Trump will end Biden's EV (tax credit) policies

[dbeiler]

Subsidies not taxation. The fact is the US government - according to the IMF - spends about $760 billion a year on oil. This could be in the form of tax breaks - in fact that is the usual form.

No, the US government absolutely does not pay $700 billion according to the IMF. It pays 3 billion. The other 700 is literally just a made up number pulled out of someone's ass.

"In 2022, fossil fuel subsidies in the United States totaled $757 billion, according to the International Monetary Fund. This includes $3 billion in explicit subsidies and $754 billion in implicit subsidies, which are costs like negative health impacts and environmental degradation that are borne by society at large rather than producers." (EESI)

Fact Sheet | Proposals to Reduce Fossil Fuel Subsidies (January 2024) | White Papers | EESI

This fact sheet discusses attempts to alter fossil fuel subsidies, including measures in the Biden-Harris Administration’s FY 2024 budget request.

www.eesi.org

 

[SO16]

No, the US government absolutely does not pay $700 billion according to the IMF. It pays 3 billion. The other 700 is literally just a made up number pulled out of someone's ass.

"In 2022, fossil fuel subsidies in the United States totaled $757 billion, according to the International Monetary Fund. This includes $3 billion in explicit subsidies and $754 billion in implicit subsidies, which are costs like negative health impacts and environmental degradation that are borne by society at large rather than producers." (EESI)

Fact Sheet | Proposals to Reduce Fossil Fuel Subsidies (January 2024) | White Papers | EESI

This fact sheet discusses attempts to alter fossil fuel subsidies, including measures in the Biden-Harris Administration’s FY 2024 budget request.

www.eesi.org

From the same site in 2019.

“Conservative estimates put U.S. direct subsidies to the fossil fuel industry at roughly $20 billion per year; with 20 percent currently allocated to coal and 80 percent to natural gas and crude oil. European Union subsidies are estimated to total 55 billion euros annually.”

Fact Sheet | Fossil Fuel Subsidies: A Closer Look at Tax Breaks and Societal Costs (2019) | White Papers | EESI

www.eesi.org

Did they drop or counted different?

 

[dbeiler]

From the same site in 2019.

“Conservative estimates put U.S. direct subsidies to the fossil fuel industry at roughly $20 billion per year; with 20 percent currently allocated to coal and 80 percent to natural gas and crude oil. European Union subsidies are estimated to total 55 billion euros annually.”

Fact Sheet | Fossil Fuel Subsidies: A Closer Look at Tax Breaks and Societal Costs (2019) | White Papers | EESI

www.eesi.org

Did they drop or counted different?

By asking this question, it is apparent you are not the IMF's target audience. The target audience would simply accept the $20 billion number as fact, without questioning, seeking evidence, or checking credibility.

If you keep scrolling down the page, you'll see a short listing of "direct subsidies" contributing to this $20 billion. Add them up and they total only a few billion. Where is the other claimed $17 billion in direct subsidies coming from? Hmmmm........ that information is conspicuously missing.

The $20 billion is just another wishy-washy, pulled-out-of-an-ass, made-up number. The problem with using these made-up numbers is that they often do not add up, as you have discovered when you started questioning their plausibility.

The IMF clearly has an agenda. The agenda is anti-fossil fuel subsidy. The agenda apparently does not include honesty, integrity, or basic math skills.

 

[Eto Demerzel]

This is descending into deep politics because the oil industry welfare (yes, that's what it is) is a tax code zombie from 1913 when drilling was highly risky. Those subsidys kept alive all this time, and once on the teet of federal welfare, they will never give it up no matter how many 100s of billions profit they make.

It's not a party line issue. States that benefit from these subsidys like W. Virgina, Texas.
GOP or Dem, they want those subsidys for their state.
Oil industry spends countless millions on lobbyists.
Record profits go to shareholders, market profits and very little to infrastructure.

When factors this powerful are at play, there is no way to kill this kind of corporate welfare.

One could argue the same thing for US corn... again, these are big issues.
But hardly worth arguing about. It is what it is. All parties are going to ride the taxpayer gravy train till the wheels come off.

That change is happening but not in our lifetime.

 

[David_Cary]

All good points. I did not realize the IMF number was counting negative externalities. From what I have seen $3 billion is laughably low, $20 billion may make more sense.

Negative externalities do matter of course. But not in this context. At the same time, I would not consider them "made up" at all.

The subsidies are a bit of a party issue - and it is why oil producing states are usually pretty red states.
BTW - W. Va has coal not oil.

Change is hard to predict. I would say that oil will diminish in power in my lifetime and the US will not exist in the same manner as it does today. So I don't expect the subsidies to continue in the same manner.

 

[Eto Demerzel]

All good points. I did not realize the IMF number was counting negative externalities. From what I have seen $3 billion is laughably low, $20 billion may make more sense.

Negative externalities do matter of course. But not in this context. At the same time, I would not consider them "made up" at all.

The subsidies are a bit of a party issue - and it is why oil producing states are usually pretty red states.
BTW - W. Va has coal not oil.

