Tax Credits Aplenty
22/04/09 00:02 Filed in: Tax
Congress, and indeed our government by and large, has
always used clever little means of taxing one thing
and subsidizing another to enact its policies. Just
because the mechanism is clever doesn't mean its
necessarily corrupt. But once things start to get
intertwined its easy to lose sight of where things
are going. And on top of that politicians are very
clever with their use of words. Thus when congress
passed a highway bill that created a
50-cent-per-gallon tax credit for industries that
mixed alternative fuels with their regular fossil
fuels, it seemed like the math was fairly simple.
The math being of course, we want more "alternative energy," so we will give you money if you use it. And for a while I would surmise, all was well. However in 2007, congress decided to expand just what would count as an "alternative fuel." Bad thing? Not necessarily, more alternative fuels is a good thing, right? Well maybe not as the Wall street journal points out.
Problem is, when they said "expand" what they really meant was to "expand" it in such a way as to bring some of these tax credits back home to their constituents. The tax credit is now for non-mobile installations as well, making one wonder how it could possibly still be the highway bill passed in 2005. Furthermore, our tax dollars are now going to places like international paper, and fish processing plants. (since they use fish oil to run their boilers)
I am reminded, as I often am, of an episode of the Simpsons. The episode of note is one in which the family finds their house right under the path of jet plains headed for the Springfield airport. The Simpsons eventually get the airspace rezoned or some such, such that the jets would now fly over poor people instead. The means by which they do this is, by a janitor's suggestion, paper clipping their bill to the back of the "flags for children" bill.
I feel as though that is exactly what is going on here. congressmen want to bring home the bacon, and "alternative energy" simply provides them with some ready cover to do it.
The math being of course, we want more "alternative energy," so we will give you money if you use it. And for a while I would surmise, all was well. However in 2007, congress decided to expand just what would count as an "alternative fuel." Bad thing? Not necessarily, more alternative fuels is a good thing, right? Well maybe not as the Wall street journal points out.
Problem is, when they said "expand" what they really meant was to "expand" it in such a way as to bring some of these tax credits back home to their constituents. The tax credit is now for non-mobile installations as well, making one wonder how it could possibly still be the highway bill passed in 2005. Furthermore, our tax dollars are now going to places like international paper, and fish processing plants. (since they use fish oil to run their boilers)
I am reminded, as I often am, of an episode of the Simpsons. The episode of note is one in which the family finds their house right under the path of jet plains headed for the Springfield airport. The Simpsons eventually get the airspace rezoned or some such, such that the jets would now fly over poor people instead. The means by which they do this is, by a janitor's suggestion, paper clipping their bill to the back of the "flags for children" bill.
I feel as though that is exactly what is going on here. congressmen want to bring home the bacon, and "alternative energy" simply provides them with some ready cover to do it.