$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.'"

Those clowns in congress are at it again...

[bigwigeconomist]

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.

Re:What's another 9 billion?

[Horatio_Hellpop]

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 the fault of the "current administration" ... not by a long shot.

Please buy a (chinese) clue during your next shopping run at Wal-Mart.

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.

Re:9 Billion over three years

[Funkmaster_G]

You're correct, but I don't think they were comparing year-by-year. They were just putting the $9 billion number in perspective. Something like "Bill Gates is worth $30 Billion dollars, which could feed X Millions of people 3 meals a day for a year..." even though he didn't make all that money in a year. Just a comparison.

Re:Um

[Politburo]

Unless your uncle was the chair or ranking member of the Intellience Committee, there's no requirement for him to have been informed of the strikes, iirc, for obvious security reasons.

Re:Um

[TubeSteak]

Most Congresspeople are specialists.

They have in-depth knowledge about a few specific national issues (usually because those national issues effect their State) and they know about local stuff. If they know anything else, they're on a committee that has to deal with it, or they've had lobbyists take them to dinner to tell them about it.

Otherwise, Conresspersons are no more informed than you and me.

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:Those clowns in congress are at it again...

[mrchaotica]

If the bill is too complicated for ordinary individuals to understand, you still have to comply with it.

WTF are you talking about? If a bill is too complicated you don't comply with it, you vote it down so that it never becomes law.

...or at least the congresscritters should, at any rate.

Republicans *and* Democrats?

[stomv]

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.

Re:Um

[SUB7IME]

What you're saying makes intuitive sense. As soon as you actually take a look at the voluminous statutes passing through the Congress, though, you'll realize that it would be bordering-on-impossible for one human being to read and understand each piece of legislation that is being voted on.

In other words, with modern legislation as complex as it is, there is no way for each Congressperson to read each bill. They rely on soundbites from people whom they trust who themselves can only read (substantial) portions of the bills.

Re:More socialist bs

[SirSlud]

> where people are fired for wasting money

If you believe that, its pretty obvious you've never worked at a large corperation. Theres a reason theres a term 'office politics' - its because the same bullshit *some* people seem to think only exists in politics also occurrs in capitalist organizations.

You're an idealist, and as such, you'll always be far from the truth when using critical analysis becuase the axioms of your arguments simply don't exist in the real world.

Re:What's another 9 billion?

[wolfponddelta]

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.

Re:What's another 9 billion?

[Siffy]

Anyone got some freaking mod points for this guy/gal? If I did they'd get it from me, cause I don't have a clue how someone that thinks your typical laborer makes $90K a year gets a +2, Insightful for their FUD opinion while someone with an actual brain doesn't have any yet. Unions have helped the US's industry parts substantially for the greater part of the last 80 years. Very few of them have a negative effect on their fields. Teacher's Unions come to mind. But it's not the fact that they have a union that's bad, it's the things that union tries to do. As for the government not caring, I disagree with the sole example of OSHA. It's a huge agency that doesn't screw around when it comes to their rules and gets a lot done. Hmm, I see why the grandparent got up moderated, they took a shot at Bush's staff. While having no clue where we'd be without unions helping bring a balance to rights and wealth.

These companies should not get subsidies at all

[SmilingBoy]

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.

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.