Remember the embarrassing Solyndra debacle perpetrated by the federal government? You would think that North Carolina lawmakers would have learned a lesson about the futility of granting government privileges to inefficient “green” energy schemes. Think again.
HB 1139, “Promote Renewable Jobs,” sponsored by Reps. Jennifer Weiss (D-Wake), Pricey Harrison (D-Guilford), Paul Luebke (D-Durham), and Chuck McGrady (R-Henderson), provides a tax break of 25 percent of the cost of providing facilities to produce components for electric vehicles, including “devices for energy storage, load management, metering, and energy recharging.” Investors can get the tax break three ways: build a new facility for manufacturing the components, expand an existing facility, or convert a facility by installing different equipment.
This legislation involves the government providing an unwarranted competitive advantage to politically-favored companies, rather than moving toward a fair economy in which all companies play by the same rules.
Moreover, tax incentives drive businesses to invest in areas that otherwise would not be profitable. Such market distortions cause scarce resources to be tied up in green boondoggles, and thus no longer available for more valued uses as determined by consumer preferences. Instead, productive capital flows to uses favored by politicians, which serves to centralize even more power into the hands of the political class.
Hybrid and electric automobiles are much more expensive than their gas-dependent counterparts. Being a strict, environmentally-conscious consumer is a heftier financial burden than most North Carolinians can bear in these harsh economic times. Only the wealthiest consumers can afford an electric car. Lower-income North Carolinians will be unable to replace their outdated vehicles with newer, more reliable models if gas-dependent car prices go up as a result of high demand and less competition. As with most government interventions into the market, they over-burden the average consumer.
Let consumers drive demand and let businesses respond to that demand. Obey the laws of the free market, and if the environmentalists are right about resource scarcity (and that’s a big “if”), then the cost of having a gas guzzling SUV or truck will eventually surpass the price of an electric car. Let the free market thrive, and both consumers and environmentalists may one day get what they want. And if environmentalists are wrong? Well, then, all that tax break money will have been wasted on making parts for shiny new cars that only the rich can afford.
For continuing to cram green legislation down the throats of North Carolina business investors and consumers, HB 1139 takes the cake for “Bad Bill of the Week”.