“Some might argue that some existing preferences increase energy production and thus, contribute to lower energy prices. Yet many of the preferences at issue have little or no impact on energy production; they simply represent wealth transfers.
Those preferences that do reduce energy production costs simply encourage market actors to produce costly, economically uncompetitive energy. Markets are not made more efficient by producing costly relative to less costly energy.”
Earlier this year, Jerry Taylor and Peter Van Doren of the Cato Institute wrote a tax policy missive to the Energy Tax Reform Working Group of the House Ways and Means Committee. This committee, chaired by Kevin Brady (R-Texas), is one of eleven such working groups chaired by Dave Camp (R-MI) and Ranking Member Sandy Levin (D-MI).
Taylor and Van Doren espouse cleaning out the tax code to allow a more neutral tax structure to determine the production and consumption of competing energies.…
“The infant industry argument is a smoke screen. The so-called infants never grow up.”
– Milton and Rose Friedman, Free to Choose (Harcourt Brace Jovanovich, 1979), p. 5.
The 20-year-old production tax credit (PTC) has not done its work yet, claims the American Wind Energy Association (AWEA). It should be extended …. and extended … and extended.
The credit, now worth about 2.2 cents per kWh, or 40 percent or more of the wholesale average price of power, was first enacted in the Energy Policy Act of 1992, and has been extended six times, sometimes retroactively to cover the entire period without lapse.
What are the key facts regarding this subsidy to qualifying renewable energies, primarily electricity generated from wind and solar? This summary by the Institute for Energy Research (of which I am CEO) provides much good information for the ongoing debate given that the PTC is set to expire at the end of this year.…