Picking Winners And Losers With The Tax Code

One of the things that would be really good about passing Paul Ryan’s budget plan (it won’t happen–but it would be really good) would be that the government would lose its power to pick winners and losers in the American economy. That’s one of the reasons Paul Ryan’s budget will never pass–Congress and the President do not want to give up the power to control people through the tax code. However, every now and then, someone in the Senate actually does something smart in terms of taxes. The Senate (in a 51-47 vote)  has nixed the President’s plan to raise taxes on oil companies (which of course would raise the price of gasoline at the pump).

The New American posted a few thoughts on the Senate vote today:

“This bill is pretty simple: we end wasteful subsidies to the big five oil companies and we use those proceeds to invest in clean energy, in creating jobs, and reducing the deficit,” Menendez said Monday when introducing the bill. “I think the American people are sick and tired of paying ridiculously high gasoline prices at the pump and then paying big oil again with … taxpayer subsidies.”

However, as Bob Adelman asserted last May in The New American, there is a grave difference between tax breaks and what Obama and Menendez characterize as “subsidies.” “The echo chamber of the mainstream media and liberal Democrats merely confirms their attempt to confuse the issue to promote their agenda,” Adelman affirmed. “Subsidies and tax breaks are different entities entirely, and getting the terms wrong means getting it all wrong.”

As stated above–these are not subsidies–subsidies are what we are paying to alternative energy companies that keep going broke or shipping their business to China. Not only are these not subsidies–they are tax breaks that all companies routinely get.

The article concludes:

But Menendez goes a step further, and calls the oil tax breaks “wasteful subsidies.” Is this contrary to the clean-energy industry’s un-wasteful subsidies? Obama’s Energy Department has dished out billions of dollars in “green” subsidies, to companies like SpectraWatt, Eastern Energy, Beacon Power, Evergreen Solar, and the controversial Solyndra — which all ended up in bankruptcy. These five companies, along with seven others, are now in financial disarray, after collectively reaping more than $6.5 billion in taxpayer-backed government assistance.

In effect, one might suggest that Obama and Menendez are pointing their fingers in the wrong direction.

The Obama Administration has never actually had a successful energy policy. It is unrealistic to think that they will develop one at this point.

 

 

Enhanced by Zemanta

Where Our Money Went

Monday’s Boston Herald reported that Evergreen Solar Inc., has filed for Chapter 11 Bankruptcy. It is unfortunate when any company goes bankrupt, but Evergreen Solar has received some serious financial help from the Commonwealth of Massachusetts along the way.

The article reports:

Greg Bialecki, Patrick’s economic development czar, defended the administration’s support for the once-promising Evergreen. The state is still trying to recoup about $4 million in cash from the Marlboro-based company.

As previously stated, the green energy industry will develop naturally if it is allowed to make a profit. The pioneer spirit of America is still here. What is needed is the freedom to develop a technology and the ability to profit from that technology. Government interference in the marketplace does not allow the best ideas to thrive–instead it props up inferior technology that is not cost effective and will not succeed.

The article further reports:

To cut costs, Evergreen shifted some of its production to Wuhan, China, last year. That joint venture will remain operating subject to financing talks with Chinese investors.

That is adding insult to injury. I appreciate that the state trying to promote green energy, but I don’t appreciate using taxpayers’ money to prop up businesses.

Enhanced by Zemanta