Change is hard to predict. I would say that oil will diminish in power in my lifetime and the US will not exist in the same manner as it does today. So I don't expect the subsidies to continue in the same manner.

Coal is a fossil fuel. The coal industry enjoys all the tax subsidies and tax evasions as the rest of the oil, coal and natural gas industry.
Besides coal, W. Va also is the fourth largest natural gas producer.

It's more on the order of $15-20B annually in costs to the taxpayer (the specific numbers are not the point)
the germane point is that for the fossil fuel industry to remain sucking the teet of federal dollars, it's in their best interest to fight alternative and renewable energy.
So that is hitting all taxpayers double. Once in the pocket, and slowing our ability to enjoy the benefits of newer energy resources.

As they say, follow the money. Who are the biggest lobbyists in CA (my state)?
1. Oil
2. Casinos
3. Fast food
4. Power companies
That tells you all you need to know about the forces wining and dining our politicians every day.

You see that with privately owned utilities and how they are killing the cost effectiveness of solar.
Publicly owned utilities are revenue decoupled. It's a win win for every homeowner, not just ones with solar.
Cheaper rates for everyone, renewable energy and less outages.
Solar moved way faster than the oil industry thought and, just like EV's,
the massive propoganda campaign to win the sheeple came out in massive force.

Again, just like EV's, the tide turned anyway and private power companies moved a massive propoganda campaign to gut financial incentives to net meter. They actually passed in CA, so PG&E customers are f'd for life now. Publicly owned utilities are still highly beneficial with solar and it's being adopted in massive numbers.

 

[SpicyPaneer]

In summary, Musk is for a free market to decide the 'winner' of the ICE vs EV competition. In a free market EV's will eventually take over through consumers being motivated to make the choice based on cost, operating expenses, user experience, etc. But tariffs and tax credits etc distort the free market. Musk's position has been against the tax credits even before the US IRA bill was passed. But his position is against ALL tax credits including those on fossil fuels. Biden recently increased the US tariffs on Chinese EVs to 100%, a position even Biden earlier said was stupid. Biden has done this to protect union workers and pander for their votes. But these tariffs won't stop the inevitable. Musk is not for unions for all the obvious reasons. So I think Musk would be in favor of removing ALL tax subsidies and tariffs and pressure from the Gov't to unionize and let the market be as free as possible. But since politicians are politicians this will never happen.

100 years ago cars replaced horses in major cities in ~13 year timeframe. I'm not aware of any tax credits that forced this conversion. It happened because the car was a better form of transportation than horses. If the market were left to regulate itself the same thing would happen if the true costs of products were paid by consumers. Consumers will act in their own best interest. But all these manipulations of the market by politicians hide the true costs from consumers so they are making suboptimal decisions. This will result eventually in a massive correction. The US can't be an ICE/Fossil Fuel island to itself.

Biden only supports union built EV’s

 

[Midpack]

Biden only supports union built EV’s

Tesla has certainly benefitted from the IRA EV tax credits, along with SpaceX contracts and other Tesla subsidies, but there's no question Biden supports unions first. At least Biden appreciates EVs, can't say that about Trump. As far as I can tell Musk doesn't care for Trump or Biden (like many Americans).

 

[David_Cary]

To be fair, the electoral college demands some concessions for unions and car makers.

If you let the markets run completely free, the rust belt suffers more and they vote for Trump. But Biden has been pro-union for a long time.

I think you have to give Biden some credit for the IRA - and it would have been significantly better if it wasn't for 2 senators.

Someone said W.Va and oil - which is incorrect. Of course coal is similar.

 

[SalisburySam]

The other 700 is literally just a made up number pulled out of someone's ass.

That had to have hurt.

 

[Eto Demerzel]

To be fair, the electoral college demands some concessions for unions and car makers.

If you let the markets run completely free, the rust belt suffers more and they vote for Trump. But Biden has been pro-union for a long time.

I think you have to give Biden some credit for the IRA - and it would have been significantly better if it wasn't for 2 senators.

Someone said W.Va and oil - which is incorrect. Of course coal is similar.

No, what I said was
"It's not a party line issue. States that benefit from these subsidys like W. Virgina, Texas."

The "oil subsidies" have always been oil, coal, natural gas industries.

 

[David_Cary]

See, I would not take "oil subsidies" as all fossil fuels together. But it is semantics. Oil and NG much more tied together.

And it kind of is a party line issue. There is a reason the Republican party has a strong hold on the fossil fuel states. Manchin now has registered as an independent just to put the sock in it. Yes - D's do many of the same things but not to the degree that R's do.

Politicians love subsidies in general - it gives them power and contributions. So there will be D's that want this too. But that isn't some equivalence. It is why in CA you pay a lot for electricity and gasoline. It is why you have the highest penetration of EVs. Because the D's run things. You also have a decent oil industry so the D's will pander to that too.

By state, of the 20 highest per capita carbon states, only New Mexico is blue. The bottom 10 are solid blue. Some of this is climate for sure but a lot based on fossil fuel production. Wyoming blowing everyone else out of the water but having few people really hurts.