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too much government

The Black Liquor Tax Credit

Senator John Kerry is incensed. He used the word “cheat.”

Senator Jeff Bingham insists Congress was not trying to make a tax loophole.

The fracas is over a four-​year-​old tax credit given to companies that mix biofuels with diesel. Congress wanted to encourage “greener” burning.

Well, it seems that paper companies have been burning a bioproduct in their plants for years, something called “black liquor.” It doesn’t sound green, but it is made from wood product. In response to Congress’s program, paper companies have taken to mixing it with diesel to qualify for the tax credit.

It wasn’t what Congress intended. But Congressfolk should hardly be surprised. A law has to apply across the board. You can’t make a general rule and then say, “Uh, no: We meant it to apply only to those businesses over there, not these ones over here.”

The New York Times notes that the scandal surfacing, now, might prove especially inconvenient for Congress, as the public roils over business and banking bailouts. 

The congressional brain trust meant to give incompetent bankers billions. They didn’t mean to give International Paper $71 million, or Verso Paper $29.7 million. 

Despite this, Congress has to live up to its own words. Not its intentions. In this case, Congress wants to blame corporations, not themselves. We’ll see if the august body of social engineers can pull that trick off.

Obviously, like Kermit the Frog, Congress is finding that it’s not easy being green. 

This is Common Sense. I’m Paul Jacob.