31 August 2011 0 Comments

Ethanol: 3-fer: $.45 Tax Credit – $.54 Tariff and Mandates (10 to 15%)

“You can either subsidize [ethanol] or you can protect it or you can mandate that it be used. In this case we’re doing all three,” Ellis said.

What Ellis refers to is that aside from the 45-cent per gallon tax credit, there is a 54-cent tariff on imported ethanol, a federal effort to thwart the import of ethanol made from Brazilian sugarcane, which is cheaper to grow than corn and arguably more efficient to burn.

An end to the ethanol tax breaks could sting consumers. About 90% of the gasoline sold in the U.S. contains at least 10% ethanol, indeed the E-10 fuel blend is the most popular at the U.S. pump. Such a move would increase the federal excise tax on the E-10 gasoline by 4.5 cents a gallon.

 

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