Green Energy Tax Cuts in the New York Times!

Woa. The New York Times has published my letter about supply side tax cuts for green energy in Saturday's paper, print and online.  What a pleasant surprise!

Editor Sue Mermelstein did a great job slimming down my original letter (similar to my last post) yet making it somehow better.  Boy, I wish I had an editor.

The letter responds to last Friday's article, "A Gold Rush of Subsidies in Clean Energy Search."  The letter can be read in The Times online, or, well, here:

To the Editor:Your article does a great service in detailing the oversubsidization of alternative energy, but doesn’t mention the biggest problem with these kinds of direct subsidies: They are addictive and create long-term corporate dependency. What happens when budgets get cut and the subsidies run out, as happened in Spain? Complete collapse. 

There is only one sustainable way to support alternative energy; only one way to reward success, not failure; only one incentive whose disappearance does not spell disaster: supply-side tax cuts for green energy. That means elimination of corporate taxes, capital gains taxes, sales taxes and estate taxes for clean, renewable energy investments. 

Such tax cuts promote success, not failure, because they benefit only companies with sustainable revenues and profits. Investors would be encouraged to invest in such businesses because their profits will be tax-free, a huge advantage over other investments. 

We have directly subsidized enough alternative energy start-ups in the United States. We have already rewarded failures like Solyndra. Now we need to separate the wheat from the chaff. 

With supply-side tax cuts for green energy, the most competitive, profitable alternative energy models will survive, thrive and attract more capital, and unsustainable models will disappear. 

R. RANDOLPH RICHARDSON
New York, Nov. 13, 2011

 I'm very glad The New York Times, my home town paper of record, thinks green energy tax cuts are an idea worthy of further public airing.  Since I call my self a centrist (indeed the 21stCentrist) it is nice that I actually do get support from all sides for these ideas.

Over Subsidy, or Wrong Incentive?

The New York Times had a great article yesterday about the over-subsidization of alternative energy.  But the authors fail to mention the biggest problem with these kinds of direct subsidies for alternative energy.  They are addictive and create long-term corporate dependency on public subsidy. They anticipate and therefor reward failure.  What happens when the subsidies run out, when the government goes broke, budgets get cut, as they did in Spain?  Complete collapse of these kinds of subsidized industries.   They blow away like chaff in the wind.

There is only one sustainable way to support alternative energy, only one way that rewards success, not failure, where the disappearance of the incentive does not spell disaster: supply side tax cuts for green energy.  That means elimination of corporate taxes, capital gains taxes, sales taxes and estate taxes for clean, renewable energy investments.  Investors would be encouraged to invest in such businesses because their profits will be tax free, a huge advantage over other investments.  But that benefit is only realized by successful companies that can make a profit.  Only then does investment becomes keenly focused on finding and developing economically successful, competitive alternative energy business models, not unprofitable subsidy addicts.

We have directly subsidized enough alternative energy start ups in the United States.  It is clear we have already rewarded failures like Solyndra.  Now we need to separate the wheat from the chaff.  It is time to switch the incentive structure to find and reward the winners.  With supply side tax cuts for green energy, the most competitive, profitable alternative energy models will survive and thrive and attract private investment on their own merits, and unsustainable models will disappear.

The problem is not just over-subsidization.  It is the wrong incentive structure entirely.

21st Centrist in Development

I am presently working on development of a new blog, 21st Centrist.
While I have not yet publicly launched it as yet, you can check out
the beta site version of the blog here.

The Supply Side Health Care Solution

I have not even blogged about it until today, but regardless, another of my policy proposals has just seen international syndication thanks to Mr. Deroy Murdock and the Scripps Howard News Service. This one: a simple way to fix the health care mess. Now, there is something deeply wrong about this. I mean, after all, shouldn't I have at least set it down in black and white, spent some time marshaling my thoughts and all that? How is it that an off-the-cuff suggestion at a conference makes it into, what, scores or hundreds of papers around the world? That is just stupid.

But here it is. And here. And here. A bunch of other places too. Egads.

Here is the National Review Online version, excerpted:

"As New York philanthropist R. Randolph Richardson recently noted at an Atlas Economic Research Foundation seminar, why not reward doctors who donate their services to needy, uninsured patients? Imagine that Doctor Gomez sees the uninsured every Tuesday and Thursday from 10:00 a.m. to noon. She could treat the value of these four hours of weekly foregone revenue as a charitable deduction.

“One fix to our health-care woes might be simply to increase and regularize the supply of pro bono care for those who cannot pay,” Richardson tells me. “Increasing the supply of pro bono care is essentially a supply-side problem, amenable to supply-side solutions. If you want more of something, tax it less. So, if you want doctors and other health-care providers to supply care to those who cannot pay, then simply reduce their taxes to zero for doing so.”

The goal here is to entice millions of health-care professionals to contribute their services to those who cannot afford them and cannot secure or purchase insurance. Why not turn thousands of clinics and examination rooms into the domestic equivalent of Doctors Without Borders?

Government should limit itself to certifying people as uninsured and needy, so that prosperous-but-stingy people do not game the system. "

Perhaps I have some emails I've drafted about this proposal, but I'm damned if I can find 'em right now. Well, there is always another post to put some much needed flesh on this skinny little notion. Shoot. I probably need a whole new blog.