Whirlpool parlays green credits into zero tax liability

See Tax Reform Exhibit A in the WSJ, 3-3-11. Excerpts:

"Our liberal friends often complain that U.S. businesses pay too little in taxes, despite the world's second highest corporate tax rate. What they don't say is that one reason is because liberals keep writing loopholes. Consider how Whirlpool, the giant home appliance maker, has parlayed green energy subsidies to erase its tax bill.

Whirlpool Corporation recorded $18 billion in global sales and $619 million of earnings in 2010 but won't pay anywhere near the U.S. statutory tax rate of 35% on those profits. Its effective tax rate will be 0%.

As Bloomberg first reported last week, Whirlpool has stockpiled more than $500 million in tax credits for making energy-saving "energy star" appliances—washers, dryers, refrigerators and so on. The firm gets a production tax credit of up to $200 per refrigerator, $75 per dishwasher, and $225 per washer and dryer. General Electric has also collected about $200 million of these credits.

Think of these energy efficiency tax carve-outs as a version of the earned income tax credit for corporate America. Except Whirlpool and GE aren't poor.

The deal gets sweeter. Those credits can be carried over from one year to the next for up to 20 years. Whirlpool is collecting so many credits that it may not have to pay a dime of corporate income tax for years. The lost revenue from GE and Whirlpool alone far exceeds the $78 million revenue "cost" over 10 years that Congress's Joint Committee on Taxation predicted for the credits.

These appliance credits are in addition to $300 million the feds gave to states as part of the 2009 stimulus to pay rebates to consumers for buying these same goods. So there's one subsidy to make the machines and another to buy them. The Department of Energy says these appliances save families money by reducing energy use by more than half. If that's true, why does the government have to bribe people to make these purchases?"