Has sanity visited the U.S. Senate?
Senate Republicans joined Democrats on Thursday in an overwhelming vote to end an important tax break for the ethanol industry, the first of many niche tax breaks GOP lawmakers are looking to close.
The Senate voted 73-27 to end the 45-cent break refiners receive for each gallon of ethanol they blend with gasoline and to scrap a 54-cent tariff on imported ethanol. The subsidy is worth roughly $6 billion a year to the ethanol industry. The Joint Committee on Taxation estimates ending it by July would save $2.4 billion over the rest of the year.
Sadly, Sen. Dan Coats was one of the 27 voting no. I couldn't find out specificially what Sen. Lugar did, but he has favored replacing the current subsidy with a different one, and several stories mentioned that "corn state" senators voted against the measure. The good news us that this could mean trouble for other niche tax breaks. The bad news is that is far from a done deal. The House hasn't acted, and the White House isn't crazy about alienating corn growers.
It should be noted that conservatives aren't united on the benefits of ending such subsidies. Tea partiers and the Club for Growth support ending them. But Grover Norquist of Americans for Tax Reform considers the eimination of a tax break the same as a tax increase.
UPDATE: Another take on the wider tax implications:
