Low taxes in the form of the federal Production Tax Credit for wind farm have driven as much as $20 billion of private investment a year into the U.S. economy. Wind power is now one of America’s biggest sources of new electricity and fastest growing manufacturing sectors. It has accounted for more than a third of all new U.S. electric generation in recent years.
Conservatives can and do support wind turbines. Wind’s PTC has long been backed on a bipartisan basis. Groups including the U.S. Chamber of Commerce, National Association of Manufacturers, Edison Electric Institute and American Farm Bureau Federation also support this PTC extension.
I know wind power’s success story firsthand. Iowa was the first state to generate 20 percent of its electricity from wind farm. Now, wind turbines supports as many as 5,000 Iowa jobs, and $11 million in annual land lease payments to Iowa farmers. Iowa wind has prompted $300 million in private investment in Iowa manufacturing facilities.
This success story is spreading across the country. Low taxes have helped wind’s manufacturing sector grow 12-fold — to more than 400 factories in 43 states. Wind industry leaders know how to expand this business and provide more U.S. jobs.
They just need Washington to provide stable, low tax rates. The PTC means keeping investment dollars in the market place – not in the hands of government
The key to these jobs and private investment is a stable tax policy. If taxes on wind energy are kept stable and low, according to a recent study from a national economic consulting firm, , this business can grow to 100,000 U.S. jobs in four years, and support 500,000 U.S. jobs by 2030.
But the same study showed that these jobs and investment would be lost if Congress allows wind energy’s key federal incentive, the PTC, to expire and raises taxes on this sector.
The PTC is set to expire at the end of this year — but the economic damage has already begun. With a tax increase on the horizon, and the PTC’s future uncertain, businesses are hesitant to plan future wind projects. U.S. manufacturers have seen a drop in orders. Layoffs have already started.
Urgent action is needed. The wind industry is facing the recurrence of the boom-bust cycle it experienced in previous years, when the PTC was allowed to expire briefly before being renewed by Congress.
In the years after expiration, installations of new wind turbines dropped between 73 and 93 percent, and many jobs were lost. Such a dramatic drop in business is hard on companies and workers and their families at the best of times, but it will be a punishing blow in the current economy.
Congress has the opportunity to prevent this if it acts quickly. The payroll tax legislation now being debated could offer a vehicle to extend the PTC. I call on my colleagues to join me in requesting that a PTC extension be included in any tax overhaul policy.
At this critical time for our economy we should not be contemplating a crippling tax increase on an emerging energy industry that is now adding new manufacturing jobs. Let wind power finish the job.
This is not a partisan issue. It is a manufacturing jobs issue.
With low taxes, wind power can deliver tremendous benefits – in jobs, investment and clean energy — to Iowa and the nation.
Rep. Steve King (R-Iowa) is on the House Small Business Committee, where he serves on Subcommittee on Economic Growth, Tax & Capital Access and the Subcommittee on Agriculture, Energy & Trade