Tag Archives: taxes

Economic Viability of Wind Energy

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Tim Phillips, in The Wall Street Journal, quoted Christopher Flavin, of the Worldwatch Institute, as saying in 1984,

Tax credits have been essential to the economic viability of wind farms so far, but will not be needed within a few years.

It’s been a few years. It’s been 30 years’ worth of “few.”

In all, wind energy “generators” get $56.29 per MW-Hr in Federal subsidies. To put that in perspective, natural gas gets $0.64, and nuclear power $3.14.

These guys are free-loading off you and me, and it’s time to put a stop to it. They need to stand or fall in the free market: if their technology is ready for prime time, they’ll have no trouble. If their technology isn’t—after 30 years—they’ve had enough of our prop-up money.

Cut off the subsidies—or more accurately, do not renew them (they expired in 2013) with finality. While the new Congress is about it, it should cut off those natural gas subsidies (those for oil, too, even though they’re similarly just walking around money) and the nuclear energy subsidies, also.

The free market is a much better watchdog for energy production than the Federal government ever can hope to be, no matter how honest or diligent those bureaucrats and regulators might be.

The Taxpayer and Union Pensions

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Here’s the state of the Pension Benefit Guaranty Corporation, a Federal government entity set up to insure union-negotiated pension plans.

Overall, the PBGC has total assets of $90 billion and total liabilities of $152 billion.

The multiemployer subset of that, the section of the PBGC that “guarantees” union-sponsored pension plans to which groups of companies belong, has total assets of $1.8 billion and total liabilities of $44 billion.

The single employer subset, the PBGC section that “guarantees” the pensions of individual companies, has total assets of $88 billion and total liabilities of $107 billion.

The reason for this is that what are being insured are not just any old pension plans, but defined benefit pensions in particular. Recall that these are the plans that guarantee a pensioner a set amount of money every month for life, regardless of how much money the pension plan actually has in it. Somebody has to make up the difference and make the payments, or the plan goes bust, and the pensioner gets nothing. With the PBGC, that guarantor is you and I: us taxpayers.

Of course, the PBGC proclaims that it has never taken a penny of taxpayer money, and that’s true. But the PBGC has never been in worse shape, either, and it’s deteriorating rapidly. Last year, the PBGC was in the hole only $36 billion, compared to this year’s $63 billion pit.

The PBGC also proudly proclaims its mission is to

encourage the continuation and maintenance of private-sector defined benefit plans.

Fine. Congress, as part of the budget bill it will pass next winter, should cut us taxpayers out of this corporation altogether. Congress should spin off the PBGC into a wholly private sector insurance corporation with no ties to the Federal government at all. Let the new company prosper or fail entirely on the private sector merits of encouraging and insuring private-sector defined benefit plans.

Pass the Bill, Anyway

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…and force President Barack Obama to sign it or to veto it. On the record. Either way, it shapes the 2016 elections, and if Obama actually signs, it’ll be good for the country.

Obama has said he’ll veto

a potential agreement to permanently enact tax breaks on business investments in new equipment and research and development as part of a plan that would renew dozens of expired tax breaks for businesses and individuals both.

Obama threatened his veto even before any such plan actually has been developed and floated. Because you have to veto the bill before you can find out what is in it, away from the fog of the bill writing.

Obama said, through his Deputy White House Press Secretary, Jennifer Friedman, that he would

veto the proposed deal because it would provide permanent tax breaks to help well-connected corporations while neglecting working families[.]

This, of course, is nonsense. Corporations don’t pay a lot of taxes, anyway; they pass what they pay on to their customers, including working families and unemployed families, in the form of higher prices. Contra Obama, the best way to help families is to leave more money in their pockets through lower taxes and to put more money in their pockets by getting government out of the way of the economy, so that growth can occur, hiring can occur, pay raises can occur.

Pass the bill, and force Obama to do something besides talk.

Congress over the next Two Years

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This is what our newly elected Congress needs to do over the next two years.

  • Re-pass the 40 jobs bills which Senator Harry Reid (D, NV) suppressed, without changing a word. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. President Barack Obama will veto or sign them.
  • Repeal the ACA and Dodd-Frank. Do these with roll call votes, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them.
  • Repeal various parts of ACA, Dodd-Frank, one by one. Do each with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them.
  • Repeal most of the EPA’s regulations, particularly the ones impacting coal, oil, natural gas, and how private lands can be used. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them.
  • Pass tax reform with lowered personal, business rates, closed loopholes and subsidies. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them.
  • Pass budgets each year that fully fund the Federal government without funding the ACA or Dodd-Frank remnants and severely restricting funding for the EPA and the Labor Department and its political arm, the NLRB. Do this with roll call votes, forcing the Democrats onto the Congressional voting record. Obama will veto or sign them. Make clear how the obstructionist President prefers to shut off government altogether in his temper tantrum if he can’t have his way.
  • Pass border control legislation. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign.
  • Pass immigration entry reform legislation contingent on a decently secured border, but don’t wait on border security to pass this. The contingency will allow this reform to be passed this session. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign.
  • Pass legislation vis-à-vis existing illegal aliens contingent on a decently secured border and entry reform, but don’t wait on those to pass this. The contingency will allow this reform to be passed this session. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign.
  • Seriously restrict regulation delegation authority. Do it with a roll call vote, forcing the Democrats onto the Congressional voting record. Obama will veto or sign.

