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Paper Companies' Windfall of Unintended Consequences
Jamie found a post on ScienceBlogs that serves as a stark example of the law of unintended consequences, as well as the ability of private industry to game a system of laws to their advantage. It seems that large paper companies stand to reap as much as $8 billion this year by doing the opposite of what an alternative-fuel bill intended. Here is the article from The Nation with more details and a mild reaction from a Congressional staffer. "[T]he United States government stands to pay out as much as $8 billion this year to the ten largest paper companies.... even though the money comes from a transportation bill whose manifest intent was to reduce dependence on fossil fuel, paper mills are adding diesel fuel to a process that requires none in order to qualify for the tax credit. In other words, we are paying the industry — handsomely — to use more fossil fuel. 'Which is,' as a Goldman Sachs report archly noted, the 'opposite of what lawmakers likely had in mind when the tax credit was established.'"
Incompetent lawmakers are incompetent.
is all over this!
It wasn't mentioned in the summary, but the tax credit was passed in 2005. So no one thinks the $8 billion is related to stimulus packages passed more recently.
No, those will cost us a lot more when companies figure out how to fraud them.
...this is why centrally planned aconomies don't work.
[FUCK BETA]
I'm just waiting to see how long it takes the banking industry to hop on board once they realize how much money they can make by producing all their sub-prime lending bailout paperwork on in-house paper with alternative fuel tax credits. Your tax dollars at work.
This is another example where the intention of the law doesn't mean anything, what is actually written and what that can be stretched to mean does.
If a law is supposed to have a specific intention, then it should be written just for that.
If I have nothing to hide, don't search me
If the lawmakers find a hole they gain nothing. If they miss a hole they lose nothing.
If companies miss a hole they gain nothing, if they find a hole they gain $8 billion.
Guess which side is willing to devote more resources to poke holes in laws?
There is a limit to the amount of profit a car manufacturer on an individual car in the U.S. This only applies to basic passenger cars, not luxury cars or trucks. The answer? This is why the big 3 pushed trucks and SUV's so hard - which granted a large part of their customers wanted, but they largely ignored another large crowd that wanted small U.S. made economy cars. They produced crap instead, so we bought Japanese. Thank you Uncle Sam.
Some Americans With Disabilities Act rules apply only to companies of certain size, as in number of employees. Compliance is incredibly expensive in many cases. Some companies put the brakes on at a certain number of employees due to the expense of compliance sentencing said companies to stagnate growth at a certain size giving their mega corporation competitors an upper hand. Thank You Uncle Sam. The same can be said of certain FDA regulations and any other regulatory agency you can name.
My sister works for the Department of Agriculture. She writes checks to farmers to not grow crops.
Here's an idea:
KEEP THE FUCKING GOVERNMENT OUT OF IT
Unless something really needs regulating, leave it the hell alone. Food? Fine we need an FDA to make sure our food isn't nasty and contaminated. They probably overstep their usefulness in some cases, and under step it in others, but that's expected.
Yes, we do need an agency to keep track of Plutonium and Uranium. Just saying, yeah, track that.
We need an EPA - but it needs to know it's place.
ATF? We don't need that. It's a redundant agency originally created for tax purposes, not what they're doing now. It's also limiting freedom.
No government regulation usually helps huge companies by keeping the small competitors down. Create an agency to regulate an industry, then the companies buy the candidates they want and put them in the regulatory committees. The little guys can't do that.
The preceding post was not a Slashvertisement.
... call DOT and tell them to fill it with paper.....
Ever heard of corruption ?
If the lawmakers find a hole they gain nothing. If they miss a hole they lose nothing.
If companies miss a hole they gain nothing, if they find a hole they gain $8 billion.
If lawmakers find a hole, they gain nothing. If they miss a hole, they get 2% of that $8 billion.
There, fixed that for ya.
If a company misses a hole, the competitor that finds it instead gets the upper hand. If the hole is big enough, it could even outcompete the first one into oblivion by using the power of the state (and our taxes).
Does anyone else feel like this is an episode of "The Office"?
You mean the kind of deregulation where a central entity whose management is appointed by the president determines the money supply and a lot of the interest rates?
We haven't had deregulated banking since 1913. All we did was change one regulatory regime to another, which arguably allowed more abuse.
-- Support a free market in the field of government
Oh, really? Not according to the US government. http://www.epa.gov/climatechange/emissions/usinventoryreport.html Paper doesn't even show up, and all of the "industrial" processes (as opposed to home heating, electricity generation, and transportation) make up less than 7% of US emissions, so paper-making is barely a roundoff error. I'm not arguing that the paper companies aren't taking advantage of a loophole, but to suggest that this is having any meaningful impact on emissions one way or the other is ludicrous.
What was once true, is no longer so
This page is International Paper's feedback form. Tell them how you feel about this.
In addition to that, let your Congressional representation know too--OK it's Congress, but it might help anyway.
Government's idea of a balanced budget: take money from the right pocket to balance...oh who am I kidding?
But I seriously can't fucking believe, that after eight years of the incompetent fucking clowns in the Bush administration, that anyone has the brass balls to try to justify, let alone suggest, more retarded, illegal bravado from the executive branch. You are a complete dumbfuck, just like the tools who passed this law in 2005, and the tools who are currently skullfucking the concept of market economics for their ill-conceived political agenda.
First of all;
because this is a tax credit, it's the bailiwicks of congress and the IRS works for congress not the executive branch, not he Bush administration! Remember what congress giveth, Congress can taketh away, so if you have a problem with this write your congress-critter. The problem you'll have is how do we write a law the disallows a credit for adding a taxable fuel so that taxable fuels with alternative fuels added are not?
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