Across the country, Democrats and their super PAC allies are portraying broadly available investment deductions as special tax breaks for data centers. They are, in short, attacking infrastructure investment across the economy. The reality is that the environmental wing of the Democratic Party opposes economic growth, and one need only witness stagnant economies and high energy prices in blue states to see the result of its policies in action.
“Polling shows that voters of all stripes are as fed up with Big Tech as they are with Big Oil,” said Sara Schreiber, the senior vice president of the League of Conservation Voters Victory Fund, in a press release announcing a national ad buy against Republican House candidates, adding, “Republicans are trying to run away from their votes to give those companies tax breaks instead of reining them in. We want to make sure every voter in the district knows the truth as they head to the polls in November.”
What is the “truth” about Republicans whom the League of Conservation Voters is targeting? Did they vote for special tax breaks for data centers, as Democrats allege?
No, they did not. What they voted for was the One Big Beautiful Bill Act, which made three tax changes to help businesses recover the costs of investing in America. First, it permanently restored immediate deductions for qualifying equipment purchases. Second, it restored immediate deductions for domestic research and development expenses. Third, it temporarily allowed immediate deductions for qualifying manufacturing and production buildings. Instead of forcing businesses to spread deductions over years or decades, the law lets them deduct eligible costs when they incur them, making more investments financially viable.
These changes make it easier to build and equip data centers, but they also make it easier to build and equip everything else. There are no special tax breaks that apply only to data centers. These changes make investment more affordable across the economy, helping manufacturers install assembly lines, farmers buy tractors and irrigation equipment, freight companies upgrade their trucks, and telecommunications providers expand their networks.
The law’s research provisions help businesses develop new medicines and technologies, while its manufacturing provisions encourage the construction of new factories. Although the law does not allow immediate deductions for every type of infrastructure, its benefits extend far beyond Silicon Valley. Democrats are taking a broadly available deduction for productive investment and portraying it as a special favor for an unpopular industry.
It is not an argument they apply only to taxes. The wreckers who constitute the environmental wing of the Democratic Party use a similar attack to try to sink the bipartisan permitting compromise recently reached in the Senate.
The Bipartisan American Affordability and Jobs Act would set enforceable deadlines for environmental reviews, limit the time opponents may take to file lawsuits, and protect approved projects from arbitrary political reversals. It would streamline approvals for transmission lines and accelerate connections to the electricity grid. These changes would make it easier to build energy and infrastructure projects across the economy, from pipelines and geothermal plants to wind farms and the power lines serving new factories.
Data centers would benefit, too, from faster permitting where federal approvals are required and from the additional electricity infrastructure they need, while being required to pay associated transmission costs.
Because the permitting agreement would make a broad range of infrastructure easier to build, including data centers, the socialist wing of the Democratic Party is lining up against it.
“It would be tone deaf if Congress makes it easier to build data centers right after an election with bipartisan rage against shoving them down the throats of local communities,” Rep. Ro Khanna (D-CA) said Tuesday on social media.
“Data centers have tremendous energy demand, and the permitting bill will facilitate a buildout of the energy infrastructure necessary to build these mega facilities,” said Jim Walsh, the policy director for Food & Water Watch.
A BIPARTISAN DEAL TO GET AMERICA BUILDING AGAIN
The real problem Democrats have with the tax law and the permitting agreement is that both make it easier for investors to deploy capital and build infrastructure for the future. Democrats don’t want that. Rising electricity demand from data centers need not mean higher prices if utilities can expand supply. Natural gas drilling and pipelines have demonstrated how expanding energy supply can make energy more affordable, especially in red states. Yet Democrats still oppose these projects because of supposed harm to the environment.
The reason it is far more expensive and time-consuming to build everything from houses to highways in blue states is that Democrats enact policies that make it so. Now they want to inflict those policies on red states. Voters should understand the cost of that choice and cast their ballots accordingly.
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[ H/T Washington Examiner ]
