$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.'"

Comments

9 Billion over three years

[pizzaman100]

Note that the 9 billion dollar credit is how much they got in 3 years.

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.

More socialist bs

[geekee]

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.

Simple technical solution to many such scams

[straponego]

Often sleazy little tibits like these are inserted at the last minute into a bill hundreds or thousands of pages long. When the votes are taken, nobody is even aware of the changes. Congress critters complain about having voted for something they didnt know about, but none of them seems to want to address the problem.

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.

Re:Meanwhile...

[drinkypoo]

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.

Never mind that you (yes, you!) can get a permit for small-scale biodiesel production.

Also, you don't even have to refine it! Get a $795 kit from greasecar, a $1200 kit from greasel (bad idea) or a $1100 kit from Elsbett (best idea, if you have the money) and you can run on vegetable oil. You only need [bio]diesel for startup and shutdown, and if you get the Elsbett kit, you can put whatever fuel including WVO into the same tank and start up on it, too.

Biodiesel costs about $0.25/gallon if you make it yourself. Deacidifying and dewatering average fryer oil costs about $0.05/gallon. WVO has about 85% the energy of biodiesel, so you will get less power/mileage on oil, but it's cheaper, and easier. You can, however, build a biodiesel processor for around $600.

I have a 1981 Mercedes 300SD and plan to get the Elsbett kit, which is spoken of very highly everywhere I've seen a reference.

This ought to be good...

[symbolic]

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.

Re:This ought to be good...

[Danny Rathjens]

"Bipartisan usually means that a larger-than-usual deception is being carried out." -- George Carlin

Government screwups

[Slappytron]

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.

Re:Government screwups

[danpsmith]

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 marvel at this neo-capitalistic, liberatarian viewpoint on everything. I hear it a lot here. The market will work itself out. The market works towards a monopoly that creates barriers of entry. If government can't police the market at least a little bit, then we don't even live in a democracy anymore. Because when you vote with your dollar, your vote only counts as much as the contents of your wallet. Maybe this is an issue with the way in which government attempts to help things instead of an issue of them helping at all. Government funds a lot of research that would otherwise not happen because it is unprofitable. Just because it's bureacratic and awful doesn't mean the free market is the answer, it means we need to make it a better government.