Throughout the 2020 presidential campaign season, then-candidate Biden continually promised that he would not raise taxes on households making less than $400,000 per year. It was a promise echoed again by the White House just over a month ago, but the so-called American Jobs infrastructure plan rolled out by the administration pulls a bait-and-switch on the American people, particularly the working poor and ethnically diverse communities.
A key component of the Biden plan is the push for a nationwide transition to electric vehicles, which takes up some $174 billion in subsidies from the package, but one of the largest problems with the proposal is its disregard for the negative downwind effects it would have on those at the lower rungs of the economic ladder. As of 2019, the average cost of an electric vehicle was $55,600, far greater than the cost of other vehicles more affordable for lower income families. In fact, another recent study showed that the average income of electric car owners is at least $100,000 per year, well over even the middle-income line. While the Biden plan throws truckloads of money at other angles of the electric vehicle issue, it does nothing to address the fact that lower income households simply cannot afford electric vehicles. To make matters worse, electric vehicles only account for 2 percent of vehicle sales in the U.S., even though they have been an option for vehicle purchasers for a significant period of time. The Biden plan is catering to a niche segment of an industry, in a show of political nepotism for a pet campaign promise while slapping the American worker in the face in the process.
An aggressive plan like Biden’s calls for significant bumps in energy and electric grids. Even currently, with a transportation budget of $1.5 billion, electric companies have almost $1 billion more in requests for expansion, and this is the case notwithstanding the drastic increase in energy grids that the Biden plan would implement. More electric grids cost the utilities more to operate, meaning large spikes in utility costs.
California provides an example of this type of policy gone wrong, as it invests the most of any state into electric vehicle infrastructure yet has increasing issues with blackouts, high utility costs, and general cost-of-living increases. For instance, as of 2010, SDG&E, the major energy provider in the San Diego and southern California region, has seen consistent rate increases. Conversely, utility disconnections due to overdue bills and payments has also steadily climbed within this time period, suggesting that ratepayers are finding it more difficult to keep up with rising costs. Even more specifically, those burdened with these rate hikes are disproportionately minority groups in disadvantaged communities, who shoulder these costs for the benefit of disproportionately affluent areas that can afford EV’s.
Additionally, American seniors are keenly affected by these rate hikes. Per an AARP testimony in 2019 in Arizona, “twenty percent of Arizonans 65 and older rely on Social Security as their sole income source. Fifty percent get a substantial portion of their income from Social Security…[which] is about $17,500/year…Older Arizonans have much higher medical costs so many already [are forced] to choose today between, food, rent, medical care and very limited transportation…they cannot afford higher electric utility rates much less for electric vehicles.” Yet again, ratepayers are being conscripted to subsidize a service that they do not use, at the cost of their own well-being.
These specific examples are simply the tip of the iceberg. If the Biden E.V. plan is implemented, the consequences would be far more drastic than even the current rate hikes. If less fortunate groups are not benefiting from electric vehicles, why should they be forced to pay for them? Spiked electric utilities affect the poor and vulnerable more negatively than any other economic demographic. Utilities are a difficult commodity to live without, particularly within a family, and they should not be burdened with rate hikes for services they do not use. Simply put, lower income households are not driving electric vehicles, and the Biden plan not only gives them no incentive or ability to do so but punishes them for costs incurred by wealthier households, all while claiming victory because rate hikes caused by government action aren’t technically a tax. Tax or not, the cost to the American people is the same. The ploy is a cruel bait-and-switch tactic that misleads the American people and should raise red flags about the Biden administration’s friendliness to the American worker.
The good times are back. The U.S. economy is performing at levels not seen in more than a decade, with unemployment at its lowest level in a lifetime.
Still, it wasn’t all that long ago when crude was selling for more than $100 a barrel and people were talking seriously about the problem of “peak oil.” The growing global demand for energy made from fossil fuels has U.S. policymakers pushing hard for subsidies intended to accelerate the development and commercialization of energy alternatives mace from agricultural products and coming from the wind and the sun.
The American faith in technology is almost never misplaced. The fracking revolution has turned the U.S. into a net energy exporter. The explosion in the use of natural gas and the development of microgrids powered by it in liquid form have made cheap power a reality once again, without the widespread adoption of renewables. Policymakers, though, have yet to come to grips with the reality and are, under pressure from special interests, trying to keep Bush/Obama-era energy policies in place that do more harm than good.
In 2005, the U.S. Congress adopted the Solar Investment Tax Credit with an eye to speeding the commercial adoption of energy from the sun as a way to heat and cool the nation’s homes and businesses. Whether it helped or not is debatable yet there are calls, even now, to ensure its renewal past its intended expiration at the end of the year.
The renewable lobby is politically powerful, especially given the nexus between those invested in and those who make generous contributions to elected officials. Remember Solyndra? And yet, despite its spectacular failure – which left taxpayers on the hook for who really knows how much – the ITC was already reauthorized in 2015 for solar PV, solar water heating, solar space heating and cooling, and solar process heat.
Right now, under current law, the industry is set to benefit from a 30 percent tax credit extended to consumers who purchase systems used in both residential and commercial properties that are under construction before 2020. Beginning in 2022 the credit decreases, dropping to 10 percent and useful only in commercial settings.
That’s what policymakers agreed to in 2015 to mollify the demands of the green groups who still believe, or at least claim they do, that the nation’s base power needs can be met by renewables without utilizing either nuclear or fossil fuels.
