Wind Power Debate Turns Conservatives Into Liberals
The misguided case against wind power.
How do you make a conservative sound like a liberal? Easy: Just bring up wind power.
For years, progressives have been pressing the country to use more renewable energy, including wind energy. Since liberal support for anything automatically renders it suspect in conservative eyes (and vice versa), conservatives have marshaled a series of arguments as to why that support is misguided.
Some of them are pretty good reasons. For instance: Wind is intermittent, and sometimes—hot days, for instance—the wind stops blowing just when people need power the most. So power companies need backup plants that burn conventional fuels to supply base-load generation. (That's why at least one fellow in the energy industry jokingly calls wind farms "natural-gas farms.") This is not exactly efficient.
Second, wind farms also tend to be pretty rough on birds—though this concern is overstated (domestic cats still kill far more birds every year than wind farms do) and perhaps a trifle disingenuous. One suspects conservatives call wind farms bird Cuisinarts less because they are horrified by the carnage themselves than because they think it will horrify liberals.
Third, there's a good free-market case for treating all energy sources the same—though doing so also would require removing a lot of government supports for traditional power sources such as fossil fuels and nuclear power.
For fossil fuels, those include everything from direct federal expenditures for R&D to tax exemptions for offshore drilling. For nuclear power, they include federal loan guarantees for plant construction and liability caps on claims for damages resulting from accidents. (For a complete overview, look up the Energy Information Administration's reports on federal financial interventions in the energy market.)
Those are all fine arguments. Unfortunately, in their zeal to slaughter a liberal sacred cow, conservatives often make another argument that only hurts their greater cause.
Tennessee Sen. Lamar Alexander trotted it out in a guest column on why "Wind-Power Tax Credits Need to be Blown Away" in The Wall Street Journal the other day. His No. 1 reason: Extending the tax credits "would cost taxpayers nearly $13 billion over the next 10 years."
Alexander is referring to a federal policy that provides a 2.3-cent tax credit for each kilowatt-hour of wind-generated electricity. He notes that "this is more than the federal government spends on energy research in one year. A better use of taxpayer dollars," he continues….
Wait—a better use of taxpayer dollars? What taxpayer dollars?
A tax credit is just that: a credit against the amount a taxpayer owes. As the IRS explains, a tax credit "reduces the amount of tax for which you are liable." That is vastly different from a direct grant, in which the government takes money from Jones and gives it to Smith. In the case of a tax credit, none of Jones' money goes into Smith's pocket. Rather, Smith gets to keep more of his own money. Smith's tax credit doesn't cost Jones a cent.
Yet conservatives often imply otherwise. According to The Heritage Foundation, support for the wind-production tax credit "ignores the multitude of costs Americans incur when handouts are given to special interests. First, there is an actual cost the taxpayers incur. …" Well, no. The "cost" in this case is simply the loss of revenue to the federal treasury. The federal treasury is not a taxpayer.
Then there's National Review: In a December piece on how "'Green' Energy Kills Eagles," Robert Bryce warns that extending the wind production tax credit "will cost taxpayers $6.1 billion." No, it won't. It will deprive the federal government of $6.1 billion, which is a very different proposition.
We've heard this rhetoric before. Those who've been around a while will remember it from debates over the Bush-era tax cuts. As The New York Times put it in 2004, "permanently extending Mr. Bush's tax cuts would cost about $1.7 trillion." Four years later, the Times was back at it: "Extending the Bush tax cuts would cost more than $700 billion in the next five years." Cost? Cost whom? Not the taxpayers, that's for sure.
You hear the same arguments today. When Rep. Paul Ryan rolled out his own budget proposal, the liberal Center for Budget and Policy Priorities warned that his "tax cuts would cost about $5 trillion over 10 years." The Washington Post likewise was aghast to discover that "Ryan's Tax Reforms Cost More Than All His Spending Cuts Combined." How in the world, it wanted to know, would he "pay for" those tax cuts?
Well. To say tax cuts "cost" money, and those "costs" must be "paid for," makes sense only from one perspective: the government's. To the taxpayer, tax cuts don't cost money—they save money. After all, whose money is it in the first place? Saying a tax cut costs money is like saying a sale on merchandise costs money. Not if you're on the consuming end, it doesn't.
Should the wind-production tax credit go away? Absolutely—along with all other disparate treatment for all other energy sources, in the tax code or elsewhere. But let's ditch those preferences for true and genuine reasons—not because taxing Smith less "costs" Jones more.
