Green Energy Tax Cuts

Insightful comment, oh mysterious one who comments...

2011-11-21T20:01:33.860-05:00

Insightful comment, oh mysterious one who comments anonymously...

For an expanded exposition of this proposal, look here:

http://www.21stcentrist.com/2009/09/super-pro-bono-best-new-idea-in-health.html

I truly think the answer lies in the fact that ...

2011-11-21T19:12:03.371-05:00

I truly think the answer lies in the fact that 'most' healthcare providers have a strong sense of giving back built into their DNA and would love a health care system that reduced the friction in the process so they could easily provide care to those in need.

Imagine a system where those that qualify for Medicare/Medicaid receive it pro bono from the care givers, hospitals, and pharmaceutical companies. The healthcare providers are then given a tax credit (deduction) at the fair market value of the services provided.

Key #1 - Tort Reform - can't sue a caregiver doing pro bono services. Think good samaritan law here.
Key #2 - Downsize Medicare/Medicaid from 3rd party payer to issuing credentials to qualified participants and auditing caregivers for fraud.

Nice going, Rod!

2011-11-20T18:14:37.682-05:00

Nice going, Rod!

Go right ahead, Jim, just please post the link her...

2011-11-20T01:57:39.888-05:00

Go right ahead, Jim, just please post the link here. This is just a hasty comment, but I was thinking of editing and reposting in a day or two it as its own post.

Very well written. I will post this on our website...

2011-11-19T21:44:04.612-05:00

Very well written. I will post this on our website tomorrow if it is ok with you.

Jim Murphy

well done brah!

2011-11-19T18:08:49.300-05:00

well done brah!

Amen! Ever really read The Farm Bill? Farmers get ...

2011-11-19T18:06:46.715-05:00

Amen! Ever really read The Farm Bill? Farmers get paid to destroy crops of fruits and veggies every year with the likes of Round-Up. Subsidies can become perverse pretty quickly.

Despite public media belief that we get a subsidy,...

2011-11-19T11:39:44.688-05:00

Despite public media belief that we get a subsidy, we in fact do not. It goes to petroleum blenders. Most of us look forward to its end January 1, 2012.
The mandate (RFS 2) is a different matter. Without it the transportation fuel monopoly would simply block us from the market. even though our fuel is cheaper and cleaner. It is how the market works.
Sorry about the misuse of term credits. Of course I understood what you meant.

Jim Murphy

Thank you for the kind words. Sometimes when folks...

2011-11-19T11:20:40.508-05:00

Thank you for the kind words. Sometimes when folks are frustrated they get mean. The Obama attempt to try and fix the economy didn't work. So they yell a alot.

Thanks Grover. Ironically, I just spent part of t...

2011-11-19T11:18:59.843-05:00

Thanks Grover. Ironically, I just spent part of this evening defending your good name in exception of some very unkind remarks about you. You really seem to have irked a few liberals, and their reaction is sadly visceral and personal.

Great!

2011-11-19T11:17:35.321-05:00

Great!

That's great, Rod, I am glad that your ideas a...

2011-11-19T11:15:27.180-05:00

That's great, Rod, I am glad that your ideas are getting some exposure.

Congratulations, Rod! Very solid. And if you wi...

2011-11-19T11:14:35.765-05:00

Congratulations, Rod! Very solid.
And if you wish for an editor...

Thanks Jim! Of course, what I am talking about is...

2011-11-19T11:09:53.481-05:00

Thanks Jim! Of course, what I am talking about is not credits, but tax cuts on revenues and income, capital gains and estate taxes for green energy holdings. How would your business fare, Jim, if you had these incentives instead of the subsidies and mandates in place now?

As an owner of a 50 million gallon corn ethanol pl...

2011-11-19T10:32:31.076-05:00

As an owner of a 50 million gallon corn ethanol plant in Michigan I want to applaude you on this piece. These types of credits would bring a great deal of risk capital into new renewable projects. Congrats on the NY Times picking up your thoughts.

Jim Murphy
Chairman
Carbon Green BioEnergy

Good post!

2011-11-14T15:30:38.915-05:00

Good post!

(Continued...) But there is another, even more im...

2011-11-14T15:28:24.914-05:00

(Continued...)

But there is another, even more important reason: It can help heal the left/right schism in America. It is a win-win solution that both lowers taxes, replaces costly subsidies, taxes and regulations, and combines both environmental and libertarian concerns. And sets the stage for more of same.

For the right, it is a great way to teach the left to love supply side tax cuts. The left and much of the political center believe, erroneously, that supply side tax cuts are a boondoggle. Think of this then as a much needed demonstration project showcasing the power of such tax cuts to foster investment and successful, profitable innovation in an area near and dear to the heart of the left. It could help set the stage for across the board supply side tax cuts. The big win for the right here is a possible thaw in the left's perception of supply side tax cuts as a result of this policy, and a willingness to replace costly, damaging big government approaches with approaches similar to this.

For the left, the promise of supply side tax cuts it is a great way to garner support from the right for environmental and alternative energy concerns. The big win for the left here is that left's abiding humanitarian concerns may become more palatable to the right if presented in a manner that reduces taxes, subsidies and regulations, allowing for further alliances in other areas following this model, such as health care.

