Thursday, April 5, 2012

Tax Incentives and Energy by Matthew Schnackenberg

                Here in Florida a bill numbered HR 7117 is currently sitting on Gov. Rick Scott's desk. The bill is to provide tax incentives for companies and farmers in Florida to build renewable energy plants.  As a libertarian I do take issue to the idea of handing out money to any company as a subsidy or tax break. You want to do business within our state; you pay taxes like the rest of the companies in the state.

                Tax incentives for energy of any kind are not new. According to the firm Earth Track, the US federal government gives incentives to oil, coal, and nuclear companies ranging for an absurd $41 billion to much lower yet still unnecessary $6 billion. Compare this to the incentives of all renewable sources - which include wind, solar, hydro, and other sources - receive a modest $6 billion combined.  These numbers also do not include state and local subsidies.

                Now, I believe all incentives need to end completely, but unlike the wishes of those following the libertarian philosophy of limited government and free-market economies, there is no way this will happen anytime soon. As many people know, many Democrats will never back off their pushes for green energy subsidies as long as there are fossil fuel subsidies, and many Republicans tend to be knee deep in oil lobbyists' pockets so we will never see a push from their side to end oil subsidies.

                As a libertarian myself, I will be overjoyed if HR 7117 is vetoed as it will save taxpayers more of their hard-earned money. Of course, I never like to simply view situations like this from one prospective. A person can never truly be able to judge how things might play out if you hide yourself inside your philosophy and never look from the prospective of those affected by this bill.

                With the massive incentives stated above for oil and nuclear resources, there is an obvious display of favoritism when it comes to which resource our elected officials have chosen for us to use. This creates unbalance within the energy market and tilts it unfairly towards a select few energy sources artificially priced lower. This reduced competition and removed the consumer from the marketplace. 

                The most logical solution is of course the one that cannot currently happen; which is ending all subsidies so that the free-market decides which energy sources become the more prominent in society. This would allow for the most unsafe and costly sources of energy to either be revised to become more efficient or disappear from the market completely.

                Ultimately, the only solutions left is either allow the continued disparity in the energy market continued by favoritism caused by both the state and federal government or allow the state to at least allow a bit more balance to the energy market within the state of Florida. This is a very tough call to make as the taxpayers have already lost no matter which way Gov. Rick Scott goes. 

                While I personally dislike Rick Scott for his shady operation as governor of this state, I think I am willing to support his decision no matter which way he goes with this bill. Vetoing the bill eliminates additional taxpayer burdens, but does not allow for a fairer marketplace within our state that could easily create some much-needed jobs. Signing the bill into law will create more opportunities for job creation with new businesses opening, current businesses expanding operations, and more consumer choice, but at the cost of increased tax-burdens on the people. Both are fairly equal when weighing the positives and negatives revolving around this bill.

                From a libertarian's prospective, increased taxation is increased theft, but I have also seen how the government is already creating a huge disproportioned mess that disallows fair competition. Taxpayers are already burdened by the debt created by pre-existing subsidies that are bound to rise as oil prices raise due the dying Federal Reserve note aka the dollar. We should support a fairer market until we can eliminate all subsidies whether it is by slowly removing them one by one starting with the most burdensome or removing all federal subsidies at once by the elimination of the DOE. We should never support the government giving a wad of money to one market of companies and ignoring their competition. 

                History dictates that any internal improvement project and tax incentives at any level of government tend to end in dismal failure leading to massive debt. Sadly, we are at the age were internal improvements and tax incentives are everywhere. As libertarians and like-minded constitutionalists, we have a duty to be shepherds to lead this nation back to its roots. Along the way, we will have hard decisions to make, like supporting or disapproving bills like HR 7117. Our overall goal is a society and market free from government influence. As we battle towards our goal, we should consider ways to temporarily balance areas of the market until we can remove government completely. For Florida's energy market, HR 7117 could be that temporary answer until we can eliminate federal overreach.

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