Energy Tax Reform: Scrap the Baucus Proposal
(Part I: Summary & Conclusions) by Glenn Schleede January 16, 2014
“Clearly, the wind industry would be a huge beneficiary of [this] proposed tax break scheme…. Almost certainly, lobbyists for the wind industry were heavily involved in the drafting of the Committee’s proposal…. It’s time for the Congress to consider the national interest, including the interests of citizens, taxpayers, and electric customers, before again extending tax breaks for the wind industry.”
MEMORANDUM FOR: Chairman and Members the Senate Finance Committee
SUBJECT: Energy Tax Break Proposal announced on December 18, 2013
Thank you for the opportunity to comment on the December 18, 2013, Staff Discussion Draft of the Senate Finance Committee’s Energy Tax Reform proposal.
Your proposal to repeal all existing renewable energy tax breaks is a good one and it should proceed. Your proposal to adopt a new renewable energy tax break scheme should be scrapped.
This memorandum provides comments on
the portion of the proposal dealing with energy used to generate
electricity covered on pages 3 and 4 of the above cited document.
Executive Summary
The Committee’s proposal that would
base the availability and size of the proposed tax break for energy used
in producing electricity on “cleanliness” (specifically, “greenhouse
gas emissions”) measured at a “generating facility” is faulty in three
important respects; specifically:
· Considering emissions at a generating facility would not, in the case of wind turbines, produce an accurate measure of “cleanliness.”· The proposed single criterion, “cleanliness,” ignores many factors that are critically important when attempting to develop an equitable energy tax break.· Contrary to Committee assertions, the proposed tax would not be ”technology neutral.”The large number of wind turbines and “wind farms” that have already been constructed as a result of nearly 20 years of wind production tax credits and other subsidies have caused significant adverse environmental, economic, energy system reliability, scenic, and property value impacts that cannot, realistically, be ignored when considering a new tax break for wind. These impacts include:· Electricity from wind that is high in true cost and low in true value.· Massive wealth transfers harming ordinary taxpayers and electric customers.· Misdirecting billions in capital investments dollars.· High electricity prices that are particularly hard on low income people.· Adverse environmental, ecological, scenic, and property values impacts.
[Note: Part II will excerpt from the detailed analysis between the Summary and the Conclusions]
Conclusions
Without any doubt, massive federal and
state tax breaks during the past 20 years have resulted in the
construction of many wind turbines and “wind farms” in the United
States. The tax breaks and subsidies have been provided because the wind
industry and other wind energy advocates have greatly overstated the
benefits and understated the true cost of electricity from wind. These
parties have, to a great extent, misled the public, media and government
officials.
Work done by analysts in the U.S. and
around the world has, during the past five or six years, demonstrated
conclusively that wind energy has many adverse environmental,
ecological, economic, scenic, and property value impacts.
In fact, the many factors discussed
above, and not just “cleanliness” as defined by the Senate Finance
Committee should be taken into account when considering whether massive
tax breaks and subsidies should be continued for the wind industry.
Despite 20 years of massive federal and
state tax breaks and subsidies for the wind industry and the current
availability of multiple suppliers of these uneconomic machines, the
industry offers no sound evidence that wind turbines will ever be a
commercially viable (i.e., without tax breaks and subsidies) source of
electricity.
Clearly, the wind industry would be a
huge beneficiary of the proposed tax break scheme announced by the
Senate Finance Committee on December 18, 2013. Almost certainly,
lobbyists for the wind industry were heavily involved in the drafting of
the Committee’s proposal. Otherwise, it’s unlikely that the industry’s
Washington-based lobbyists, the American Wind Energy Association, could
have issued a statement commending Senator Baucus and the Senate
Committee almost simultaneously with the Committee’s release of its tax
break proposals.
It’s time for the Congress to consider
the national interest, including the interests of citizens, taxpayers,
and electric customers, before again extending tax breaks for the wind
industry.
Read the entire series:
GLENN SCHLEEDE:
Energy Tax Reform: Scrap the Baucus Proposal (Part I: Summary & Conclusions)
http://www.masterresource.org/2014/01/baucus-energy-tax-reform-1/
http://www.masterresource.org/2014/01/baucus-energy-tax-reform-1/
GLENN SCHLEEDE: Energy Tax Reform: Scrap the Baucus Proposal (Part II: High cost/low value of windpower)
http://www.masterresource.org/2014/01/bachus-energy-tax-reform-2/
GLENN SCHLEEDE: Energy Tax Reform: Scrap the Baucus Proposal (Part III: Environmental Issues)
http://www.masterresource.org/2014/01/backus-energy-tax-reform-3/
http://www.masterresource.org/2014/01/backus-energy-tax-reform-3/
GLENN SCHLEEDE: Energy Tax Reform: Scrap the Baucus Proposal (Part IV: Negative Wealth Effects)
http://www.masterresource.org/2014/01/backus-energy-tax-reform-4/
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