Slashdot Mirror

← Back to Stories (view on slashdot.org)

Paper Companies' Windfall of Unintended Consequences

Posted by kdawson on from the pulp-nonfiction dept.

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.'"

8 of 284 comments (clear)

  1. lawmakers by Anonymous Coward · · Score: 5, Funny

    Incompetent lawmakers are incompetent.

    1. Re:lawmakers by RichardJenkins · · Score: 5, Insightful

      Precisely. We live in a society where 'corporate selection' fosters public companies who mindlessly take the action which most increases value for their shareholders. If a law is written such that it can be gamed - it will be.

      Lawmakers should take that into account and legislate around it; cause they sure ain't gonna change Corporate American Culture any time soon.

    2. Re:lawmakers by mrcaseyj · · Score: 5, Interesting

      In the short term the solution for this is for the president to order the IRS to withhold these payouts until congress can close the loophole. If the paper companies sue, they would get laughed at or scolded by the judges as this is an obvious and evil perversion of the intent of the law.

    3. Re:lawmakers by benjamindees · · Score: 5, Insightful

      we create laws specifically to prevent that.

      The only thing this law has prevented is papermills from using alternative fuels.

      Are you saying you want a type of anarchy

      The parent said nothing about anarchy. No need to erect strawmen.

      I think copious legislation should be applied

      Your "copious" legislation has already been applied. It is demonstrably counterproductive.

      --
      "I assumed blithely that there were no elves out there in the darkness"
    4. Re:lawmakers by Ashriel · · Score: 5, Informative

      Doesn't matter. Precedent from the Supreme Court states that the IRS has sovereign immunity and cannot be sued on any issue within it's own domain.

    5. Re:lawmakers by CrimsonAvenger · · Score: 5, Insightful

      In the short term the solution for this is for the president to order the IRS to withhold these payouts until congress can close the loophole. If the paper companies sue, they would get laughed at or scolded by the judges as this is an obvious and evil perversion of the intent of the law.

      Alas, we live in a nation where rule of law is paramount.

      The letter of the law is what the law is, not the "intent" of the law.

      Which means it would be illegal to withhold payments specified by law, and any lawsuit challenging such an act would likely succeed, with penalties.

      In other words, you're stuck with the law as written until someone changes it. The government trying to game the law by not obeying it is, if anything, worse than some corporation gaming it by taking advantage of something not foreseen by the lawmakers.

      After all, if the government can choose to not obey this law that you dislike, what's to prevent them from disobeying a law you like?

      --

      "I do not agree with what you say, but I will defend to the death your right to say it"
  2. Law from 2005 by Anonymous Coward · · Score: 5, Informative

    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.

  3. Re:Laws are used as written, not intended by cjfs · · Score: 5, Insightful

    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.

    This is rather troublesome. If these situations continue our representatives may be forced to actually read the legislation they're passing.