January 3, 2012

GOVERNMENT IS BAD AT PICKING WINNERS, GREAT AT FORCING LOSERS:

Ethanol Subsidy Ended by Congress, Signaling Political Shift (JEREMY B. WHITE, January 3, 201, IB Times)

In allowing the demise of a formerly sacrosanct ethanol subsidy, Congress underscored both its drive to cut costs and the ethanol industry's diminished need for economic support.

The Energy Tax Act of 1978 sought to stimulate the ethanol industry by providing federal tax credits to gasoline refiners who purchased ethanol, a biofuel that in the United States is mostly produced from corn, to blend with gasoline. Corn farmers embraced the subsidy, which drove up the price of corn by increasing demand for ethanol, and it became common practice for presidential candidates to enthusiastically voice their support for the policy while campaigning in Iowa, a leading corn producer.

Tax gasoline more not discrete alternatives less. Who cares what the Volt runs on as long as it isn't gasoline.

Posted by at January 3, 2012 3:02 PM
  

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