Tax deal includes ethanol, biodiesel credits
After meeting with Republican leaders Tuesday morning Senator Chuck Grassley, the ranking GOP member of the Senate Finance Committee, told reporters that 71 tax credits that expired in 2009 as well as credits expiring this month will be renewed to last through the end of 2011 as part of the tax deal worked out between Congress and the White House.
"I'm led to believe the extenders of 2009 would be extended for the years 2010 and 2011," the Iowa Senator said. That would be good news for the struggling biodiesel industry, which lost its $1-a-gallon tax credit at the end of 2009.
Grassley said the current 45-cent-a-gallon tax credit for ethanol, which expires December 31, will be extended through 2011, along with other expiring tax credits.
Grassley said that he doesn't yet know if the ethanol credit will remain at 45 cents, or if it will be lowered to 36 cents, as it was in a tax bill authored by Senate Finance Committee Chairman Max Baucus (D-MT). The Baucus legislation, which would not have extended favorable tax rates for high income earners, was defeated on Saturday.
"I've been an advocate that we shouldn't change any policy on these extenders," Grassley said.
Grassley said he believes that a tariff on imported ethanol, which expires this month, will also be extended for one more year.
Grassley said he was pleased that the tax compromise also includes higher estate tax exemptions and lower estate tax rates for two years. The exemption will be $5 million per spouse at a 35% rate.
"I didn't think we would ever have that possibility after we lost it in April," he said. Senate Majority leader Harry Reid (D-NV) didn't allow a vote on a similar proposal offered by Senators Jon Kyl (R-AZ) and Blanche Lincoln (D-AR).
Grassley said he believes all Republican members of the Senate and House will vote for the tax compromise but he doesn't know how much support the legislation will have from Democrats.