According to a new analysis, $5 is returned to the US government and the US economy for every dollar invested in the USA's ethanol industry excise tax credits.
The analysis, conducted by LECG director John Urbanchuk,
shows an estimated $US33.4 billion (in 2008 dollars) in tax revenue for the US Federal government and nearly $US17 billion of additional tax revenue for State and Local governments has been generated since 1978.
The estimated cost of the ethanol tax credit over this same period was $US30.4 billion. Consequently, the ethanol industry generated a surplus of about $US3 billion for the Federal treasury alone over the past three decades.
The ethanol industry has displaced nearly 1.9 billion barrels of imported crude oil (the amount of crude required to produce the ethanol equivalent of 34.9 billion gallons of gasoline) valued at $US97.5 billion.
The excise tax has also helped fuel an addition of $US228 billion to the nation's Gross Domestic Product (GDP) by 2008.
The industry also has created more than 210,000 jobs in all sectors of the economy.
The excise tax credit also has saved taxpayers money by reducing farm program outlays through higher prices for corn.
Recent research published at Iowa State University estimated that the Federal government saved $US3.45 billion in 2007 alone because it was not making loan deficiency payments, as it was in 2005 and 2006.
The analysis was conducted on behalf of the Renewable Fuels Association. Read the full report at www.lecg.com/etea08.
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