Last week the Congress, presumably unintentionally, did something right. It allowed the subsidies for ethanol and one of the several subsidies for electric vehicle to lapse. I agree with the editors of the Washington Post. Those subsidies should be consigned to the dustbin of history:
THERE MAY NOT have been a party in Times Square to celebrate, but two of the most wasteful subsidies ever to clutter the Internal Revenue Code went out with the old year. Congress declined to renew either the 45-cent-per-gallon tax credit for corn-based ethanol or the 54-cent-per-gallon tariff on imported ethanol, so both expired Dec. 31.
Taxpayers will no longer have shell out roughly $6 billion per year for a program that badly distorted the global grain market, artificially raised the cost of agricultural land and did almost nothing to curb greenhouse gas emissions. A federal law requiring the use of 36 billion gallons of ethanol for fuel by 2022 still props up the industry, but the tax credit’s expiration is a victory for common sense just the same.
Meanwhile, a lesser-known but equally dubious energy tax break also expired when the year ended Saturday: the credit that gave electric-car owners up to $1,000 to defray the cost of installing a 220-volt charging device in their homes — or up to $30,000 to install one in a commercial location. As a means of reducing carbon emissions, electric cars and plug-in hybrid electrics are no more cost-effective than ethanol. What’s more, only upper-income consumers can afford to buy an electric vehicle (EV); so the charger subsidy is a giveaway to the well-to-do.
There are any number of other agricultural and “green energy” subsidies that can and should be abandoned for fiscal, economic, and policy reasons. Unfortunately, I strongly suspect that the new year will see the Congress doubling down on its errors, eager to make new ones in the coming year. They will undoubtedly be abetted in this by an army of lobbyists whose clients are desperate that the mistakes of the past burden us for the indefinite future.
Did those subsidies only die because Congress can’t find its ass with both hands, despite that’s where its head is? If so, I agree with Dave that we can expect those subsidies to be back in force before long.