Tag Archives: taxes

Let’s Increase Taxes

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…and the costs all of us must bear from that. But the real story is this…proposal…Hillary Clinton has dreamed up for her Presidential campaign.

The centerpiece idea would require drug makers to devote a sufficient portion of revenue to research and development. Those that don’t would risk losing federal support, such as research grants or an R&D tax credit.

Never mind that drug companies already spend 15%-20% on R&D. This fine businesswoman, who’s never run a company in her life and who was dead broke when she left the White House, says that’s not enough. Never mind, too, that she has studiously avoided saying how much is enough.

This is just another Democrat who hasn’t met a tax she didn’t like. This is just another Democrat who thinks Big Government knows more about running a business than the businessmen, who have to operate in a competitive environment or fail.

Tax Pollution

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That’s what Richard Revesz thinks we should do, instead of subsidizing this or that energy company or industry. In his Wall Street Journal piece, Revesz thinks that “greenhouse gases, smog precursors and other pollutants” should be taxed and all those subsidies done away with.

He’s half right. Subsidies have no place in American economics. To the Democrats who say “green” energy companies need the subsidies in order to grow (quickly or at all), they’ve answered the claim themselves, although they’re loathe to admit it: if a company needs a government subsidy to exist or to grow in our competitive economy, it isn’t ready for our economy. To others who say the oil and gas companies need the subsidies (a relative pittance, anyway, compared to green’s subsidies), the answer also is no they don’t. They can compete.

Revesz would be fully right if we could arrive at an accurate definition of “pollution.” Consider the current en vogue “pollutant,” atmospheric carbon dioxide. Pseudo-climatologists and other “environmentalists” like to fear-monger over CO2 in our air. They carefully ignore the fact that increases in atmospheric CO2 come after planetary warming by some 800-1,300 years. Far from being a pollutant, it’s the ordinary output of respiring life and with those lagging increases it confirms the increasing health of the planet and its burgeoning life.

Until facts stop getting in the way of the money flow, there’s no possibility of accurately defining “pollutant,” and so there’s no reasonable way to tax it.

Energy Wealth Redistribution

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Your tax dollars at work. Exposed by UC Berkeley, yet. This is the Abstract from their working paper The Distributional Effects of U.S. Clean Energy Tax Credits [emphasis added]:

Since 2006, US households have received more than $18 billion in federal income tax credits for weatherizing their homes, installing solar panels, buying hybrid and electric vehicles, and other “clean energy” investments. We use tax return data to examine the socioeconomic characteristics of program recipients. We find that these tax expenditures have gone predominantly to higher-income Americans. The bottom three income quintiles have received about 10% of all credits, while the top quintile has received about 60%. The most extreme is the program aimed at electric vehicles, where we find that the top income quintile has received about 90% of all credits. By comparing to previous work on the distributional consequences of pricing greenhouse gas emissions, we conclude that tax credits are likely to be much less attractive on distributional grounds than market mechanisms to reduce GHGs.

Of course, the top quintile aren’t only the cronies; they’re also the folks rich enough to install these things and/or buy the expensive battery-operated cars—which are horribly expensive, even after the “tax credits,” and in the case of those solar panels, have payback periods measured in generations rather than years.

From the body of the paper [citation omitted]:

If these tax credits are successful in inducing changes in behavior, then we should expect to see increased purchases during years in which the subsidies are particularly generous. Conversely, if credits do not induce additional sales, then the primary effect is just to transfer rents to participants in transactions that would have taken place anyway.

In other words, if there are no additional sales, then the sales that would have occurred anyway would see wealth redistribution from the lower income strata to the higher income strata in addition to the basic price paid for the goody bought.

How did that work out? Taking, for example, hybrid car sales,

There does not appear to be much of a decrease in hybrid sales when the AMVC [Alternative Motor Vehicle (Tax) Credit] was ended for all hybrids at the end of 2010. Moreover, since 2010, hybrid sales have increased significantly without the benefit of the AMVC.

Hmm….

From the paper’s conclusion:

Since 2006, these credits have provided more than $18 billion in subsidies for households who make clean energy investments. Using rich data from tax returns we show that over the last decade US clean energy tax credits have gone predominantly to higher-income Americans. Taxpayers with AGI in excess of $75,000 have received about 60% of all credit dollars aimed at energy-efficiency, residential solar, and hybrid vehicles, and about 90% of all credit dollars aimed at electric cars.

Again, hmm….

Free College

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Hillary wants to rein in the rising cost of a college education.

States would have to increase their own spending on higher education, and universities would be required to control spending[.]

With those strings, Clinton would send an additional $350 billion of your tax money (including your higher taxes she’s proposing to pay for some of this) over the next 10 years to the states for their public universities and community colleges.

And

…new rules would ensure a certain portion of total spending is directed to instruction….

How like a Progressive to think the answer to stopping a rise in the cost of a thing is to spend more money on the thing. And then to add to the cost of the thing with compliance cost imposition.

Can our nation really afford another four or eight years of this lack of understanding about how a free economy works?