Energy & Environment

Why the wind energy tax credit must go

Why the wind energy tax credit must go

Dusty Springfield sang a great pop song in the late 1960s about “the windmills of your mind.” As I see our government throw hard-earned tax dollars into wind power, chasing an energy source that is one of the most expensive and least efficient forms of energy, I think about that song. Does wind energy have any real viability, or is it just a mirage in our minds?

Over the past 20 years, the federal government has spent more than $20 billion on a tax credit for wind producers. Today wind accounts for less than one percent of our nation’s energy. Wind proponents keep saying that subsidies are needed for only a little while longer; that true independence from taxpayer handouts is just around the corner. But no one can point to a tangible plan or timeline for weaning the wind industry from the federal treasury.

The dirty little secret is that even if the current wind production tax credit ends on Dec. 31, projects already in the pipeline will enjoy another 10 years of subsidies.

President Barack Obama likes to point out that wind energy production has doubled in the past three years as proof that his energy policies are working. What he doesn’t tell you is that he has increased federal subsidies to wind energy ten-fold during that same period. This year’s subsidy amounts to $1.6 billion.

Costly investment

Compared with federal subsidies for other forms of energy, wind is a costly investment. For every megawatt hour of wind energy generated, the taxpayer paid $56, compared to 64 cents for coal-fired and natural gas-fired generation, according to a recent analysis by the American Energy Alliance. As pointed out in a recent Wall Street Journal editorial, these subsidy comparisons don’t even consider that the coal, oil, and natural gas industries paid more than $10 billion of taxes in 2009, while wind and solar are net drains on the Treasury.

Propping up wind energy is costly for consumers as well. Many states now mandate that public utility companies get a certain amount of their energy from renewable sources. Because renewable sources such as wind and solar are inherently less efficient, they cost more to produce. That extra cost is passed on to ratepayers in their monthly utility bills. At a time of high unemployment and high gasoline prices, America’s struggling families and small businesses simply cannot afford to pay more for their utilities.

If we were to reform the federal tax code to eliminate the loopholes, carve-outs and subsidies and create a fairer, flatter tax system, this would prevent the government from picking winners and losers. The U.S. now has the highest corporate tax rate of any industrialized country. Bringing our rate down from 35 percent to about 25 percent would do more to create jobs in the economy than just about anything else we could do.

Like Republican presidential nominee Mitt Romney,  I believe it’s time for a new approach to ensure America’s energy security. Romney would allow the wind production tax credit to expire, end the stimulus boondoggles, and create an economy in which all energy sources compete on their merits. Wind energy will thrive wherever it is economically competitive, and wherever private sector investors believe it will bring a good return on their investment dollars.

To be clear, my Republican colleagues and I in the House support wind and other alternative energies that are not drains on the budget. In fact, we passed my bill, Streamlining Permitting of American Energy Act of 2012 (H.R. 4383) in the House earlier this year as part of a larger energy bill aimed at making it easier to access wind energy on federal lands. I have also cosponsored the Cutting Red Tape to Facilitate Renewable Energy Act (H.R. 2170) to help speed up the permitting process for renewable energy.

We cannot continue throwing money into the wind chasing an inefficient energy source. If wind power hasn’t been able to stand on its own by now, it almost certainly never will. It is time to cut the taxpayer umbilical cord. Above all, we must have a new energy plan and a fairer tax plan that will create jobs and restore our economy. For that we need a new leader in the White House, not a president who succumbs to fantasies.

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  • Alan Ford

    It never ceases to amaze me how these politicians have become increasingly adept at “cherry picking” their details with convenient “omissions” where such details would hurt their cause.
    From Lambourn, no mention of the fact that big oil and gas have been receiving, and continue to receive large subsidies they no longer need but are safely locked in under ongoing budgets. Conveniently overlooking that the supposed top rate corporation tax is so riddled with loopholes that the number is practically meaningless.
    If tax cuts for the rich increase jobs and bank de-regulation increases finance availability. Please explain to me how Bush inherited a surplus, the number of millionaires and billionaires skyrocketed and he handed to Obama an already massive deficit, already cascading job losses and an economy on the brink of disaster ??