Our Congress needs to do this against a backdrop of House—and now Senate—hearings into Fast and Furious, IRS, Benghazi, VA, Secret Service failures, immigration lawlessness, NSA snooping, Iran’s nuclear weapons program, DoJ stonewalling of those investigations. Both chambers need to pursue these investigations and associated hearings with zeal, but they shouldn’t be in attack dog mode.

Our Congress needs to take action on the findings of the House Select Committee on Benghazi chaired by Congressman Trey Gowdy (R, SC).

This adds up to a full slate of activities for the 114th Congress.

All cases—legislation and investigative hearings—have two purposes. The first, and foremost, purpose is to get government out of the way of our economy so we can regain our prosperity and to learn and expose the truth of what’s been going on during the Obama administration so that those…failures…can be corrected. The secondary purpose is to keep the Obama administration’s failures of policy and of behavior in the public’s eye.

Don’t waste time on an impeachment effort. They don’t have the votes to convict in the Senate, but the effort will let the NLMSM change the subject away from the Obama administration failures. Of course, the NLMSM might well attempt simply to spike the stories about the legislation and the investigations and hearings, like they did Jonathan Gruber’s truth-telling and most of them did Obama’s immigration “reform” speech last night. But it’ll be a hard thing to spike for two years.

This will be the most effective way of demonstrating the distinction between Conservatives and Democrats/Progressives, of showing what Conservatives stand for and work to achieve compared to what the Democrats/Progressives stand against and work to block. It will give Americans a choice in 2016: a President of little experience and no accomplishment—Hillary Clinton channeling one aspect of Barack Obama—a President bent on Progressive, Big Government policies without regard to the law or the American people—Elizabeth Warren channeling another aspect of Barack Obama—versus a Conservative President, bent on reducing government’s intrusion into Americans’ lives and shrinking government’s interference with Americans’ economy.

This will shape the elections of 2016.

Economics and the AP

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The backdrop is this: last spring, Japan enacted a tax hike in an effort to start covering its public debt and bring that under control for the benefit of the Japanese economy and the Japanese citizen. The country promptly fell into recession as even more money was taken out of the citizens’ hands, removed from the private sector of the economy. As a result of this, Prime Minister “Shinzo Abe called a snap election for December and put off a sales tax hike planned for next year until 2017.”

Here’s the AP’s lack of understanding of basic economics, as demonstrated on the other side of the link above.

Japan needs more tax hikes to get its swollen government debt under control, but the April tax increase, to 8% from 5%, crushed consumer and business spending.

Their own statement ignores both the nature of debt and reason the current Japanese national debt is so far out of hand (an error the present American administration has been making for these last six years). Debt is created by borrowing, which is the result of spending more than income. Certainly one way to address that is by increasing income: in (the Japanese) government’s case, by raising taxes. That well, though, can only be gone to so much, as the AP illustrates without understanding. Raising taxes takes money away from the employers and employees—the folks who power any economy by buying stuff and so creating demand for producers of stuff, who produce more stuff, and so hire more folks, and so…. After a point, too much money is taken out of the economy through taxes, and the thing stalls—as Japan’s economy has just done, from last spring’s tax bump.

The other way to address national debt, though, is to stop borrowing by stopping spending so much. This is the step the AP has demonstrated, via that quote above, that it does not understand.

If Japan wants to get its government under control, if Abe and his Liberal Democrats want to break Japan out of its new recession and its decades-long stagnation, they need to reduce spending below current revenues, not attempt to raise revenues above current spending. This is necessary for two reasons. One is that the latter is open-ended: there is no incentive to cap spending; spending always will rise, necessitating ever increasing taxes.

The other reason is one I keep harping on. Taking money out of the private sector, out of the hands of the drivers of economies, stunts the economy. Taking money out of the private sector and using government to spend it creates a vicious circle: it crowds out the private economy and, keeping the money out of the private economy, government spending shrinks the private economy even further.

And this claim by the AP:

Eventually, Japan must boost taxes to cover rising costs for health and elder care in this aging society.

No. Japan must reduce taxes and reduce spending even further, thereby letting the resulting robust and growing economy generate the money to cover those costs.

One last bit of understanding lack, this time by Abe, but a thing about which the AP writes approvingly is this:

Abe reportedly plans to announce tens of billions of dollars in new stimulus….

This is just more spending and borrowing, though. Look for it to fail as completely as have the repeated spendulus episodes our own administration has inflicted on us these last six years.