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$9 Billion Loophole for Synthetic Fuel
Rondrin writes "CNN has an article detailing a $9 billion loophole in the tax code to spur synthetic fuel development. Unfortunately, spraying coal with pine tar qualifies. From the article: 'The wording is so bland and buried so deep within a 324-page budget document that almost no one would notice that a multibillion-dollar scam is going on. Not the members of Congress voting for it and certainly not the taxpayers who will get fleeced by it. And that is exactly the idea.'"
Does anyone think congress reads any of these bills?
And if something sneaks by, everyone (the public) gets riled up for a few days, and then forgets about it. Short attention spans of the public are great for politicians...
And All I Ask is a Tall Ship And a Star to Steer Her By
Of course nobody knew about it. I can't even file my income taxes without the aid of a computer program and a book. It's the same story with the earmarked discretionary spending in transportation bills. None of the representatives could read the entire bill even if they wanted to, and so "pork" is jammed through and the tax payers are left soaked. The lesson is: if the bill is too complicated for ordinary individuals to understand, it's too complicated period.
The natural progress of things is for liberty to yield and government to gain ground. - Thomas Jefferson
I'm glad this has been found and is being proffered to the public to read.
It is important that the public is aware when this type of thing is smothered in mind-numbing pages of legal pap. If it makes you mad, write your representative/senator. I did.
A Passionate Independent Musician
My diesel automobile could easily run biodiesel refined from old fry grease from the McDonald's down the street if only Uncle Sam would shove Big Oil out of the way and let it be refined. Nevermind that the process could easily be done for under $1.00 a gallon. Nevermind that it doesn't depend at all on the Middle East. Nevermind that it burns cleaner than either regular diesel or gasoline. Bah.
Jesus told him, "I am the way, the truth, and the life. No one can come to the Father except through me. - John 14:6 NLT
Ummm ... US companies have been purchasing Chinese goods for 50 years ... mostly because they can get them much cheaper, than paying dumbass union workers $45/hr to produce the same thing.
... not by a long shot.
Not the fault of the "current administration"
Please buy a (chinese) clue during your next shopping run at Wal-Mart.
Frammin' on the jim-jam, frippin' at the krotz!
FTA: From 2003 through 2005, TIME estimates, the synfuel industry raked in $9 billion in tax credits. That means the lucky few collectively cut their tax bills by that amount, which would be enough to cover a year's worth of federal taxes for 20 million Americans who make less than $20,000 a year and pay income taxes.
So while this tax loophole sucks, it's $3 billion a year not $9 billion. That means it's a year's worth of taxes for 6.6 million people who make 20K, not 20 million.
Although people think of programs like welfare when they hear the term socialism, govt. incentives to help business are the same thing. You can argue that giving incentives to companies to produce technology in areas the US needs to be headed in is a good thing, but don't be surprised when the money is ill spent. Unlike in a corporation, where people are fired for wasting money, in govt. you win elections for getting tax dollars into your district, even if they are being spent on something completely non-productive.
Vote for Pedro
So, why doesn't Congress use a revision control system? When the day comes to vote on a bill, you check for changes since the last time you read it. If there are changes, you know who made them and when. Your basic audit trail.
I suspect that one of the reasons something like this hasn't been implemented yet is that most politicians are habitual defectors rather than cooperators; they may not want their enemies to be able to use dirty tricks, but they'd like to be able to do it themselves.
Ah, besides. Can you imagine Congressional debate on whether to use CVS, svn, or... what am I thinking? Free software wouldn't even be on the table.
Republicans and Democrats alike pledging to crack down on influence peddling,
Riiiight. Pardon my underwhelming response, but I seem to remember a similar effort to "crack down" on campaign finance abuse. Oh wait...that has yet to happen. And this is something else that will also probably never happen. Any elected person worth their weight in salt (literally) knows that exercising care not to bite the hand that fills the campaign trough is far more pressing than more mundane issues - like maintaining a sense of integrity. I'm filing this in the "I'll believe it when I see it" category.
This is not news. This was in Time a few years ago. Apparently there are several Pennsylvania and West Virginia coal mining companies that paid little to no taxes for 5 years by rigging up some tar spraying system over their coal cars.
This is another example of why you cannot rely on the government to "solve" these fuel problems. They end up making bad situations worse. Take the oil crisis of the mid 70's. The government tries to solve the problem by implementing price controls instead of letting market forces take hold and lowering demand. They end up running half the stations out of business for a time and creating huge lines at the ones that do manage to stay open. I'm not a Bush fan, but he should be praised for leaving things alone after Katrina. Gas prices worked themselves out because people became concious of their consumption. Demand fell, prices fell. The Market worked.
