Browsing by Subject "Tax credits"

Now showing 1 - 4 of 4

Creative financing & strategies for mixed-income transit oriented development in Dallas, Texas
(2013-08) Partovi, Lauren Neda; Wilson, Barbara B. (Barbara Brown)
This study evaluates the current environment for mixed-income transit oriented development along DART rail within the city limits of Dallas. A close look at income and racial disparity is used as the foundation for advocating for a more proactive and aggressive approach to the development of affordable units proximate to affordable transportation choices. Assembling financing for mixed-income TOD projects is especially challenging, and multiple layers of federal, state, and city funding mechanisms are required for achieving the capital requirements of the development. Both typical affordable housing funding methods and new and nontraditional funding methods for multifamily housing were researched and evaluated with the intention to propose possibilities for catalyzing development in DART station areas within the City of Dallas that have, to this point, experienced underdevelopment.
Essays in public economics
(2017-05) Rodgers, Luke Patrick; Abrevaya, Jason; Manoli, Dayanand S.; Cabral, Marika; Lowery, Richard
This dissertation empirically investigates three areas of public economics related to tax policy. The first chapter estimates the pass-through of child care tax credits. Child care tax credits are intended to relieve the financial burden of child care expenses for working families, yet the benefit incidence may fall on child care providers if they increase prices in response to credit generosity. Using policy-induced variation in the Child and Dependent Care Credit and multiple datasets in both difference-in- differences and instrumental variable frameworks, I find evidence of substantial pass-through: around $0.75 of every dollar is passed through to providers in the form of higher prices and wages. Robustness checks support the conclusion that the bulk of credits are crowded out by increased prices. Furthermore, the relative inelasticity of child care suppliers implies that increased non-refundable credit generosity may have the unintended effect of making child care less affordable for low-income families, though the magnitude of this effect may be tempered by heterogeneous pass-through rates. The second chapter examines how the availability of tax deductions affects charitable giving behavior. Since 2004, American households have been able to deduct state and local sales taxes on their federal tax returns; previously, only state and local income taxes were deductible. Exploiting variation in state financing and deductibility over time induced by the law change in a difference-in-differences framework, I investigate how an additional deduction category impacts the decisions of whether to give to charity (extensive margin) and of how much to give. Giving at the extensive margin decreased 3 percentage points and the amount donated decreased 11% after the introduction of the sales tax deduction. These findings suggest that charitable giving is not only sensitive to the tax price of giving but also to the presence of alternative deduction categories. The third chapter investigates the sensitivity of lottery sales to a withholding tax on gambling winnings. Legalized gambling is a popular source of tax revenue in the United States; however, the ability to increase tax revenue through higher tax rates is limited by the presence of non-taxable and cross-border substitutes. In July 2009, New Hampshire introduced a 10% withholding tax on gambling winnings. Using a novel dataset in a difference-in-differences framework, I document significant reductions in NH lottery sales and estimate a price elasticity well in excess of -1. The tax was repealed in May 2011, after which I document a large rebound in sales. The response is consistent with informed choice by consumers, and larger changes in border areas provide evidence of cross-border shopping.