  • 1tomritter1

    The GOP could ban all wind subsidies if they wanted. They control the House.

  • http://www.facebook.com/DrMWolf Michael Wolf

    - “big oil”

    - “Tax cuts for the rich”

    - A moronic paragaraph that amounted to more of the consummately fatigued and overused meme of “Bush’s fault”

    If you want to propagate further economic and political idiocy, can’t you ignorant, useful idiots at least generate your own destructive abject stupidity , instead of constantly shoveling the same boilerplate propaganda dished out by your Commie, class warfare architects.

  • 1970greenie

    “my Republican colleagues and I in the House support wind and other alternative energies that are not drains on the budget”…
    So this representative just got through telling us wind power is nonsense, nine times more expensive than coal, THEN tells us he supports, what, wind that is not an economic drain, which means what exactly? It means we have another rino, just like Kristi Noem: ” We support wind in our state!”.

  • justinwachin

    Solar and wind energy are going to need some breakthroughs to become competitive. Although this will come as a surprise to the Obama administration, you can’t legislate creativity or inventiveness.

  • Not A Tea Bagger!!

    Crismahn;
    IF, as you allude, YOU are Paying 35% in Taxes, then you must be “earning” several BILLION Dollars Per Year (based on Romney’s 14% tax on his paltry 250 Million Dollar “UNEARNED” Income for 2011)..
    What the hell do you do to “earn” that much money??
    Frankly speaking, you OUGHT to be paying the Reagan Tax Rate of 90%!!
    I pay Quarterly Taxes to the tune of 25%, but when I “file” my annual income tax rate is actually 15% and I made a bit less than 1/2500 of what Romney made in 2011!!! (screwed-up tax system!).
    That said, to correct your “facts”.. MORE Jobs have been created in the post WWII Era when the Tax Rate for the wealthiest 5% of Americans was in the neighborhood of 90%.. Check-out the Forbes top 400 wealthiest Americans.. The “poorest” of the lot (#400) ONLY made $2.8 BILLION DOLLARS!! THOSE people NEED to be taxed at a helluva lot higher rate than the same fifteen percent I pay!! Where in the hell are the jobs from these low taxed “job creators”???

  • Not A Tea Bagger!!

    David Taylor;
    But it’s okay to pay subsidies to BIG OIL Companies who are making Billions in Record QUARTERLY Profits??? I suppose you are willing to have the American Taxpayer pick-up the tab for the Keystone Pipeline that will
    ship ALL the oil from the Canadian Tar Sands to Galveston, Texas so it can be loaded onto tankers and taken to China.. Let the Canadians and BIG OIL build their own SHORTER pipeline across Canada to the Pacific Northwest!!

  • Not A Tea Bagger!!

    Michael Wolf;
    Hear, Hear.. QUIT Spouting that trite Republican Diatribe about how lower tax rates will increase jobs (they didn’t during the entire duration of the BUSH TAX CUTS!!) We need to listen to McCain and “Bomb, Bomb Iran”.. We need another war to stimulate the (war industry) economy.. After all, look at ALL the money we made during the LBJ/Nixon era Viet-Nam “war”.. And it only “COST” 58,000 American Lives.. The Iraq/Afghanistan “wars”, while a drain on the US Treasury really didn’t help the “home” economy.. After all, undertakers just did not make their fair share of the EIGHT TRILLION DOLLARS spent on those Bush Wars.. Wait, those two wars were TOTALLY UNFUNDED, but the Repugnuts didn’t complain… How can that be??? I’ll tell you… “BOILERPLATE PROPAGANDA”!!!
    You know, I got an ass-full of being called a “Commie” by you red-neck, right-wing fundamentalist bastards back in the ’60′s.. Since you probably don’t know what the hell a “Commie” is, Take Karl Marx’s Communist Manifesto, Read It, Then STICK IT UP YOUR ASS!!!!

  • Not A Tea Bagger!!

    2Angilico;
    You need to do a BETTER Internet Search.. BIG OIL Does, Indeed, get U.S. Federal Subsidies as WELL as “Tax Incentives”.. We, the Taxpayer, PAY TWICE!!