by Robert Maynard
According to a recent Wall Street Journal article, Senator Bernie Sanders is at it again expressing selective outrage over the latest budget deal:
Many corporations, including General Electric and Exxon-Mobil, have made billions in profits while using loopholes to avoid paying any federal income taxes. We lose $100 billion every year in federal revenue from companies and individuals who stash their wealth in tax havens off-shore like the Cayman Islands and Bermuda. The sum of all the revenue collected by the Treasury today totals just 14.8% of our gross domestic product, the lowest in about 50 years.
In the midst of this, Republicans in Congress have been fanatically determined to protect the interests of the wealthy and large multinational corporations so that they do not contribute a single penny toward deficit reduction.
First, to give Bernie his due, he does have a point about corporate tax breaks. Here is how a Washington Post/Bloomberg Business Section article descried some of the problems with the bill:
Wind farms, motorsports tracks, global banks and other businesses won revived tax breaks in a $75.3 billion package included in a last-minute budget deal passed by Congress and signed by President Barack Obama yesterday.
The tax-break extensions, mostly for companies, made it into the bill past Republican demands for spending cuts and Democratic resistance to business benefits. Both parties have complained for years about some of the special-interest provisions.
The package of tax extensions survived attempts to curb them to reduce the U.S. budget deficit that has exceeded $1 trillion for four years. Their beneficiaries and lobbyists received a reprieve and a chance to bargain for another extension this year.
The problem with Senator Sanders outrage is that that it is highly selective. The Republicans were far from alone in trying to “protect the interests of the wealthy and large multinational corporations.” Here is a description from a recent Washington Examiner article about how much of this got into the bill:
The “fiscal cliff” legislation passed this week included $76 billion in special-interest tax credits for the likes of General Electric, Hollywood and even Captain Morgan. But these subsidies weren’t the fruit of eleventh-hour lobbying conducted on the cliff’s edge — they were crafted back in August in a Senate committee, and they sat dormant until the White House reportedly insisted on them this week.
The Family and Business Tax Cut Certainty Act of 2012, which passed through the Senate Finance Committee in August, was copied and pasted into the fiscal cliff legislation, yielding a victory for biotech companies, wind-turbine-makers, biodiesel producers, film studios — and their lobbyists. So, if you’re wondering how algae subsidies became part of a must-pass package to avert the dreaded fiscal cliff, credit the Biotechnology Industry Organization’s lobbying last summer.
Some tax lobbyists mostly ignored the August bill “because they thought it would be just a political document,” one K Streeter told me. “They were the ones that got bit in the butt.”
Here’s what happened: In late July, Finance Chairman Max Baucus announced the committee would soon convene to craft a bill extending many expiring tax credits. This attracted lobbyists like a raw steak attracts wolves.
Former Sens. John Breaux, D-La., and Trent Lott, R-Miss., a pair of rainmaker lobbyists, pleaded for extensions on behalf of a powerful lineup of clients.
As you can see, it was clearly a bi-partisan effort. If you look a a little closer at Bernie’s rant, it is clear that his real objection is to who gets the breaks: “President Obama and the Democrats have been extremely weak in opposing these right-wing extremist proposals.” He has no problem with breaks going to left-wing proposals, in fact, he encourages it. The following is from his own website under a section entitled “Modest Victories”: “Further, as we continue our efforts to address the crisis in global warming the bill extends the Production Tax Credit for wind. This means more clean energy for Vermont and America and more jobs for our economy.” I pointed out in a True North article earlier this year that industrial wind power was not economically competitive without government favors. This should come as no surprise. As the article pointed out:
Spain has already done a comprehensive study on the “path of green jobs as a means of economic expansion” and came up with the following conclusion:
“Europe’s current policy and strategy for supporting the so-called “green jobs” or renewable energy dates back to 1997, and has become one of the principal justifications for U.S. “green jobs” proposals. Yet an examination of Europe’s experience reveals these policies to be terribly economically counterproductive.
This study is important for several reasons. First is that the Spanish experience is considered a leading example to be followed by many policy advocates and politicians. This study marks the very first time a critical analysis of the actual performance and impact has been made. Most important, it demonstrates that the Spanish/EU-style “green jobs” agenda now being promoted in the U.S. in fact destroys jobs, detailing this in terms of jobs destroyed per job created and the net destruction per installed MW.”
“Optimistically treating European Commission partially funded data1, we find that for every renewable energy job that the State manages to finance, Spain’s experience cited by President Obama as a model reveals with high confidence, by two different methods, that the U.S. should expect a loss of at least 2.2 jobs on average, or about 9 jobs lost for every 4 created, to which we have to add those jobs that non-subsidized investments with the same resources would have created.”
Finally, putting aside for a moment whether human generated CO2 has much of an effect on global temperature, it is questionable at best whether wind power actually serves to reduce CO2 emissions. In fact, as a Guardian UK article from June of last year points out, it may even increase CO2 output:
A new report published on Monday by Civitas, a social policy thinktank that promotes a “free and democratic society”, is claiming that wind power is “inordinately expensive and ineffective at cutting CO2 emissions”. In a particularly eye-catching claim, it argues that “wind power, backed by conventional gas-fired generation, can emit more CO2 than the most efficient gas turbines running alone”. If true, that would make a mockery of the government’s current policy of promoting and subsidising wind turbines.
The report cites as evidence the findings of Dr Kees le Pair, a retired Dutch physcist and long-time critic of the wind industry: “In a comprehensive quantitative analysis of CO2 emissions and wind-power, Dutch physicist C. le Pair has recently shown that deploying wind turbines on “normal windy days” in the Netherlands actually increased fuel (gas) consumption, rather than saving it, when compared to electricity generation with modern high-efficiency gas turbines.”
The truth of the matter is that subsidizing wind power only serves to prop up what Ethan Allen Institute founder John McClaughry has described as the “Renewable Industrial Complex.”