Hydrogen supply chain optimization for industrial stationary combustion decarbonization under U.S. Federal policy incentives
(2024-05) Pimentel, Aidan ; Leibowicz, Benjamin D.; Bickel, J. Eric
Today the main driver for the production of hydrogen is demand for the molecule as a feedstock for chemical processes and products. With significant international and intranational public policy initiatives to reach emissions targets, hydrogen is being proposed as a candidate to replace the role of fossil fuels in a variety of applications for a low carbon energy industry. Hydrogen can be combusted to produce thermal energy or fed into a fuel cell with oxygen to produce electricity. This study examines the viability of producing hydrogen with steam methane reformers (“SMR”) or proton exchange membrane (“PEM”) electrolyzers to satisfy stationary combustion energy demand at industrial facilities in Texas under current government incentives. Over the past few years, the federal government has enacted low carbon energy incentive legislation including the Inflation Reduction Act (“IRA") which created the Section 45V Credit for Production of Clean Hydrogen (“45V") and enhanced both the 45Q Credit for Carbon Dioxide Sequestration (“45Q") and Section 48 Investment Tax Credits. Additionally, under the Bipartisan Infrastructure Law the government has awarded funding of $1.2 billion to the HyVelocity Hub in Houston via the H2Hubs program. This research seeks to determine whether retrofitting existing stationary combustion units to utilize hydrogen is economically viable from a firm's perspective and if it is a cost-effective pathway with today's technology to reduce greenhouse gas (“GHG”) emissions from the U.S. government's perspective. Establishing a reliable high volume demand market is important because of the significant capital expenditure required to build out upstream and midstream hydrogen infrastructure. Since the market we propose targets high volume demand centers, our model focuses on centralized production technologies. We test the feasibility of this hydrogen market by utilizing a profit maximization mixed integer linear program (“MILP”) to determine the optimal infrastructure configuration for such a hydrogen supply chain and explore how it varies under different scenarios. We develop the case study in Texas by constructing a graph where each node represents a location capable of producing hydrogen or having its current natural gas stationary combustion units converted to utilize hydrogen. The nodes of the graph are connected by arcs representing a candidate hydrogen pipeline network which follows the right of way of existing natural gas and hydrogen pipelines. In this thesis we study what combination of tax credits can stimulate the development of hydrogen infrastructure to satisfy industrial stationary combustion energy demand. We seek to determine which hydrogen production technology is most profitable for a private sector firm under different scenarios. Our model was developed to help us determine whether hydrogen production should be located onsite or offsite from consumption and under which conditions these infrastructure layouts prevail. Lastly, we utilize our model to study the average abatement cost to the government for the reduction of carbon dioxide under different scenarios. We find that the spatial variation of input commodity prices in the hydrogen production process play an important role in the infrastructure our model develops. We also find that the U.S. government could utilize a tool like our model to study what level of abatement costs it is willing to sustain when reducing industrial stationary combustion emissions. The abatement cost depends on the credit value granted to blue and green hydrogen production. We see a hydrogen supply chain (“HSC”) with a relatively high abatement cost is economic for firms to develop if they are able to achieve the highest value 45V tax credit and that infrastructure of this nature is not economic under just 45Q and investment tax credits.
Using real options to value optimal threshold for renewable energy technologies of a tax credit based on cost of carbon offset
(2023-04-20) Thakral, Avish; Ronn, Ehud I.; Tuttle, David P.; Castellanos, Sergio
Despite significant cost reduction over the years, most renewable energy technologies still depend for deployment on federal subsidies and tax incentives in the form of Production Tax Credits (PTCs) and Investment Tax Credits (ITCs). The recently passed Inflation Reduction Act (IRA) provisions around $260 billion dollars in the form of consumer and corporate tax incentives over the next ten years to support clean energy technologies and to reduce greenhouse gas emissions by 40% by the next decade. While most of these tax incentives are based on the costs involved in the project such as for ITCs and the amount of electricity production for PTCs, there arises the question of whether the total value of tax credits that each technology gets holistically represents its lifetime avoided carbon emissions. In other words, how green is the technology? This thesis proposes and evaluates an alternate approach to the tax credit structure which integrates the value of avoided carbon emissions using avoided emissions methodology and the standardized Benefit Per Ton (BPT) method published by the Environmental Protection Agency (EPA). This method uses the Social Cost of Carbon (SCC) as a measure of quantifying the benefits of avoided emissions. To value the new proposed tax credit structure and assess the benefits of this approach, the thesis uses and compares the Discounted Cash Flow (DCF) and Real Options Analysis (ROA) using the Binomial Option Pricing method. Both valuation models are done for a hypothetical 100 MW utility-scale solar power plant connected to the Austin Energy Node (AEN) inside the state of Texas. To value the option, we consider the role of the time-dependent declining strike price, which is the unit installation cost of the project. The binomial model is found to have a greater value than the DCF model as it not only incorporates the latter but also the feature of optimal exercise date. The thesis further evaluates the optimal threshold of cost of carbon where the investor will do optimal early exercise of this option with the new proposed tax credits as a constraint.