De-fund Ethanol, Get Funds from Renewables
Use Tax Dollars for Public Media? For Oil? For ...
| If you accept the notion of politicians spending our money for us, then you must argue that your own subsidies shine while the other fellow’s stink. Is there a better way, more geonomic? We trim, blend, and append three 2010 articles, two from issues of The WasteBasket: A Bulletin on Wasteful Government Spending by Taxpayers for Common Sense, one July 16, on ethanol, and the other July 9, on renewable royalties, and one from Ars, May 20, on spectrum rent by Matthew Lasar. |
by Taxpayers for Common Sense and by Matthew Lasar
- Last Call for Ethanol
Like alchemy of old, the idea of turning corn into fuel is an attractive one -- a renewable, domestic, more efficient fuel. To promote the use of ethanol, Congress gives fuel blenders -- generally the big oil companies -- a 45 cents per gallon tax credit. That costs more than $5 billion per year.
After more than 30 years of subsidies, it's well past time for the ethanol industry to grow up and make its own way in the marketplace.
- Don’t Melt on Renewable Royalties
As the Administration starts to process a backlog of renewable energy applications going back years, taxpayers can end up effectively handing out billions in corporate subsidies when government fails to ensure we receive the fair market value for commercial development of public lands. Some examples:
The 1995 Deep Water Royalty Relief Act provides royalty "relief" for certain drilling leases in the Gulf of Mexico. At the time the law was passed, oil and gas prices were only $18/barrel. With oil prices hovering near $80/barrel, DWRRA has become one of the biggest subsidies the oil and gas industries receive, costing taxpayers as much as $50 billion in lost revenue over the next 25 years.
Under the General Mining Law of 1872, unchanged for nearly 140 years, billions of dollars of gold, uranium, silver, and copper are taken -- royalty-free -- from public lands each year. The 1872 law also saddles taxpayers with the hefty clean-up costs of mining operations. Estimated cost to taxpayers: upwards of $50 billion.
The Federal Land Policy and Management Act requires BLM to collect an annual rental payment for right-of-way (ROW) authorizations on public lands. ROW authorizations, however, are traditionally used by BLM to locate power lines, pipelines, and communications towers and lines on federal land. But unlike communication facilities, the federal land to be used for wind and solar power generation provides critical resource inputs that have additional value far in excess of basic rental fees charged for occupying the land.
The most responsible way to foster private commercial development of wind and solar power generation on public land is to implement a system that competitively leases these inputs. Congress must establish a competitive leasing system and give the BLM the authority to charge royalties for wind and solar development that will adequately compensate taxpayers.
JJS: From harnessing energy sources to riding energy waves, let’s keep politicians from distorting people’s choices.
- Should Uncle Sam save public media with huge cash infusion?
While radio's overall audience is declining, National Public Radio is one of the most popular broadcasts on the FM dial (not to mention on your laptop and iPhone), with listening up at 20.9 million per week in 2009. That's a pretty fair accomplishment considering that the United States dishes out 1.43 public broadcasting dollars per capita, in contrast to Denmark and Finland, which annually allocate 70 and 80 times that sum.
Free Press, an activist organization, wants funding for public TV and radio stations to come from more predictable and less political sources than biennial Congressional allocation.
The first of these would be a license "spectrum usage fee" on broadcasters. Free Press says, "They should pay rent for the spectrum they use."
Another is spectrum auction revenue -- taking a cut of the money that the Federal Communications Commission raises from its spectrum sales. This would have been a sweet deal for public stations had it been in effect in 2008, when the Commission raised over $19.5 billion after selling off the 700MHz band. Alas, now most of the spectrum has been sold.
Yet another is a tax on advertising revenue, which Free Press "conservatively" estimates at $190 billion in 2010. Yet ad revenue has dramatically declined over the last few years.
One more idea is to reduce the tax deduction that businesses can take on advertising expenses (100% at present; advertising is considered “education”) and siphon the treasury revenue gained to public media.
Finally, there's a BBC-style approach -- a tax on consumer electronics devices.
Uncle Sam hasn been involved in the media sector over the last two centuries -- creating a nationalized postal system with cheap distribution rates for newspapers, a copyright system that (originally) facilitated publishing by putting lots of content in the public domain, and setting up libel laws that protect newspapers from big brother. Commercial broadcasters today receive a huge government subsidy -- their "must carry" right to be streamed on cable systems, worth billions.
Bottom line: one-third of journalism jobs have disappeared over the last decade. Newsweek, now up for sale, is the latest poster kid for the crisis. Where is the funding for journalism going to come from? The Internet advertising model? Cable TV talk shows? Where?
JJS: While government should recover all rents in favor of the citizenry, should politicians decide how to spend it -- even for a good cause -- or should citizens? And can politicians best define a good cause? What if they decide to fund me, who is less objective, and not fund you, who is more objective? If government instead paid the recovered rent out as a dividend to citizens, people would feel more materially secure and more willing to support a favorite radio station. Perhaps this geonomic route would work best for both announcers and listeners.
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Editor Jeffery J. Smith runs the Forum on Geonomics.
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Also see: Why Pay the Privileged our Public Money?
Who gets compensated? Who gets deceived?
The new social surplus will get this done |
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