I say we convince a congressman somewhere to sneak a small snippet into some must-pass law oen of these days. A snippet that would allow me once a year to show politicians what I think of their work by requiring each politician to allow me to smack them upside the head. And make a big shindig of it all, invite the press, hire a caterer, and of course all a tthe taxpayers' expense. This snippet of law would not allow anyone to back out of getting smacked. What a great way to spend one day a year, and it could be a heck of a party. National Politician Smacking Day, everybody gets off work to watch it on TV and everything.
Do you think they'd start actually reading what they vote for if something like this happened a few times?
Interesting how they tie the giveaway to current Republicans and Democrats and yet who is mentioned supporting the giveaway in the article?
* Charles Grassley, Republican (IA)
* Rick Santorum, Republican (PA)
* Gordon Smith, Republican (OR)
* Orrin Hatch, Republican (UT)
Who is mentioned as being against the giveaway?
* Lloyd Doggett, Democrat (TX)
So maybe it's the so-called "liberal media" who is just raking the GOP over the coals. Or, maybe it's representative of trying to show the corrupt GOP Congress as being bipartisan in a weak attempt to appear "fair and balanced."
In this case, I suspect it's the latter. YRMV.
Support a few technologists in Washington.
I have long been a proponent of this idea, but it needs to expand beyond each bill and its amendments. If you've ever read a huge bill like the Patriot Act, you know that a lot of any bill is modifications to existing law.
We need to be able to see diffs on existing law in addition to diffs on the bill being passed. In addition, any amendments should show what was changed in the bill and existing law. The main problem with this idea is that it would rely on either natural language processing or interns (which could screw up or deliberately not flag certain changes).
I want this desperately, and if I ever win the lottery or something, I'm going to fund its creation.
If it's for-profit but free, you're not the customer -- you're the product (e.g., the Slashdot Beta's "audience").
"... spraying coal with pine tar qualifies..."
Ummm.. ok, so what's wrong with that? Last time I checked, carbonization (heating and compressing wood) produce coal tar and pine tar which also is used to produce acetic acid, methanol, and turpentine.
Excerpt from Wikipedia about acetic acid:
"Liquid acetic acid is a hydrophilic (polar) protic solvent, similar to ethanol and water. With a moderate dielectric constant of 6.2, it can dissolve not only polar compounds such as inorganic salts and sugars, but also non-polar compounds such as oils and elements such as sulfur and iodine. It readily mixes with many other polar and non-polar solvents such as water, chloroform, and hexane. This dissolving property and miscibility of acetic acid makes it a widely used industrial chemical."
Another word, it gives off extra Hydrogen when mixed with water. So it's used to produce hydrogen cheaply... hmm that's a bad thing?
Excerpt from Wikipedia about methanol:
"Methanol is used on a limited basis to fuel internal combustion engines, mainly by virtue of the fact that it is not nearly as flammable as gasoline. Methanol blends are the fuel of choice in open wheel racing circuits like Champcars, as well as in radio controlled model airplanes, cars and trucks. Dirt circle track racecars such as Sprint cars, Late Models, and Modifieds use methanol to fuel their engines. Drag racers and mud racers also use methanol as their primary fuel source. Methanol is required with a supercharged engine in a Top Alcohol Dragster and all vehicles in the Indianapolis 500 have to run methanol. Mud racers have mixed methanol with gasoline and nitrous oxide to produce more power than gasoline and nitrous oxide alone."
hmm... sounds like alternative fuel to me... or maybe I'm not getting this article's punch line.
Umm.. so what am I missing here? Is there supposed to be a punch line in the article where I supposed to go "Ah, those GOP rascals!?"
"Don't let fools fool you. They are the clever ones."
