President Obama has been famously outspoken about “a dangerous and growing inequality” in our economy that has “jeopardized middle-class.” He was so adamant about our private sector’s misallocation of income away from a majority of Americans and towards a fortunate few that he proclaimed, “I believe this is the defining challenge of our time: making sure our economy works for every working American. It’s why I ran for President… It drives everything I do in this office.”
Apparently, the President’s concern for fairness in the distribution of public sector benefits across society does not seem to drive his support for federal renewable energy policies, many of which tend to favor some U.S. states at the expense of others.
For example, the Institute for Energy Research (IER) released a study at the end of last year that examines the federal allocation of wind energy subsidies across the country. Their analysis estimates the net value of Wind Production Tax Credits (PTCs) distributed across the states by comparing the federal wind-subsidy tax burdens paid by the citizens of each state to the percent of PTCs received by that state. The IER then examines the allocation of those net PTCs across our fifty states.
The IER estimates that in 2012, ten states received over 72% of the total PTCs during that time frame, with many states receiving nothing. The table below notes some net winners and some net losers:
|Net Losers||Net Gainers|
These numbers do not correlate with population, per capita incomes or any other characteristic commonly used to justify redistribution efforts. Yet, if one were to ask the President or his Cabinet members to justify this policy of inequitable allocation of federal wind energy subsidies, their response would surely be: in America’s diverse geographic environment, those states that are capable of producing more wind energy for the country will naturally receive a greater share of federal wind subsidies.
The irony is that one might say the exact same thing about the American private sector: in our nation’s diverse business environment, those individuals who are capable of bringing more value to the economy will naturally receive a greater share of our nation’s income. Perhaps meritocracy can justify only public sector benefits allocations, rather than the private sector benefits allocations.