The White House released today more details on the six new tax breaks for manufacturing that President Obama mentioned in his State of the Union address, including $5 billion in credits for clean energy manufacturers.
The Obama Administration, which will include the tax breaks in the 2013 budget set to be released next month, is already pushing Congress to act immediately on the provisions. The intent of the tax breaks is to encourage companies to keep jobs in the U.S. The White House also claims the package as a whole wouldn't add to the deficit.
The clean-energy tax break Obama proposed isn't new. The incentive, known as the Advanced Energy Manufacturing Tax Credit, was one of numerous Recovery Act-era investments aimed at creating jobs and pulling the country out of a recession. The popular and oversubscribed tax credit program has already awarded $2.3 billion in tax credits across 183 projects in the United States.
Obama's most recent proposal would extend the tax credit and provide an additional $5 billion. The White House says the $5 billion tax credit will drive nearly $20 billion in domestic clean energy manufacturing.
Companies that received clean-energy tax credits during the last round included $31.5 million credit for thin-film solar maker Miasole; $16.3 million in credits to First Solar to expansion its manufacturing facility in Ohio; and a whopping $141 million tax credit for Hemlock Semiconductor Corp. (a joint venture owned by Dow Corning, Shin-Etsu Handotai and Mitsubishi Materials), to expand a manufacturing plant that produces polysilicon used in the production of solar panels. The $1.2 billion plant, which will employ 500 people, is under construction and is scheduled to begin producing polysilicon in late 2012.
The other manufacturing tax credit proposals released today include:
- Remove tax deductions for moving operations abroad and give a 20 percent income tax credit for the expenses of moving operations back into the U.S.;
- Target an existing domestic production incentive on manufacturers who create jobs in the U.S. and double it for so-called "advanced manufacturing;
- $6 billion in credits ($2 billion per year for three years) to help finance projects in communities that have suffered a major job loss event;
- Allow companies to expense 100 percent of investments in plants and equipment, an incentive that would cost $4 billion in tax revenue;
- Close a loophole that allows companies to shift profits overseas from intangible property created in the U.S. The White House claims by closing the loophole it will raise $23 billion in tax revenue.
Photo: First Solar