It’s never too early to plan for next year’s taxes. Let’s say you’re thinking about doing some energy-saving home improvements soon and want to know what federal tax credits are available and how they work. How would you find out?
You might try the IRS website. I did but, unfortunately, couldn’t find any information about energy credits for 2009.

If there are any ranches in Detroit, President Obama has just bet one on his yet-unborn plan to cap greenhouse gasses. Obama has effectively ordered GM and Chrysler to build more fuel-efficient cars in return for billions more in federal bailout money. But will enough people buy those cars with gas at $2-a-gallon to make this a successful strategy?

Nice to see Tom Friedman on the energy tax bandwagon. As he wrote in his Dec. 27 New York Times column, “I’ve wracked my brain trying to think of ways to retool America around clean-power technologies without a price signal—i.e., a tax—and there are no effective ones.”
Friedman needs to give his cranium a holiday break. Policymakers have been searching for this magic bullet for years, without success. They’ve tried government-mandated (CAFE) auto mileage standards, tax credits for the use of everything from hybrid cars to low-E windows, massive government subsidies for production of alternative fuels and sincere pep-talks from sweater-clad Presidents. Nothing has worked. Take a look at this chart from the Energy Information Agency:

Just as demand for both alternative energy and low-income housing is growing, is the market drying up for the tax credits that drive much of the investment in both?
Evidence is that the answer is “yes.” The culprits: the crumbling economy, paralyzed bond markets, and the government itself. This may be yet another example of the always-deadly law of unintended consequences.

Note to President-Elect Obama: Don't do it.
I understand the politics. I even get the symbolism—iconic industry and all that. But the economics is really bad.
Here are five reasons why:

Let it be written: If the Senate-passed financial services bailout bill turns out to save us from the next Great Depression, we will owe a deep debt of gratitude to… chicken poop. If not, we can simply say the entire proposition turned out to be little more than, well, you know.

When it comes to taxes, Sarah Palin turns out to be an intriguing mix of Barack Obama and John McCain. Like Obama, she favors a tax rebate for consumers funded by a windfall profits tax on energy companies. But, like McCain, she also backs a gas tax holiday.

Interesting confluence of events: Barack Obama is about to wrap up the Democratic Presidential nomination and the Senate has begun debating a major plan to cap carbon emissions—an idea Obama strongly supports.

Yesterday, John McCain disclosed details of his plan to cut the use of fossil fuels—and thus greenhouse gases–through a cap and trade system of mandatory emissions reductions. As we have written, cap’n trade is not the name of a cheesy seafood restaurant. It is Washington-speak for a huge new tax on oil, gas, and coal. This is a good thing, but we ought to talk about it honestly.

$451 million in tax breaks for timber companies. Ka-ching. $500 million for biodiesel. Ka-ching. $126 million for racehorse breeders. Ka-ching. $20 million for Aggie bonds. Ka-ching.