Energy subsidies must be eliminated (published in The Oklahoman 6/20)
In a sound free-market economy, taxes should be easy to understand and applied in a
neutral manner. The code should only be used to raise revenue, not to meddle in the
economy. This spring, nearly every Republican in Washington supported Rep. Paul
Ryan’s budget that embraced these principles, yet now some of these same lawmakers
are pushing policies that will do the opposite.
Recently, a group of more than 20 House and three Senate Republicans — including
Oklahoma Reps. Frank Lucas and Tom Cole — signed on to the American Renewable
Energy Production Tax Credit Extension Act. The bill would extend several targeted tax
credits for renewable energy, including wind power. If we want a simpler tax code and a
free-market energy policy, these subsidies must be allowed to expire at the end of this
year as scheduled.
Policymakers have been using the tax code to steer Americans’ energy choices for
decades. It has only recently come under public scrutiny thanks to the loss of millions of
taxpayer dollars to “green” companies like Solyndra. But oil, natural gas, nuclear
energy, ethanol, wind and solar energy have regularly enjoyed lucrative subsidies to
promote production and stability, create jobs and lower prices for the consumer — or so
Americans have been told. In reality, the subsidies keep taxes high on productive
companies while politicians get to pursue their favorite pet projects, all while energy
prices continue to rise.
This holds true for wind energy as well. Many backers of extending the subsidies claim
that in order to get a foothold in the energy market, wind companies should get the
same support that fossil fuels were given in their infancy. They say that if wind is just
given a chance to develop, it will grow into a self-sustaining, cost-efficient industry.
What they don’t tell you is that the wind industry has been getting subsidies for nearly
20 years and has yet to show any signs of such growth. In the three years that the
subsidies were allowed to lapse, the growth of the industry fell by 93 percent — proof
that the industry isn’t viable unless it is able to gain special exemptions from our overly
burdensome tax code.
It’s time for lawmakers to realize that if a new technology truly has worthwhile benefits
for American consumers (lower cost, higher efficiency, environmental benefits or
otherwise), that technology will demonstrate its value by competing for consumers’
dollars in the open market — not by gobbling up handouts from their pals in
Washington. Oklahomans can’t afford these subsidies any longer, especially considering that the net worth of American households has fallen by 39 percent.
Energy subsidies, including the Wind Production Tax Credit, must be eliminated to enable true competition. This forces companies to become more innovative and efficient in order to make their energy source attractive to consumers. It’s time for Republicans to live up to their professed free-market principles and get rid of these special giveaways.
q Comments
blog comments powered by Disqus