Science tells us that is a pipe dream and will remain one until the technology to store the energy generated by solar fields over the medium term (never mind the long) exists. Battery technology has not yet caught up to the increases the solar and wind energy industries have managed to achieve, meaning lots of generated power is left stranded and unused.
Nonetheless, the demand for another increase in the ITC as well as an expansion of what is covered is being pressed on legislators. The last extension was part of the deal that allowed for the U.S. to enter the crude export market which, while bad policy, makes it worth the price paid.
There are no such opportunities for a similar trade on the table now. The greens will never drop their opposition to energy exploration in the Arctic National Wildlife or the construction of new pipelines to move crude and natural gas produced by fracking to market. And since there’s no opportunity to trade for good policy, the ITC should be allowed to expire, especially since there’s plenty of evidence it’s no longer needed.
Solar, the web site GreenTechMedia reports, “will soon be able to out-compete gas-fired plants around the world on a levelized cost basis.” Large investments from foreign-based solar module manufacturing companies such as Hanwha Q Cells have led to the opening of manufacturing facilities in the United States. And solar energy experienced explosive growth between 2010 and 2016.
According to GTM Research, annual installations grew from just 849 MW in 2010, to more than 15,000 MW in 2016, a record-breaking year when the U.S. solar market nearly doubled its annual record for installations – while tax incentives are factored into the growth, efficiency and affordability have driven the adoption of the technology.
If the ITC worked as intended, as there’s evidence to suggest it did, it’s not needed anymore. And if it didn’t work as those who voted for and voted to extend it planned, it’s also not needed anymore. Either way, it’s time for it to be allowed to expire, if for no other reason than to show members of Congress they can allow special interest tax breaks to disappear and survive when they run for re-election.
by Ali Meyer • Washington Free Beacon
Subsidies for health insurance purchased through the marketplaces established under the Affordable Care Act are projected to more than double over the next decade, according to a report from the Congressional Budget Office.
The report, which evaluated spending for various means-tested programs or programs that offer benefits to those who earn income under a certain threshold, found that spending on Obamacare subsidies will total $42 billion in 2017 and are estimated to more than double to $97 billion by 2027.
In fiscal year 2016, payments for subsidies totaled $31 billion and, according to the budget office, payments will grow rapidly in 2017 and 2018 largely due to the growth in enrollment. Continue reading
America’s declining score in the index is closely related to rapidly rising government spending, subsidies, and bailouts.
by Anthony B. Kim • Daily Signal
According to the 2016 Index of Economic Freedom, an annual publication by The Heritage Foundation, America’s economic freedom has tumbled. With losses of economic freedom in eight of the past nine years, the U.S. has tied its worst score ever, wiping out a decade of progress.
The U.S. has fallen from the 6th freest economy in the world, when President Barack Obama took office, to 11th place in 2016. America’s declining score in the index is closely related to rapidly rising government spending, subsidies, and bailouts. Continue reading
by Eric Boehm • Watchdog.org
The IRS fined more than 7.5 million Americans who didn’t have health insurance in 2014, even as Obamacare subsidies flowed to people who didn’t even exist.
The Treasury Department reported last week the number of Americans who faced fines because of the Affordable Care Act’s individual mandate was significantly higher than the Obama administration expected. For 2014, the IRS projected that roughly 6 million would face fines, but the final total was 1.5 million higher.
It was the first year in which buying health insurance was made mandatory under the ACA, with penalties of $95 or 1 percent of total income – whichever was higher – for people who did not comply. Continue reading
Last week, the American Wind Energy Association (AWEA) released its second quarter 2015 U.S. wind energy market report. In a press release, AWEA CEO Tom Kiernan hails the report as indicative of a vibrant wind energy industry: “With a near-record amount of wind capacity under construction, this looks to be a strong year for American wind power.” However, Kiernan quickly changes tone, stating that “…to create longer term stability for the industry the full Senate and the House of Representatives must move quickly to extend the PTC,” or wind Production Tax Credit.
If the wind industry is “strong,” then why does it need subsidies for “stability”? This doublespeak is a favorite tactic of AWEA, who continues to boast about how vibrant the wind industry is while also lobbying for more subsidies that they supposedly need to survive. AWEA and wind advocates can’t have it both ways: if they expect Americans to believe their claims that wind energy is booming, then the industry should give up the PTC and stand on its own two feet. Continue reading
by Tom Steward • Daily Signal
Nothing strikes fear into developers and property owners more than a new critter on the federal list of endangered species.
Case in point: The northern long-eared bat, found in 39 states. The U.S. Fish and Wildlife Service probably will place it on the list in April.
The logging industry is worried.
“The economic loss to the entire state of Michigan would be devastating, if timber harvesting were to be restricted to the winter months in their habitat area,” said Brenda Owen, executive director of the Michigan Association of Timbermen. “This is not a viable solution to the bat’s decline, and it’s never a solution that the Timbermen would stand by and let happen.” Continue reading
by Ernest Istook • Washington Times
Crony capitalism plans are so lucrative for a select few that they are hard to kill. Those who get rich make generous campaign contributions, hire lobbyists and run massive public relations propaganda campaigns, using the billions of our tax dollars that they receive.
One “temporary” measure — the wind-energy production tax credit (PTC) — has received eight “temporary” extensions since 1992 and now backers want to add several years more. After 20 years of soaking taxpayers for billions of dollars in subsidies and raising electric bills, it’s overdue for the PTC to end. It expired at the end of 2013, yet some lawmakers want to give it new life, plus an additional $18 billion, during the postelection lame-duck session of Congress. Continue reading