House Democrats appear ready to pass a bill that would raise $21 billion in taxes, mainly from oil companies, and impose a new mandate for utilities to use renewable fuelsOut come the carrots and sticks to beat and tempt American energy firms into doing something the market has yet to reward. Like that's going to work. $21B is exactly what percentage of the gross income of, say, Exxon? Let's see here, according to Exxon's annual earnings statement, they had a gross income of about $366B last year. The $21B is spread over 10 years, so if applied only to Exxon, it amounts to about a 0.6% charge on them.
But wait, there's more! There's also "a mandate that utilities get 15% of their electricity from renewable sources such as solar power." And the reason the market hasn't yet led us to that state of affairs is...what? Maybe something like it doesn't pay to do it?
So what will we do with the tax money?
The money would be shifted to extend investment-tax credits for solar energy and fuel cells. It also would be used to finance renewable energy bonds, to help new companies market new forms of cleaner energy.So let me see if I get this right. We're going to pay companies to tell us that they've got electricity for sale and it comes from clean sources? Why does anyone think that marketing such a product is so difficult it needs government intervention?
If you ever wonder why your income tax forms are so complicated, look at news stories like this one. The government is constantly trying to poke and prod the market into doing things it doesn't want to do with only the tiniest of sticks and carrots. We've been doing this kind of thing for decades and we still use oil and gas because it makes economic sense. All we've managed to do is make our tax code bloated and annoying.
What a waste of time.
Update: Leslie Carbone has a different angle on the story with the same result.
Local Warming has a different take, with which I agree partially. I have no problems repealing subsidies, but the tax credits for renewables don't work for me.