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Heritage Foundation...
Morning
Bell: Wind Energy Subsidies Are As Useful As VHS Tape Subsidies
By Amy Payne
August 16, 2012
The wind production tax credit is set to expire at the end of this
year, which has the industry crying out for continued subsidies.
Heritage’s Nicolas Loris has made the case that the wind energy tax
credit makes as much sense as a VHS production tax credit. Can you
imagine the logic: “We can’t afford to lose our VHS tape manufacturing
plants. They provide valuable jobs. Americans need a variety of ways to
watch recorded entertainment.”
Loris says this is what proponents of wind energy tax credits sound
like.
Wasting taxpayer dollars on different but similar programs—claiming
that these subsidies really are necessary to create jobs or prevent
layoffs—simply creates a “subsidies for me but not for thee” mentality
in Washington….Renewable energy production tax credits have received
support from Democrats, Republicans, and industry groups, but that
doesn’t make it good policy.
The credit is a huge handout to wind producers, allowing them to sell
their electricity for less than market price. They would profit even if
they offered it for free—because they would still pocket the subsidy.
The subsidy is already equivalent to 50 percent to 70 percent of the
wholesale price of electricity. And that isn’t the only
special-interest treatment wind producers receive, as Heritage’s David
Kreutzer explains:
Though you would not know it from wailing and gnashing of teeth over
the expiration of the [production tax credit, or] PTC, many states also
have renewable energy standards that force ratepayers to buy wind,
solar, and biomass produced electricity regardless of how much it
costs. These renewable standards are separate from—and, for wind-power
producers, in addition to — the PTC.
A business that cannot survive without taxpayers paying 50 percent of
the costs does not help the economy. Instead, it eats up more value
than it produces.
Policies like the production tax credit concentrate benefits on a few
recipients and spread the costs among the rest of us through higher
taxes and energy costs. They hurt the economy by making production more
expensive, which puts U.S.-based products at a competitive
disadvantage. This means fewer jobs for American workers. Those
production expenses also make necessities more expensive for consumers,
who are already hurting from the higher energy costs. Higher prices
across the board hit lower-income Americans the hardest.
Read the rest of the article at The Heritage Foundation
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