualified business deduction from 20 to 23%.