You still believe the crap that your upper middle class mommy and daddy feed you? Unions, while given a bad rap because a very few of them were used by politicians and moneygrubbers for their own gain, are the only thing in this country, and the world, that is keeping corporations from completely stepping on people. Safety regulations in mines? Forced by union strikes. Child protection laws in the workplace? Forced by unions (led in the fight by a 90-some year old woman who actually cared about 9 and 10 year olds losing limbs in factories. A woman named Mother Jones). Fair health care and prevention of a corporation cutting all retirement plans to pad their corporate wallets? The only thing preventing this is, yes, unions. Workers whose salries are randomly cut for "cost-saving measures" while the corporate office posts record profits? The Union is the only thing that can help them. The government doesn't care. Walmart doesn't care (and constantly squash any attempts for their workers to unionize). And the upper middle class don't give a damn, because they've never had to work in dangerous conditions, or work 3 part time jobs just to eat and have no insurance. Once you've had to actually work for something in your life, or have had your benefits stripped, the benefits which are part of your salary (and you've agreed to be paid less than you should be just to get those benefits), then you can rail against the unions. Once you've actually studied history and taken a moment to use your brain, and maybe think for yourself instead of letting Walmart or Uncle Sam do it for you, then you can rail against unions. Once you use your brain and the internet for something other than trying to make yourself feel superior and intelligent, and maybe read up on the union strikers who were murdered and maimed to "protect" the "peaceful life," workers who wanted only to not be forced to go down into mines without safety equipments, or to not be charged more for the necessary gear than what they earned for the work, then you can rail about knowing it all. Once you actually get off your ass and find out that there's more to unions than jokes about Jimmy Hoffa, then you can say something. Until then, use mommy and daddy's money to buy a clue. And it's the government workers, the postal workers (one of the largest corporate welfare corporations in the U.S.) that make $45/ hr. Not the shipbuilders, or auto builders, not the miners or janitors. Unions, and strikes, are not about getting paid more and mroe for doing nothing. They're about getting what you were promised, for protecting benefits that you're due, for not getting screwed over by a corporation while the suits at the top get paid millions for doing absolutely nothing. An Injury to One is an Injury to All.
"The kneejerk reaction of the left-wing idiots is to blame Bush for everything."
I looked through the comments, and only one person even mentioned Bush (technically, his administration). Neither the writeup nor the article blames Bush. So if you're seeing "left-wing idiots" everywhere, maybe it's time to increase your medication.
Let me get this straight:
- Synfuel is meant to be a petrol and diesel replacement produced from coal (for mor information look at the South African company Sasol: almost half the country's requirement of petrol are made of coal. And yes, it works just fine.
- At high oil prices owning real synfuel technology is like a licence to print money. You take cheap coal and turn it into expensive petrol.
- You may argue that synfuel production is unprofitable at low oil prices and therefore, subsidies are needed at low oil prices to make companies invest into this technology.
And the last thing is precisely what the US government intended with its tax break. I don't want to say that it is sensible tax break, but I think some people would argue it is.
So, to summarise:
High oil prices -> Synfuel producers make money because they can sell their synpetrol at high prices
Low oil prices -> Synfuel producers make money because they get a subsidy.
HOWEVER, the companies described in the article do not produce synfuel. They simply make a nonsense modification to the coal that qualifies them for the taxbreak. Therefore, they do not benefit from high oil prices as a real synfuel producer would.
So now, they are lobbying to get their taxscam going that has NO benefit to the public at all.
What lawmakers should do: Tighten the definition of synfuel so only real synfuel producers qualify for the tax break. These will be happy with high oil prices and although they will still want the tax break at high oil prices, they shouldn't get it as they are making enough money on their own.
SmilingBoy.
They bought four "synfuel" plants in Oct 2001 for $46 million in cash. The next year, those plants generated $159 million in tax credits. So instead of paying an annual income tax of around 36.1%, like they did in 2001, they only paid 6.8% in 2002, "due primarily to the impact of our synthetic-fuel business."
Not bad for "a few pole barns and conveyor belts where coal was sprayed...with small amounts of diesel oil, pine tar resin, and other substances."
After making $370 million in five years, I'd be ready to bail out too. That's just over 800% ROI. Buy low, sell high!
In the movie "Superman", Perry White, editor of the daily planet says -
"I want the name of this paper and Superman to go together like peanut butter and jelly, like politics and corruption...."
The problem is basically this - you have created an office that gives the holder permission to spend the peoples money that they exert no effort in earning. THEN you have created an election process that requires millions of dollars to be spent to achieve that position of authority. How many seconds does it take the average fool to figure out that you can use those "public funds" and give them to firms that will kick back a fraction of the proceeds as the legalized bribery that we call "campaign contributions".
Then you act surprised that federal spending is full of "gifts" to large companies. Sheesh - did you go to school on the short bus?
There is one good way to fix this -
A constitutional amendment that disempowers Congress and substitutes a direct democarcy. Every taxpayer - along with their federal tax return, gets to say where the money they are "contributing" gets spent. Congress would assemble a sales catalog of possible federal programs, and taxpayers would pick and choose how much to spend on each one. Taxpayers would also get to vote each year on raising or lowering the tax rates.
THAT would put some radical reform into the federal government!
"Sic Semper Path of Least Resistance"