For America, the ultimate big win of adopting solutions like this would be the restoration of something similar to the 18th-19th C. Liberal consensus, that combined a passion for freedom and free markets, with a powerful appeal to justice, rights, equality and humanity. That 19th C. consensus has largely fractured into two sets of concerns, claimed respectively by the the right and left of today. Restoring that consensus would mean smaller government, lower taxes, cheaper, more efficient environmental and humanitarian policies, greater prosperity.

I see supply side tax cuts for green energy as leading to (a) competitive alternative energy companies that can stand alone; (b) broad supply side tax cuts for the whole economy. I expect, as profitable alternative energy companies emerge, tax preferences will be reduced. I don't see any great argument for special tax breaks for fossil fuels, do you?

Excellent question, Roger! There are several go...

2011-11-14T15:28:04.712-05:00

Excellent question, Roger!

There are several good reasons to support supply side tax cuts for clean, renewable energy, and different reasons depending on your political orientation, I might add.

For instance, Milton Friedman once said "I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible." There are plenty of other arguments I could make about putting downward pressure on energy prices, etc. But this one should be the clincher for Friedman fans: it is a TAX CUT. As such, the net benefit to the economy from cutting taxes will be positive. Forget global warming, forget foreign oil dependency. If, as many free market scholars argue, cutting taxes is the best thing to do right now for the economy, then cutting some taxes is the next best thing. You do what you can.

However, if you are asking "why promote clean, renewable energy preferentially?", there are a lot of folks, left and right, who have made the point, more knowledgeably than I can, that it is critical to avoid the negative externalities of fossil fuels: global warming, economic and strategic vulnerability (and hard costs) arising from oil dependency, national security considerations, many sorts of pollution, depletion of finite resources, etc. Some of these folks may even be our neo-con friends, like Daniel Pipes and Frank Gaffney (http://www.setamericafree.org/openletter.htm). I am not trying to judge, promote or add to those arguments, other than to say that they are serious, and the consequences of dismissing these concerns, if wrong, could be bad. Prudence dictates that if something can be done to promote alternative energy and lessen the social costs and risks of fossil fuels, if it would do more good than harm, then it would be better to do it.

If you are asking "why specifically supply side tax cuts for green energy?", the answer is that, if it seems something must be done, supply side tax cuts are the least harmful, most beneficial of all possible incentives for green energy. Indeed, per Uncle Milton, it would probably be a net positive for the economy as a whole, by lowering the overall tax burden. Therefor, if the political majority of the US has decided to promote alternative energy for whatever reason (as seems to be the case) this is the best way to do so. For those who wish to promote alternative energy, it is the only way to promote success, not failure. For those who do NOT wish to promote alternative energy, it is the best middle ground compromise that is (a) cheaper and better for the economy that any of the alternatives (carbon taxes, direct subsidies, increased regulation and mandates), and (b) sure to not waste money on failures, sure to only benefit the most successful, profitable alternative energy business models. Further, unlike direct subsidy, it is the only kind of incentive that will not create corporate subsidy addicts, that can be scaled back in a reasonable time frame without killing to the economy or the industry.

(Cotinued...)

Great post, Rod! But why give them a tax break th...

2011-11-14T15:20:30.996-05:00

Great post, Rod! But why give them a tax break that others don't get? Are you saying they should get an investment tax break that Big Oil don't get?

"The Gentleman Turtle Farmer" has a grea...

2009-08-07T14:43:48.094-04:00

"The Gentleman Turtle Farmer" has a great ring for a book or movie title! Hope your talk went well!

This green energy tax cuts will favour the total i...

2009-07-17T23:40:31.264-04:00

This green energy tax cuts will favour the total industry.

Hi Randolph, thanks for that interesting post. You...

2009-07-14T04:15:44.694-04:00

Hi Randolph, thanks for that interesting post. You have given a fairly detailed account of the pros and cons of each side’s view. Its very nice to see the problem from different angles and understand each issue from each person’s view point and perspective. I guess the differences between these sides are not going to be resolved anytime soon now.

Interesting view points!
Joost Hoogstrate

You are right about Alan Reynold's sin. Advoca...

2009-07-09T09:37:22.409-04:00

You are right about Alan Reynold's sin. Advocating a gas tax instead--in this environment surely--will lead to a gas tax in addition.

This whole economic argument is pointless. Almost ...

2009-02-28T17:10:00.000-05:00

This whole economic argument is pointless. Almost all the technology jobs went overseas and is probably not coming back because the same corporations that laid off these tech workers own the technology that the same tech worker helped create, except some one overseas benefits from the US workers efforts. People like me will stop innovating if there is no long term job incentive. Why should I spend more of my brain power innovating something I know will go to benefit some one else in some other land where we don't get the benefits of profit from such inventions / trade secrets.

The horse has left the barn and for everyone either having a job or otherwise to tighten your belt because this economic downturn is not the old depression. This downturn is because of major corporations moving their centers of operation overseas. No new jobs can be created in these industries because these same corporations also own the technology that goes into the manufactured or end product.

The only sane thing that the US gov can do to stimulate the economy is to revert the patent rights to the original inventors. Thus such inventors can start their own enterprises and make us in the US self sufficient in that aspect of technology.

Of course such a thing will never happen because of corporate lobbyng.

Keynesian theory predicts spending multipliers wil...

2009-02-11T12:43:00.000-05:00

Keynesian theory predicts spending multipliers will be higher than tax multipliers, but that is not borne out by what empirical data we have. That seems to be a flaw in the theory.