WASHINGTON DC (04/18/2023) – Tomorrow, IER’s Policy Director Kenny Stein is scheduled to testify before the House Ways and Means Committee at a hearing titled “The U.S. Tax Code Subsidizing Green Corporate Handouts and the Chinese Communist Party.”
As Stein notes in his testimony:
“Vast subsidies for politically-favored industries are rarely a wise use of taxpayer funds. Politicians are very bad at identifying the most productive technologies or foreseeing future economic trends. This means industrial policy is distortive and often leads to inefficient and wasteful resource allocation as industries chase government money and mandates rather than catering to customers or working to innovate for the future. The copious suite of subsidies crammed into the misnamed Inflation Reduction Act (IRA) shares those usual deficiencies. However, the IRA goes further than merely misguided industrial policy because the industries singled out for the most generous subsidy – namely wind (electricity generation), solar (electricity generation), and batteries (both for electricity storage and electric vehicles) – are not domestic industries. The inputs and components that will build the subsidized green energy system envisioned by the IRA will come from foreign countries, especially China, which thoroughly dominates both the solar and batteries industries, and is a major part of the wind industry. The IRA thus discards even the usual justifications for industrial policy such as supporting domestic industry or security. This green industrial policy actually seeks to destroy domestic energy and replace it with foreign energy. The policy set forward in the IRA will tax our children to pay China for green energy to replace the oil, natural gas and coal that we currently produce here in America.”
A full transcript of his testimony is available here. The hearing will begin at 10:00 AM and can be viewed here.
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